I

107TH CONGRESS

1ST SESSION H. R. 162

To amend the Public Health Service Act, Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to prohibit

group and individual health plans from imposing treatment limitations

or financial requirements on the coverage of mental health benefits and

on the coverage of substance abuse and chemical dependency benefits

if similar limitations or requirements are not imposed on medical and

surgical benefits.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 3, 2001

Mrs. ROUKEMA (for herself, Mr. DEFAZIO, Mr. STRICKLAND, Ms. KAPTUR,

Mr. GEORGE MILLER of California, Mr. ANDREWS, Ms. DELAURO, Mrs.

MORELLA, Mr. SHAYS, Mrs. KELLY, Mr. SANDERS, Mr. LEACH, Mr.

BOEHLERT, Mr. FARR of California, Mr. MCNULTY, Mr. HINCHEY, Mr.

RAMSTAD, Mr. KLECZKA, Ms. MCCARTHY of Missouri, Mr. STARK, Mr.

RUSH, Mr. NADLER, Mr. KUCINICH, Mr. PRICE of North Carolina, Mr.

BALDACCI, Mr. GILMAN, Mrs. CAPPS, and Mr. TIERNEY) introduced the

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Education and the Workforce, and Ways and Means, 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 amend the Public Health Service Act, Employee Retirement Income Security Act of 1974, and the Internal

Revenue Code of 1986 to prohibit group and individual

health plans from imposing treatment limitations or financial requirements on the coverage of mental health

benefits and on the coverage of substance abuse and
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chemical dependency benefits if similar limitations or

requirements are not imposed on medical and surgical

benefits.

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 and

5 Substance Abuse Parity Amendments of 2001’’.

6 SEC. 2. REVISION IN LIMITS APPLIED TO MENTAL HEALTH

7 BENEFITS.

8 (a) APPLICATION TO GROUP HEALTH PLANS AND

9 GROUP HEALTH INSURANCE UNDER ERISA.—

10 (1) EXPANSION TO COVER TREATMENT LIMITA11 TIONS AND FINANCIAL REQUIREMENTS GEN12 ERALLY.—Section 712 of the Employee Retirement

13 Income Security Act of 1974 (29 U.S.C. 1185a) is

14 amended—

15 (A) in the heading, by striking ‘‘CER16 TAIN’’;

17 (B) by amending subsections (a) and (b) to

18 read as follows:

19 ‘‘(a) IN GENERAL.—In the case of a group health

20 plan (or health insurance coverage offered in connection

21 with such a plan) that provides both medical and surgical

22 benefits and mental health benefits, such plan or coverage

23 shall not impose treatment limitations or financial require-
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1 ments on the coverage of mental health benefits if similar

2 limitations or requirements are not imposed on coverage

3 of medical and surgical benefits in comparable settings

4 (including inpatient and outpatient settings).

5 ‘‘(b) CONSTRUCTION.—Nothing in this section shall

6 be construed—

7 ‘‘(1) as prohibiting a group health plan (or

8 health insurance coverage offered in connection with

9 such a plan) from—

10 ‘‘(A) negotiating separate reimbursement

11 rates and service delivery systems for different

12 benefits; or

13 ‘‘(B) managing the provision of benefits

14 through the use of pre-admission screening,

15 prior authorization of services, and other mech16 anisms designed to limit coverage of items and

17 services to those deemed to be medically nec18 essary;

19 ‘‘(2) as requiring a group health plan (or health

20 insurance coverage offered in connection with such a

21 plan) to provide any specific mental health benefits;

22 or

23 ‘‘(3) as preventing a group health plan or

24 health insurance issuer applying subsection (a) with25 out regard to benefits for preventive care.’’; and
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1 (C) in subsection (e), by striking para2 graphs (1) and (2) and inserting the following:

3 ‘‘(1) TREATMENT LIMITATIONS.—The term

4 ‘treatment limitations’ means limits on the fre5 quency of treatment, number of visits, or other lim6 its on the scope and duration of treatment, as cov7 ered by a group health plan (or health insurance

8 coverage offered in connection with such a plan).

9 Such term does not include limits on benefits or cov10 erage based solely on medical necessity.

11 ‘‘(2) FINANCIAL REQUIREMENTS.—The term

12 ‘financial requirements’ means copayments,

13 deductibles, out-of-network charges, out-of-pocket

14 contributions or fees, annual limits, and lifetime ag15 gregate limits imposed on covered individuals.’’.

16 (2) ELIMINATION OF COST EXEMPTION.—Such

17 section is further amended by striking paragraph (2)

18 of subsection (c).

