Newborns' and Mothers' Health Protection and Mental Health Parity Implementation Amendments of 1996

Summary: Newborns' and Mothers' Health Protection and Mental Health Parity Implementation Amendments of 1996 - Amends the Internal Revenue Code (as amended by the Health Insurance Portability and Accountability Act of 1996) with respect to group health plan requirements to:  (1) provide standards for benefits to mothers and newborns; and (2) provide for parity of specified mental health benefits with surgical and medical benefits.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Newborns' and Mothers' Health 
Protection and Mental Health Parity Implementation Amendments of 
1996''.

SEC. 2. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986 TO IMPLEMENT 
              THE NEWBORNS' AND MOTHERS' HEALTH PROTECTION ACT OF 1996 
              AND THE MENTAL HEALTH PARITY ACT OF 1996.

    (a) In General.--Subtitle K of the Internal Revenue Code of 1986 
(as added by section 401(a) of the Health Insurance Portability and 
Accountability Act of 1996) is amended--
            (1) by striking all that precedes section 9801 and 
        inserting the following:

              ``Subtitle K--Group Health Plan Requirements

                              ``Chapter 100. Group health plan 
                                        requirements.

             ``CHAPTER 100--GROUP HEALTH PLAN REQUIREMENTS

                              ``Subchapter A. Requirements relating to 
                                        portability, access, and 
                                        renewability.
                              ``Subchapter B. Other requirements.
                              ``Subchapter C. General provisions.

   ``Subchapter A--Requirements Relating to Portability, Access, and 
                              Renewability

                              ``Sec. 9801. Increased portability 
                                        through limitation on 
                                        preexisting condition 
                                        exclusions.
                              ``Sec. 9802. Prohibiting discrimination 
                                        against individual participants 
                                        and beneficiaries based on 
                                        health status.
                              ``Sec. 9803. Guaranteed renewability in 
                                        multiemployer plans and certain 
                                        multiple employer welfare 
                                        arrangements.'',
            (2) by redesignating sections 9804, 9805, and 9806 as 
        sections 9831, 9832, and 9833, respectively,
            (3) by inserting before section 9831 (as so redesignated) 
        the following:

                   ``Subchapter C--General Provisions

                              ``Sec. 9831. General exceptions.
                              ``Sec. 9832. Definitions.
                              ``Sec. 9833. Regulations.'', and
            (4) by inserting after section 9803 the following:

                   ``Subchapter B--Other Requirements

                              ``Sec. 9811. Standards relating to 
                                        benefits for mothers and 
                                        newborns.
                              ``Sec. 9812. Parity in the application of 
                                        certain limits to mental health 
                                        benefits.

``SEC. 9811. STANDARDS RELATING TO BENEFITS FOR MOTHERS AND NEWBORNS.

