I

104TH CONGRESS

2D SESSION H. R. 4058

To provide for parity for mental health benefits under group health plans.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 11, 1996

Mrs. ROUKEMA (for herself, Mr. DEFAZIO, Mr. WISE, Mrs. JOHNSON of Connecticut, Mrs. MORELLA, Ms. NORTON, Ms. KAPTUR, Mr. MCCOLLUM,

Mr. KASICH, and Mr. HUTCHINSON) introduced the following bill; which

was referred to the Committee on Commerce, and in addition to the Committees on Economic and Educational Opportunities, and Government

Reform and Oversight, for a period to be subsequently determined by the

Speaker, in each case for consideration of such provisions as fall within

the jurisdiction of the committee concerned

A BILL

To provide for parity for mental health benefits under group

health plans.

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’’.
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1 SEC. 2. PLAN PROTECTIONS FOR INDIVIDUALS WITH A

2 MENTAL ILLNESS.

3 (a) PERMISSIBLE COVERAGE LIMITS UNDER A

4 GROUP HEALTH PLAN.—

5 (1) AGGREGATE LIFETIME LIMITS.—

6 (A) IN GENERAL.—With respect to a

7 group health plan offered by a health insurance

8 issuer, that applies an aggregate lifetime limit

9 to plan payments for medical or surgical serv10 ices covered under the plan, if such plan also

11 provides a mental health benefit such plan

12 shall—

13 (i) include plan payments made for

14 mental health services under the plan in

15 such aggregate lifetime limit; or

16 (ii) establish a separate aggregate life17 time limit applicable to plan payments for

18 mental health services under which the dol19 lar amount of such limit (with respect to

20 mental health services) is equal to or

21 greater than the dollar amount of the ag22 gregate lifetime limit on plan payments for

23 medical or surgical services.

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

25 a group health plan offered by a health insur26 ance issuer, that does not apply an aggregate
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1 lifetime limit to plan payments for medical or

2 surgical services covered under the plan, such

3 plan may not apply an aggregate lifetime limit

4 to plan payments for mental health services

5 covered under the plan.

6 (2) ANNUAL LIMITS.—

7 (A) IN GENERAL.—With respect to a

8 group health plan offered by a health insurance

9 issuer, that applies an annual limit to plan pay10 ments for medical or surgical services covered

11 under the plan, if such plan also provides a

12 mental health benefit such plan shall—

13 (i) include plan payments made for

14 mental health services under the plan in

15 such annual limit; or

16 (ii) establish a separate annual limit

17 applicable to plan payments for mental

18 health services under which the dollar

19 amount of such limit (with respect to men20 tal health services) is equal to or greater

21 than the dollar amount of the annual limit

22 on plan payments for medical or surgical

23 services.

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

25 group health plan offered by a health insurance
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1 issuer, that does not apply an annual limit to

2 plan payments for medical or surgical services

3 covered under the plan, such plan may not

4 apply an annual limit to plan payments for

5 mental health services covered under the plan.

6 (b) RULE OF CONSTRUCTION.—

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

8 be construed as prohibiting a group health plan of9 fered by a health insurance issuer, from—

10 (A) utilizing other forms of cost contain11 ment not prohibited under subsection (a); or

12 (B) applying requirements that make dis13 tinctions between acute care and chronic care.

14 (2) NONAPPLICABILITY.—This section shall not

15 apply to—

16 (A) substance abuse or chemical depend17 ency benefits; or

18 (B) health benefits or health plans paid for

19 under title XVIII or XIX of the Social Security

20 Act.

21 (3) STATE LAW.—Nothing in this section shall

22 be construed to preempt any State law that provides

23 for greater parity with respect to mental health ben24 efits than that required under this section.

25 (c) SMALL EMPLOYER EXEMPTION.—
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1 (1) IN GENERAL.—This section shall not apply

2 to plans maintained by employers that employ less

3 than 26 employees.

