State legislative actions on mental health insurance parity in 2009 focused
on strengthening statutes that provide fewer insurance mandates than those
approved last year under the landmark federal parity law.
The efforts in some states to conform their statutes to the requirements
set by the federal law—the Paul Wellstone and Pete Domenici Mental
Health Parity and Addiction Equity Act of 2008—included adding insurance
coverage requirements for substance use disorders and making out-of-pocket
costs the same as those required for other types of health care. At least 24
legislatures have considered some type of parity expansion measure so far this
year, and six have enacted such legislation.
The new state laws—generally aimed at insurance plans not covered
under the federal law—aim to simplify state regulators' enforcement
efforts, because all plans will have to follow the same rules, according to
The state actions were not required by the federal parity law, because it
does not apply to state-regulated insurance plans. Instead, the federal law
applies to other insurers, such as those that cover the 82 million people who
fall under the Employee Retirement Income Security Act (ERISA). Other plans
covered by the federal parity law bring the total number of insured who could
be affected by federal parity requirements to about 113 million people.
In Alaska, the legislature updated the state's parity law in April to
reflect provisions in the federal parity law, and the governor signed it in
August. Had the state not taken action, Alaska Rep. Lindsey Holmes (D) wrote
to his colleagues in support of the bill, the state's division of insurance
would not have been able to enforce the law when the federal law became
The Alaska bill (HB 222) establishes the same requirements for
state-regulated insurers that the federal parity law establishes for plans it
regulates. Among the changes is a requirement that state-regulated plans cover
the treatment of substance use disorders. The federal law requires parity
coverage of treatment for substance abuse only when such coverage is already
provided. In addition, the measure matches state law to the Genetic
Information Nondiscrimination Act (PL 110-233)—enacted in
2008—barring insurers from discriminating on the basis of subscribers'
or applicants' genetic information and requiring continuity of coverage for
students taking medically necessary leaves of absence from college.
The other states to pass such measures were New York, Arkansas, Colorado,
South Carolina, and West Virginia.
New York voted to make permanent the 2006 parity measure known as Timothy's
Law. That law requires insurers issuing group health policies to cover a
minimum of 30 inpatient days and 20 outpatient visits for the treatment of
mental illness. Other features require health insurance policies of employers
with more than 50 employees or members to include care for "biologically
based mental illnesses" at the same coverage level as for other medical
conditions. These illnesses are defined as "schizophrenia/psychotic
disorders, major depression, bipolar disorder, delusional disorders, panic
disorder, obsessive-compulsive disorder, bulimia, and anorexia" in
adults and children.
"Added to the federal law, [the state insurance parity requirements]
are an extremely potent combination," Seth Stein, J.D., executive
director and general counsel of the New York State Psychiatric Association,
told Psychiatric News.
Parity legislation in West Virginia (HB 3288) was vetoed by Gov. Joe
Manchin III (D) in May over concerns that it would undermine existing state
parity law. However, he signed a revised bill in June after the legislature
made technical changes. The legislation brings the state's parity law in line
with the federal one by prohibiting group health plans that offer mental
health and substance abuse coverage from imposing greater treatment
limitations and financial requirements on those benefits than on those for
other types of medical care.
In Colorado, legislation conforming to the federal parity law was signed on
June 1. That legislation (HB 1338), which was sponsored by state Rep. Edward
Casso (D), requires coverage of "biologically based mental illness and
mental disorders" but does not define them. It also includes provisions
to match the federal genetic information discrimination law.
The South Carolina parity measure (SB 390) became law on June 3, without
the governor's signature. It expands a 2005 state parity law by adding
substance abuse coverage. The expansion was driven by the inclusion of
substance abuse coverage in the federal law, said Richard Frierson, M.D., a
former president of the South Carolina Psychiatric Association. Legislators
were willing to support the measure because the state's research on the
inclusion of substance abuse coverage for its employees since 2002 showed
minimal additional costs.
In addition, expanded parity coverage could have many important long-term
benefits for the state. "This will help increase productivity [of people
with a substance use disorder], so in the long run it could save the state a
lot of money," Frierson told Psychiatric News.
The legislation enacted in Arkansas (HB 2195) in April copied federal
parity requirements for ERISA plans and applied them to insurers regulated by
state law. These new coverage requirements also specifically include insurers
that cover state and school employees.
Legislatures in California and Michigan had not finished work for the year
at press time and continued to consider enactment of parity expansions.