    ``(a) Requirements for Minimum Hospital Stay Following Birth.--
            ``(1) In general.--A group health plan may not--
                    ``(A) except as provided in paragraph (2)--
                            ``(i) restrict benefits for any hospital 
                        length of stay in connection with childbirth 
                        for the mother or newborn child, following a 
                        normal vaginal delivery, to less than 48 hours, 
                        or
                            ``(ii) restrict benefits for any hospital 
                        length of stay in connection with childbirth 
                        for the mother or newborn child, following a 
                        cesarean section, to less than 96 hours; or
                    ``(B) require that a provider obtain authorization 
                from the plan or the issuer for prescribing any length 
                of stay required under subparagraph (A) (without regard 
                to paragraph (2)).
            ``(2) Exception.--Paragraph (1)(A) shall not apply in 
        connection with any group health plan in any case in which the 
        decision to discharge the mother or her newborn child prior to 
        the expiration of the minimum length of stay otherwise required 
        under paragraph (1)(A) is made by an attending provider in 
        consultation with the mother.
    ``(b) Prohibitions.--A group health plan may not--
            ``(1) deny to the mother or her newborn child eligibility, 
        or continued eligibility, to enroll or to renew coverage under 
        the terms of the plan, solely for the purpose of avoiding the 
        requirements of this section;
            ``(2) provide monetary payments or rebates to mothers to 
        encourage such mothers to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such provider 
        provided care to an individual participant or beneficiary in 
        accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to 
        an individual participant or beneficiary in a manner 
        inconsistent with this section; or
            ``(5) subject to subsection (c)(3), restrict benefits for 
        any portion of a period within a hospital length of stay 
        required under subsection (a) in a manner which is less 
        favorable than the benefits provided for any preceding portion 
        of such stay.
    ``(c) Rules of Construction.--
            ``(1) Nothing in this section shall be construed to require 
        a mother who is a participant or beneficiary--
                    ``(A) to give birth in a hospital; or
                    ``(B) to stay in the hospital for a fixed period of 
                time following the birth of her child.
            ``(2) This section shall not apply with respect to any 
        group health plan which does not provide benefits for hospital 
        lengths of stay in connection with childbirth for a mother or 
        her newborn child.
            ``(3) Nothing in this section shall be construed as 
        preventing a group health plan from imposing deductibles, 
        coinsurance, or other cost-sharing in relation to benefits for 
        hospital lengths of stay in connection with childbirth for a 
        mother or newborn child under the plan, except that such 
        coinsurance or other cost-sharing for any portion of a period 
        within a hospital length of stay required under subsection (a) 
        may not be greater than such coinsurance or cost-sharing for 
        any preceding portion of such stay.
    ``(d) Level and Type of Reimbursements.--Nothing in this section 
shall be construed to prevent a group health plan from negotiating the 
level and type of reimbursement with a provider for care provided in 
accordance with this section.
    ``(f) Preemption; Exception for Health Insurance Coverage in 
Certain States.--The requirements of this section shall not apply with 
respect to health insurance coverage if there is a State law (including 
a decision, rule, regulation, or other State action having the effect 
of law) for a State that regulates such coverage that is described in 
any of the following paragraphs:
            ``(1) Such State law requires such coverage to provide for 
        at least a 48-hour hospital length of stay following a normal 
        vaginal delivery and at least a 96-hour hospital length of stay 
        following a cesarean section.
            ``(2) Such State law requires such coverage to provide for 
        maternity and pediatric care in accordance with guidelines 
        established by the American College of Obstetricians and 
        Gynecologists, the American Academy of Pediatrics, or other 
        established professional medical associations.
            ``(3) Such State law requires, in connection with such 
        coverage for maternity care, that the hospital length of stay 
        for such care is left to the decision of (or required to be 
        made by) the attending provider in consultation with the 
        mother.

``SEC. 9812. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL 
              HEALTH BENEFITS.