4 (2) APPLICATION OF CERTAIN RULES IN DE5 TERMINATION OF EMPLOYER SIZE.—For purposes of

6 this subsection—

7 (A) APPLICATION OF AGGREGATION RULE

8 FOR EMPLOYERS.—All persons treated as a sin9 gle employer under subsection (b), (c), (m), or

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

11 of 1986 shall be treated as 1 employer.

12 (B) EMPLOYERS NOT IN EXISTENCE IN

13 PRECEDING YEAR.—In the case of an employer

14 which was not in existence throughout the pre15 ceding calendar year, the determination of

16 whether such employer is a small employer shall

17 be based on the average number of employees

18 that it is reasonably expected such employer

19 will employ on business days in the current cal20 endar year.

21 (C) PREDECESSORS.—Any reference in

22 this subsection to an employer shall include a

23 reference to any predecessor of such employer.

24 SEC. 3. DEFINITIONS.

25 For purposes of this Act:
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1 (1) GROUP HEALTH PLAN.—

2 (A) IN GENERAL.—The term ‘‘group

3 health plan’’ means an employee welfare benefit

4 plan (as defined in section 3(1) of the Em5 ployee Retirement Income Security Act of

6 1974) to the extent that the plan provides med7 ical care (as defined in paragraph (2)) and in8 cluding items and services paid for as medical

9 care) to employees or their dependents (as de10 fined under the terms of the plan) directly or

11 through insurance, reimbursement, or other12 wise.

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

14 care’’ means amounts paid for—

15 (i) the diagnosis, cure, mitigation,

16 treatment, or prevention of disease, or

17 amounts paid for the purpose of affecting

18 any structure or function of the body,

19 (ii) amounts paid for transportation

20 primarily for and essential to medical care

21 referred to in clause (i), and

22 (iii) amounts paid for insurance cover23 ing medical care referred to in clauses (i)

24 and (ii).
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1 (2) HEALTH INSURANCE COVERAGE.—The term

2 ‘‘health insurance coverage’’ means benefits consist3 ing of medical care (provided directly, through insur4 ance or reimbursement, or otherwise and including

5 items and services paid for as medical care) under

6 any hospital or medical service policy or certificate,

7 hospital or medical service plan contract, or health

8 maintenance organization contract offered by a

9 health insurance issuer.

10 (3) HEALTH INSURANCE ISSUER.—The term

11 ‘‘health insurance issuer’’ means an insurance com12 pany, insurance service, or insurance organization

13 (including a health maintenance organization, as de14 fined in paragraph (4)) which is licensed to engage

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

16 subject to State law which regulates insurance (with17 in the meaning of section 514(b)(2) of the Employee

18 Retirement Income Security Act of 1974), and in19 cludes a plan sponsor described in section 3(16)(B)

20 of the Employee Retirement Income Security Act of

21 1974 in the case of a group health plan which is an

22 employee welfare benefit plan (as defined in section

23 3(1) of such Act). Such term does not include a

24 group health plan.
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1 (4) HEALTH MAINTENANCE ORGANIZATION.—

2 The term ‘‘health maintenance organization’’

3 means—

4 (A) a federally qualified health mainte5 nance organization (as defined in section

6 1301(a) of the Public Health Service Act),

7 (B) an organization recognized under State

8 law as a health maintenance organization, or

9 (C) a similar organization regulated under

10 State law for solvency in the same manner and

11 to the same extent as such a health mainte12 nance organization.

13 (5) STATE.—The term ‘‘State’’ means each of

14 the several States, the District of Columbia, Puerto

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

16 and the Northern Mariana Islands.

17 SEC. 4. SUNSET.

18 Section 2 shall cease to be effective on September 30,

19 2001.

20 SEC. 5. FEDERAL EMPLOYEE HEALTH BENEFIT PROGRAM.

21 For the Federal Employee Health Benefit Program,

22 sections 2 and 3 will take effect on October 1, 1997.

23 SEC. 6. EXEMPTION.

24 Notwithstanding the provisions of this Act, if the pro25 visions of this Act result in a 1 percent or greater increase
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1 in the cost of a group health plan’s premiums, the pur2 chaser is exempt from the provisions of this Act.

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