19 (3) ELIMINATION OF SUNSET.—Such section is

20 further amended by striking subsection (f).

21 (4) CLERICAL AMENDMENT.—The item in the

22 table of contents in section 1 of such Act relating to

23 section 712 is amended by striking ‘‘certain’’.
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1 (b) APPLICATION TO GROUP HEALTH PLANS AND

2 HEALTH INSURANCE ISSUERS UNDER THE PUBLIC

3 HEALTH SERVICE ACT.—

4 (1) EXPANSION TO COVER TREATMENT LIMITA5 TIONS AND FINANCIAL REQUIREMENTS GEN6 ERALLY.—Section 2705 of the Public Health Service

7 Act (42 U.S.C. 300gg–5) is amended—

8 (A) in the heading, by striking ‘‘CER9 TAIN’’;

10 (B) by amending subsections (a) and (b) to

11 read as follows:

12 ‘‘(a) IN GENERAL.—In the case of a group health

13 plan (or health insurance coverage offered in connection

14 with such a plan) that provides both medical and surgical

15 benefits and mental health benefits, such plan or coverage

16 shall not impose treatment limitations or financial require17 ments on the coverage of mental health benefits if similar

18 limitations or requirements are not imposed on coverage

19 of medical and surgical benefits in comparable settings

20 (including inpatient and outpatient settings).

21 ‘‘(b) CONSTRUCTION.—Nothing in this section shall

22 be construed—

23 ‘‘(1) as prohibiting a group health plan (or

24 health insurance coverage offered in connection with

25 such a plan) from—
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1 ‘‘(A) negotiating separate reimbursement

2 rates and service delivery systems for different

3 benefits; or

4 ‘‘(B) managing the provision of benefits

5 through the use of pre-admission screening,

6 prior authorization of services, and other mech7 anisms designed to limit coverage of items and

8 services to those deemed to be medically nec9 essary;

10 ‘‘(2) as requiring a group health plan (or health

11 insurance coverage offered in connection with such a

12 plan) to provide any specific mental health benefits;

13 or

14 ‘‘(3) as preventing a group health plan or

15 health insurance issuer applying subsection (a) with16 out regard to benefits for preventive care.’’; and

17 (C) in subsection (e), by striking para18 graphs (1) and (2) and inserting the following:

19 ‘‘(1) TREATMENT LIMITATIONS.—The term

20 ‘treatment limitations’ means limits on the fre21 quency of treatment, number of visits, or other lim22 its on the scope and duration of treatment, as cov23 ered by a group health plan (or health insurance

24 coverage offered in connection with such a plan).
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1 Such term does not include limits on benefits or cov2 erage based solely on medical necessity.

3 ‘‘(2) FINANCIAL REQUIREMENTS.—The term

4 ‘financial requirements’ means copayments,

5 deductibles, out-of-network charges, out-of-pocket

6 contributions or fees, annual limits, and lifetime ag7 gregate limits imposed on covered individuals.’’.

8 (2) ELIMINATION OF COST EXEMPTION.—Such

9 section is further amended by striking paragraph (2)

10 of subsection (c).

11 (3) ELIMINATION OF SUNSET.—Such section is

12 further amended by striking subsection (f).

13 (c) APPLICATION TO GROUP HEALTH PLANS UNDER

14 THE INTERNAL REVENUE CODE OF 1986.—

15 (1) EXPANSION TO COVER TREATMENT LIMITA16 TIONS AND FINANCIAL REQUIREMENTS GEN17 ERALLY.—Section 9812 of the Internal Revenue

18 Code of 1986 (relating to parity in the application

19 of certain limits to mental health benefits) is

20 amended—

21 (A) in the heading, by striking ‘‘CER22 TAIN’’;

23 (B) by amending subsections (a) and (b) to

24 read as follows:
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1 ‘‘(a) IN GENERAL.—In the case of a group health

2 plan that provides both medical and surgical benefits and

3 mental health benefits, such plan shall not impose treat4 ment limitations or financial requirements on the coverage

5 of mental health benefits if similar limitations or require6 ments are not imposed on coverage of medical and surgical

7 benefits in comparable settings (including inpatient and

8 outpatient settings).