    ``(a) In General.--
            ``(1) Aggregate lifetime limits.--In the case of a group 
        health plan that provides both medical and surgical benefits 
        and mental health benefits--
                    ``(A) No lifetime limit.--If the plan does not 
                include an aggregate lifetime limit on substantially 
                all medical and surgical benefits, the plan or coverage 
                may not impose any aggregate lifetime limit on mental 
                health benefits.
                    ``(B) Lifetime limit.--If the plan includes an 
                aggregate lifetime limit on substantially all medical 
                and surgical benefits (in this paragraph referred to as 
                the `applicable lifetime limit'), the plan shall 
                either--
                            ``(i) apply the applicable lifetime limit 
                        both to the medical and surgical benefits to 
                        which it otherwise would apply and to mental 
                        health benefits and not distinguish in the 
                        application of such limit between such medical 
and surgical benefits and mental health benefits; or
                            ``(ii) not include any aggregate lifetime 
                        limit on mental health benefits that is less 
                        than the applicable lifetime limit.
                    ``(C) Rule in case of different limits.--In the 
                case of a plan that is not described in subparagraph 
                (A) or (B) and that includes no or different aggregate 
                lifetime limits on different categories of medical and 
                surgical benefits, the Secretary shall establish rules 
                under which subparagraph (B) is applied to such plan 
                with respect to mental health benefits by substituting 
                for the applicable lifetime limit an average aggregate 
                lifetime limit that is computed taking into account the 
                weighted average of the aggregate lifetime limits 
                applicable to such categories.
            ``(2) Annual limits.--In the case of a group health plan 
        that provides both medical and surgical benefits and mental 
        health benefits--
                    ``(A) No annual limit.--If the plan does not 
                include an annual limit on substantially all medical 
                and surgical benefits, the plan or coverage may not 
                impose any annual limit on mental health benefits.
                    ``(B) Annual limit.--If the plan includes an annual 
                limit on substantially all medical and surgical 
                benefits (in this paragraph referred to as the 
                `applicable annual limit'), the plan shall either--
                            ``(i) apply the applicable annual limit 
                        both to medical and surgical benefits to which 
                        it otherwise would apply and to mental health 
                        benefits and not distinguish in the application 
                        of such limit between such medical and surgical 
                        benefits and mental health benefits; or
                            ``(ii) not include any annual limit on 
                        mental health benefits that is less than the 
                        applicable annual limit.
                    ``(C) Rule in case of different limits.--In the 
                case of a plan that is not described in subparagraph 
                (A) or (B) and that includes no or different annual 
                limits on different categories of medical and surgical 
                benefits, the Secretary shall establish rules under 
                which subparagraph (B) is applied to such plan with 
                respect to mental health benefits by substituting for 
                the applicable annual limit an average annual limit 
                that is computed taking into account the weighted 
                average of the annual limits applicable to such 
                categories.
    ``(b) Construction.--Nothing in this section shall be construed--
            ``(1) as requiring a group health plan to provide any 
        mental health benefits; or
            ``(2) in the case of a group health plan that provides 
        mental health benefits, as affecting the terms and conditions 
        (including cost sharing, limits on numbers of visits or days of 
        coverage, and requirements relating to medical necessity) 
        relating to the amount, duration, or scope of mental health 
        benefits under the plan, except as specifically provided in 
        subsection (a) (in regard to parity in the imposition of 
        aggregate lifetime limits and annual limits for mental health 
        benefits).
    ``(c) Exemptions.--
            ``(1) Small employer exemption.--This section shall not 
        apply to any group health plan for any plan year of a small 
        employer (as defined in section 4980D(d)(2)).
            ``(2) Increased cost exemption.--This section shall not 
        apply with respect to a group health plan if the application of 
        this section to such plan results in an increase in the cost 
        under the plan of at least 1 percent.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Aggregate lifetime limit.--The term `aggregate 
        lifetime limit' means, with respect to benefits under a group 
        health plan, a dollar limitation on the total amount that may 
        be paid with respect to such benefits under the plan with 
        respect to an individual or other coverage unit.
            ``(2) Annual limit.--The term `annual limit' means, with 
        respect to benefits under a group health plan, a dollar 
        limitation on the total amount of benefits that may be paid 
        with respect to such benefits in a 12-month period under the 
        plan with respect to an individual or other coverage unit.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan, but 
        does not include mental health benefits.
            ``(4) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to mental health 
        services, as defined under the terms of the plan, but does not 
        include benefits with respect to treatment of substance abuse 
        or chemical dependency.
    ``(f) Sunset.--This section shall not apply to benefits for 
services furnished on or after September 30, 2001.''
    (b) Conforming Amendments.--
            (1) Chapter 100 of such Code (as added by section 401 of 
        the Health Insurance Portability and Accountability Act of 1996 
        and as previously amended by this section) is further amended--
                    (A) in the last sentence of section 9801(c)(1), by 
                striking ``section 9805(c)'' and inserting ``section 
                9832(c)'';
                    (B) in section 9831(b), by striking ``9805(c)(1)'' 
                and inserting ``9832(c)(1)'';
                    (C) in section 9831(c)(1), by striking 
                ``9805(c)(2)'' and inserting ``9832(c)(2)'';
                    (D) in section 9831(c)(2), by striking 
                ``9805(c)(3)'' and inserting ``9832(c)(3)''; and
                    (E) in section 9831(c)(3), by striking 
                ``9805(c)(4)'' and inserting ``9832(c)(4)''.
            (2) Section 4980D of such Code (as added by section 402 of 
        the Health Insurance Portability and Accountability Act of 
        1996) is amended--
                    (A) in subsection (c)(3)(B)(i)(I), by striking 
                ``9805(d)(3)'' and inserting ``9832(d)(3)'';
                    (B) in subsection (d)(1), by inserting ``(other 
                than a failure attributable to section 9811)'' after 
                ``on any failure'';
                    (C) in subsection (d)(3), by striking ``9805'' and 
                inserting ``9832'';
                    (D) in subsection (f)(1), by striking ``9805(a)'' 
                and inserting ``9832(a)''.
            (3) The table of subtitles for such Code is amended by 
        striking the item relating to subtitle K (as added by section 
        401(b) of the Health Insurance Portability and Accountability 
        Act of 1996) and inserting the following new item:

                              ``Subtitle K. Group health plan 
                                        requirements.''
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to group health plans for plan years beginning on or 
after January 1, 1998.