II

104TH CONGRESS

2D SESSION S. 2031

To provide health plan protections for individuals with a mental illness.

IN THE SENATE OF THE UNITED STATES

AUGUST 2, 1996

Mr. DOMENICI (for himself, Mr. WELLSTONE, Mr. SIMPSON, Mr. CONRAD,

Mr. WARNER, Mr. SPECTER, Mr. REID, Mr. DODD, Mr. GRASSLEY, Mrs.

KASSEBAUM, Mr. KENNEDY, Mr. BURNS, Mr. HARKIN, and Mr. MOYNIHAN) introduced the following bill; which was read twice and referred

to the Committee on Labor and Human Resources

A BILL

To provide health plan protections for individuals with a

mental illness.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Mental Health Parity

5 Act of 1996’’.

6 SEC. 2. PLAN PROTECTIONS FOR INDIVIDUALS WITH A

7 MENTAL ILLNESS.

8 (a) PERMISSIBLE COVERAGE LIMITS UNDER A

9 GROUP HEALTH PLAN.—
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1 (1) AGGREGATE LIFETIME LIMITS.—

2 (A) IN GENERAL.—With respect to a

3 group health plan offered by a health insurance

4 issuer, that applies an aggregate lifetime limit

5 to plan payments for medical or surgical serv6 ices covered under the plan, if such plan also

7 provides a mental health benefit such plan

8 shall—

9 (i) include plan payments made for

10 mental health services under the plan in

11 such aggregate lifetime limit; or

12 (ii) establish a separate aggregate life13 time limit applicable to plan payments for

14 mental health services under which the dol15 lar amount of such limit (with respect to

16 mental health services) is equal to or

17 greater than the dollar amount of the ag18 gregate lifetime limit on plan payments for

19 medical or surgical services.

20 (B) NO LIFETIME LIMIT.—With respect to

21 a group health plan offered by a health insur22 ance issuer, that does not apply an aggregate

23 lifetime limit to plan payments for medical or

24 surgical services covered under the plan, such

25 plan may not apply an aggregate lifetime limit
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1 to plan payments for mental health services

2 covered under the plan.

3 (2) ANNUAL LIMITS.—

4 (A) IN GENERAL.—With respect to a

5 group health plan offered by a health insurance

6 issuer, that applies an annual limit to plan pay7 ments for medical or surgical services covered

8 under the plan, if such plan also provides a

9 mental health benefit such plan shall—

10 (i) include plan payments made for

11 mental health services under the plan in

12 such annual limit; or

13 (ii) establish a separate annual limit

14 applicable to plan payments for mental

15 health services under which the dollar

16 amount of such limit (with respect to men17 tal health services) is equal to or greater

18 than the dollar amount of the annual limit

19 on plan payments for medical or surgical

20 services.

21 (B) NO ANNUAL LIMIT.—With respect to a

22 group health plan offered by a health insurance

23 issuer, that does not apply an annual limit to

24 plan payments for medical or surgical services

25 covered under the plan, such plan may not
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1 apply an annual limit to plan payments for

2 mental health services covered under the plan.

3 (b) RULE OF CONSTRUCTION.—

4 (1) IN GENERAL.—Nothing in this section shall

5 be construed as prohibiting a group health plan of6 fered by a health insurance issuer, from—

7 (A) utilizing other forms of cost contain8 ment not prohibited under subsection (a); or

9 (B) applying requirements that make dis10 tinctions between acute care and chronic care.

11 (2) NONAPPLICABILITY.—This section shall not

12 apply to—

13 (A) substance abuse or chemical depend14 ency benefits; or

15 (B) health benefits or health plans paid for

16 under title XVIII or XIX of the Social Security

17 Act.

18 (c) SMALL EMPLOYER EXEMPTION.—

19 (1) IN GENERAL.—This section shall not apply

20 to plans maintained by employers that employ less

21 than 26 employees.

22 (2) APPLICATION OF CERTAIN RULES IN DE23 TERMINATION OF EMPLOYER SIZE.—For purposes of

24 this subsection—
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1 (A) APPLICATION OF AGGREGATION RULE

2 FOR EMPLOYERS.—All persons treated as a sin3 gle employer under subsection (b), (c), (m), or

4 (o) of section 414 of the Internal Revenue Code

5 of 1986 shall be treated as 1 employer.

6 (B) EMPLOYERS NOT IN EXISTENCE IN

7 PRECEDING YEAR.—In the case of an employer

8 which was not in existence throughout the pre9 ceding calendar year, the determination of

10 whether such employer is a small employer shall

11 be based on the average number of employees

12 that it is reasonably expected such employer

13 will employ on business days in the current cal14 endar year.

15 (C) PREDECESSORS.—Any reference in

16 this subsection to an employer shall include a

17 reference to any predecessor of such employer.

18 SEC. 3. DEFINITIONS.

19 For purposes of this Act:

20 (1) GROUP HEALTH PLAN.—

21 (A) IN GENERAL.—The term ‘‘group

22 health plan’’ means an employee welfare benefit

23 plan (as defined in section 3(1) of the Em24 ployee Retirement Income Security Act of

25 1974) to the extent that the plan provides med-
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1 ical care (as defined in paragraph (2)) and in2 cluding items and services paid for as medical

3 care) to employees or their dependents (as de4 fined under the terms of the plan) directly or

5 through insurance, reimbursement, or other6 wise.

7 (B) MEDICAL CARE.—The term ‘‘medical

8 care’’ means amounts paid for—

9 (i) the diagnosis, cure, mitigation,

10 treatment, or prevention of disease, or

11 amounts paid for the purpose of affecting

12 any structure or function of the body,

13 (ii) amounts paid for transportation

14 primarily for and essential to medical care

15 referred to in clause (i), and

16 (iii) amounts paid for insurance cover17 ing medical care referred to in clauses (i)

18 and (ii).

19 (2) HEALTH INSURANCE COVERAGE.—The term

20 ‘‘health insurance coverage’’ means benefits consist21 ing of medical care (provided directly, through insur22 ance or reimbursement, or otherwise and including

23 items and services paid for as medical care) under

24 any hospital or medical service policy or certificate,

25 hospital or medical service plan contract, or health
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1 maintenance organization contract offered by a

2 health insurance issuer.

3 (3) HEALTH INSURANCE ISSUER.—The term

4 ‘‘health insurance issuer’’ means an insurance com5 pany, insurance service, or insurance organization

6 (including a health maintenance organization, as de7 fined in paragraph (4)) which is licensed to engage

8 in the business of insurance in a State and which is

9 subject to State law which regulates insurance (with10 in the meaning of section 514(b)(2) of the Employee

11 Retirement Income Security Act of 1974). Such

12 term does not include a group health plan.

13 (4) HEALTH MAINTENANCE ORGANIZATION.—

14 The term ‘‘health maintenance organization’’

15 means—

16 (A) a federally qualified health mainte17 nance organization (as defined in section

18 1301(a) of the Public Health Service Act),

19 (B) an organization recognized under State

20 law as a health maintenance organization, or

21 (C) a similar organization regulated under

22 State law for solvency in the same manner and

23 to the same extent as such a health mainte24 nance organization.
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1 (5) STATE.—The term ‘‘State’’ means each of

2 the several States, the District of Columbia, Puerto

3 Rico, the Virgin Islands, Guam, American Samoa,

4 and the Northern Mariana Islands.

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