Legislation, which President Bush signed into law on December 2, 2002, extends the Mental Health Parity Act (MHPA) to December 31, 2003.

MHPA's Key Provisions in Brief

The MHPA applies to employer-sponsored group health plans under ERISA, and, under the Internal Revenue Code and the Public Health Service Act, to church plans and to state and local government plans that have not opted out of these provisions. It requires parity in any lifetime and annual dollar limits between benefits for medical and surgical care and benefits for mental health care. In other words, affected health plans are prohibited from setting lower dollar limits on mental health coverage than they set for other health conditions. The parity requirement also means that a plan that does not have lifetime or annual limits for medical benefits may not set such limits for mental health benefits covered under the plan.

Mental health parity is not required if it increases the plan's premium cost by more than 1 percent. Rules issued in 1997 set forth the guidelines for implementing the exception, but few plans have filed for the exception.

To see Segal's February 2002 Bulletin on MHPA, click here.

Outlook for Expanding the Reach of MHPA and Making the Law Permanent

Members of the 107th Congress had attempted to broaden MHPA's scope significantly and make it permanent. Senators Pete Domenici (R-NM) and the late Paul Wellstone (D-MN), who were the lead sponsors of MHPA in 1996, led this recent effort. Specifically, they sought to:

• Require coverage of the treatment of mental illness, and
  
  
• Require parity with all medical coverage limits, including copayments, coinsurance and deductibles, not just annual limits.

Although the attempts to expand MHPA in the 107^th Congress have failed, some members of Congress have announced that they will pursue that agenda when the new Congress convenes in January 2003.