9 ‘‘(b) CONSTRUCTION.—Nothing in this section shall

10 be construed—

11 ‘‘(1) as prohibiting a group health plan from—

12 ‘‘(A) negotiating separate reimbursement

13 rates and service delivery systems for different

14 benefits; or

15 ‘‘(B) managing the provision of benefits

16 through the use of pre-admission screening,

17 prior authorization of services, and other mech18 anisms designed to limit coverage of items and

19 services to those deemed to be medically nec20 essary;

21 ‘‘(2) as requiring a group health plan to provide

22 any specific mental health benefits; or

23 ‘‘(3) as preventing a group health plan applying

24 subsection (a) without regard to benefits for preven25 tive care.’’; and
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1 (C) in subsection (e), by striking para2 graphs (1) and (2) and inserting the following:

3 ‘‘(1) TREATMENT LIMITATIONS.—The term

4 ‘treatment limitations’ means limits on the fre5 quency of treatment, number of visits, or other lim6 its on the scope and duration of treatment, as cov7 ered by a group health plan. Such term does not in8 clude limits on benefits or coverage based solely on

9 medical necessity.

10 ‘‘(2) FINANCIAL REQUIREMENTS.—The term

11 ‘financial requirements’ means copayments,

12 deductibles, out-of-network charges, out-of-pocket

13 contributions or fees, annual limits, and lifetime ag14 gregate limits imposed on covered individuals.’’.

15 (2) ELIMINATION OF COST EXEMPTIONS.—Such

16 section is further amended by striking paragraph (2)

17 of subsection (c).

18 (3) ELIMINATION OF SUNSET.—Such section is

19 further amended by striking subsection (f).

20 (4) CLERICAL AMENDMENT.—The item relating

21 to section 9812 in the table of sections of subchapter

22 B of chapter 100 of the Internal Revenue Code of

23 1986 is amended by striking ‘‘certain’’.

24 (d) APPLICATION TO INDIVIDUAL HEALTH INSUR25 ANCE.—Part B of title XXVII of the Public Health Serv-
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1 ice Act is amended by inserting after section 2752 the fol2 lowing new section:

3 ‘‘SEC. 2753. PARITY IN THE APPLICATION OF LIMITS TO

4 MENTAL HEALTH BENEFITS.

5 ‘‘The provisions of subsections (a), (b), and (e) of sec6 tion 2705 shall apply to health insurance coverage offered

7 by a health insurance issuer in the individual market in

8 the same manner as they apply to health insurance cov9 erage offered by a health insurance issuer in connection

10 with a group health plan.’’.

11 (e) EFFECTIVE DATES.—

12 (1) GROUP HEALTH PLANS.—

13 (A) IN GENERAL.—Subject to subpara14 graph (B), the amendments made by sub15 sections (a), (b), and (c) shall apply with re16 spect to group health plans for plan years be17 ginning on or after July 1, 2002.

18 (B) In the case of a group health plan

19 maintained pursuant to 1 or more collective

20 bargaining agreements between employee rep21 resentatives and 1 or more employers ratified

22 before the date of enactment of this Act, the

23 amendments made by subsections (a), (b), and

24 (c) shall not apply to plan years beginning be25 fore the later of—
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1 (i) the date on which the last collec2 tive bargaining agreements relating to the

3 plan terminates (determined without re4 gard to any extension thereof agreed to

5 after the date of the enactment of this

6 Act), or

7 (ii) July 1, 2002.

8 For purposes of clause (i), any plan amendment

9 made pursuant to a collective bargaining agree10 ment relating to the plan which amends the

11 plan solely to conform to any requirement

12 added by subsection (a), (b), or (c) shall not be

13 treated as a termination of such collective bar14 gaining agreement.

15 (2) INDIVIDUAL HEALTH INSURANCE COV16 ERAGE.—The amendment made by subsection (d)

17 shall apply with respect to health insurance coverage

18 offered, sold, issued, renewed, in effect, or operated

19 in the individual market on or after July 1, 2002.

20 (f) COORDINATION IN IMPLEMENTATION.—Effective

21 on the date of the enactment of this Act, section 104(1)

22 of the Health Insurance Portability and Accountability

23 Act of 1996 is amended by striking ‘‘this subtitle (and

24 the amendments made by this subtitle and section 401)’’

25 and inserting ‘‘the provisions of part 7 of subtitle B of
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1 title I of the Employee Retirement Income Security Act

2 of 1974, the provisions of parts A and C of title XXVII

3 of the Public Health Service Act, and chapter 1000 of the

4 Internal Revenue Code of 1986’’.

5 SEC. 3. PARITY IN THE APPLICATION OF LIMITS TO SUB6 STANCE ABUSE AND CHEMICAL DEPEND7 ENCY BENEFITS.

8 (a) APPLICATION TO GROUP HEALTH PLANS UNDER

9 ERISA.—

10 (1) IN GENERAL.—Part 7 of subtitle B of title

11 II of the Employee Retirement Income Security Act

12 of 1974 is amended by inserting after section 713

13 the following new section:

14 ‘‘SEC. 714. PARITY IN THE APPLICATION OF LIMITS TO SUB15 STANCE ABUSE AND CHEMICAL DEPEND16 ENCY BENEFITS.

17 ‘‘The provisions of section 712 shall apply to benefits

18 with respect to treatment of substance abuse or chemical

19 dependency in the same manner as they apply to mental

20 health benefits.’’.

21 (2) CLERICAL AMENDMENT.—The table of con22 tents in section 1 of such Act is amended by insert23 ing after the item relating to section 713 the fol24 lowing new item:

‘‘Sec. 714. Parity in the application of limits to substance abuse and chemical

dependency benefits.’’.
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1 (b) APPLICATION TO GROUP HEALTH PLANS AND

2 HEALTH INSURANCE ISSUERS UNDER THE PUBLIC

3 HEALTH SERVICE ACT.—Title XXVII of the Public

4 Health Service Act is amended by inserting after section

5 2706 the following new section:

6 ‘‘SEC. 2707. PARITY IN THE APPLICATION OF LIMITS TO

7 SUBSTANCE ABUSE AND CHEMICAL DEPEND8 ENCY BENEFITS.

9 ‘‘The provisions of section 2705 shall apply to bene10 fits with respect to treatment of substance abuse or chem11 ical dependency in the same manner as they apply to men12 tal health benefits.’’.

13 (c) APPLICATION TO GROUP HEALTH PLANS UNDER

14 THE INTERNAL REVENUE CODE OF 1986.—

15 (1) IN GENERAL.—Subchapter B of chapter

16 100 of the Internal Revenue Code of 1986 is amend17 ed by adding at the end the following new section:

18 ‘‘SEC. 9813. PARITY IN THE APPLICATION OF LIMITS TO

19 SUBSTANCE ABUSE AND CHEMICAL DEPEND20 ENCY BENEFITS.

21 ‘‘The provisions of section 9812 shall apply to bene22 fits with respect to treatment of substance abuse or chem23 ical dependency in the same manner as they apply to men24 tal health benefits.’’.
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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for such subchapter is amended by adding at

3 the end the following new item:

‘‘Sec. 9813. Parity in the application of limits to substance abuse

and chemical dependency benefits.’’.

4 (d) APPLICATION TO INDIVIDUAL HEALTH INSUR5 ANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE

6 ACT.—Part B of title XXVII of the Public Health Service

7 Act, as amended by section 2(d), is amended by inserting

8 after section 2753 the following new section:

9 ‘‘SEC. 2754. PARITY IN THE APPLICATION OF LIMITS TO

10 MENTAL HEALTH BENEFITS.

11 ‘‘The provisions of section 2753 shall apply to bene12 fits with respect to treatment of substance abuse or chem13 ical dependency in the same manner as they apply to men14 tal health benefits.’’.

15 (e) EFFECTIVE DATES.—

16 (1) GROUP HEALTH PLANS.—

17 (A) IN GENERAL.—Subject to subpara18 graph (B), the amendments made by sub19 sections (a), (b), and (c) shall apply with re20 spect to group health plans for plan years be21 ginning on or after July 1, 2002.

22 (B) In the case of a group health plan

23 maintained pursuant to 1 or more collective

24 bargaining agreements between employee rep-
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1 resentatives and 1 or more employers ratified

2 before the date of enactment of this Act, the

3 amendments made by subsections (a), (b), and

4 (c) shall not apply to plan years beginning be5 fore the later of—

6 (i) the date on which the last collec7 tive bargaining agreements relating to the

8 plan terminates (determined without re9 gard to any extension thereof agreed to

10 after the date of the enactment of this

11 Act), or

12 (ii) July 1, 2002.

13 For purposes of clause (i), any plan amendment

14 made pursuant to a collective bargaining agree15 ment relating to the plan which amends the

16 plan solely to conform to any requirement

17 added by subsection (a), (b), or (c) shall not be

18 treated as a termination of such collective bar19 gaining agreement.

20 (2) INDIVIDUAL HEALTH INSURANCE COV21 ERAGE.—The amendment made by subsection (d)

22 shall apply with respect to health insurance coverage

23 offered, sold, issued, renewed, in effect, or operated

24 in the individual market on or after July 1, 2002.

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