I 

110TH CONGRESS 

1ST SESSION H. R. 1424 

To amend section 712 of the Employee Retirement Income Security Act 

of 1974, section 2705 of the Public Health Service Act, and section 

9812 of the Internal Revenue Code of 1986 to require equity in the 

provision of mental health and substance-related disorder benefits under 

group health plans. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 9, 2007 

Mr. KENNEDY (for himself, Mr. RAMSTAD, Mr. ABERCROMBIE, Mr. ACKERMAN, Mr. ALEXANDER, Mr. ALLEN, Mr. ANDREWS, Mr. ARCURI, Mr. 

BACA, Mr. BACHUS, Mr. BAIRD, Ms. BALDWIN, Mr. BARROW, Ms. BEAN, 

Mr. BECERRA, Ms. BERKLEY, Mr. BERMAN, Mr. BERRY, Mr. BISHOP of 

Georgia, Mr. BISHOP of New York, Mr. BLUMENAUER, Ms. BORDALLO, 

Mr. BOREN, Mr. BOSWELL, Mr. BOUCHER, Mr. BOYD of Florida, Mr. 

BRADY of Pennsylvania, Mr. BRALEY of Iowa, Ms. CORRINE BROWN of 

Florida, Mr. BUTTERFIELD, Mrs. CAPPS, Mr. CAPUANO, Mr. CARDOZA, 

Mr. CARNAHAN, Mr. CARNEY, Ms. CARSON, Ms. CASTOR, Mr. CHANDLER, Mrs. CHRISTENSEN, Ms. CLARKE, Mr. CLAY, Mr. CLEAVER, Mr. 

CLYBURN, Mr. COHEN, Mr. CONYERS, Mr. COOPER, Mr. COSTA, Mr. 

COSTELLO, Mr. COURTNEY, Mr. CROWLEY, Mrs. CUBIN, Mr. CUELLAR, 

Mr. CUMMINGS, Mr. DAVIS of Alabama, Mr. DAVIS of Illinois, Mrs. 

DAVIS of California, Mr. LINCOLN DAVIS of Tennessee, Mr. DEFAZIO, 

Ms. DEGETTE, Mr. DELAHUNT, Ms. DELAURO, Mr. DICKS, Mr. 

DOGGETT, Mr. DONNELLY, Mr. DOYLE, Mr. EDWARDS, Mr. ELLISON, 

Mr. ELLSWORTH, Mr. EMANUEL, Mrs. EMERSON, Mr. ENGEL, Mr. 

ENGLISH of Pennsylvania, Ms. ESHOO, Mr. ETHERIDGE, Mr. 

FALEOMAVAEGA, Mr. FARR, Mr. FATTAH, Mr. FERGUSON, Mr. FILNER, 

Mr. FRANK of Massachusetts, Mr. FRELINGHUYSEN, Ms. GIFFORDS, Mr. 

GILCHREST, Mrs. GILLIBRAND, Mr. GONZALEZ, Mr. GORDON of Tennessee, Mr. AL GREEN of Texas, Mr. GENE GREEN of Texas, Mr. 

GRIJALVA, Mr. GUTIERREZ, Mr. HALL of New York, Mr. HARE, Ms. 

HARMAN, Mr. HASTINGS of Florida, Ms. HERSETH, Mr. HIGGINS, Mr. 

HINCHEY, Mr. HINOJOSA, Ms. HIRONO, Mr. HODES, Mr. HOLDEN, Mr. 

HOLT, Mr. HONDA, Ms. HOOLEY, Mr. HOYER, Mr. INSLEE, Mr. ISRAEL, 

Mr. JACKSON of Illinois, Ms. JACKSON-LEE of Texas, Mr. JEFFERSON, 

Ms. EDDIE BERNICE JOHNSON of Texas, Mr. JOHNSON of Georgia, Mrs. 

JONES of Ohio, Mr. KAGEN, Mr. KANJORSKI, Ms. KAPTUR, Mr. KELLER

of Florida, Mr. KILDEE, Ms. KILPATRICK, Mr. KIND, Mr. KING of New 


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York, Mr. KIRK, Mr. KLEIN of Florida, Mr. KUCINICH, Mr. LAHOOD, 

Mr. LAMPSON, Mr. LANGEVIN, Mr. LANTOS, Mr. LARSEN of Washington, 

Mr. LARSON of Connecticut, Mr. LATOURETTE, Ms. LEE, Mr. LEVIN, 

Mr. LEWIS of Georgia, Mr. LIPINSKI, Mr. LOBIONDO, Mr. LOEBSACK, 

Ms. ZOE LOFGREN of California, Mrs. LOWEY, Mr. LYNCH, Mrs. 

MALONEY of New York, Mr. MARKEY, Mr. MARSHALL, Mr. MATHESON, 

Ms. MATSUI, Mrs. MCCARTHY of New York, Ms. MCCOLLUM of Minnesota, Mr. MCDERMOTT, Mr. MCGOVERN, Mr. MCHUGH, Mr. MCINTYRE, Mr. MCNERNEY, Mr. MCNULTY, Mr. MEEHAN, Mr. MEEK of Florida, Mr. MEEKS of New York, Mr. MICA, Mr. MICHAUD, Ms. 

MILLENDER-MCDONALD, Mr. GEORGE MILLER of California, Mr. MOLLOHAN, Mr. MOORE of Kansas, Ms. MOORE of Wisconsin, Mr. MORAN

of Virginia, Mr. MURPHY of Connecticut, Mr. TIM MURPHY of Pennsylvania, Mr. MURTHA, Mr. NADLER, Mrs. NAPOLITANO, Mr. NEAL of Massachusetts, Ms. NORTON, Mr. OBERSTAR, Mr. OBEY, Mr. OLVER, Mr. 

ORTIZ, Mr. PALLONE, Mr. PASCRELL, Mr. PASTOR, Mr. PAYNE, Mr. 

PERLMUTTER, Mr. PETERSON of Minnesota, Mr. PICKERING, Mr. 

PLATTS, Mr. POMEROY, Mr. PRICE of North Carolina, Mr. RAHALL, Mr. 

RANGEL, Mr. RENZI, Mr. REYES, Mr. RODRIGUEZ, Ms. ROS-LEHTINEN, 

Mr. ROSS, Mr. ROTHMAN, Ms. ROYBAL-ALLARD, Mr. RUPPERSBERGER, 

Mr. RUSH, Mr. RYAN of Ohio, Mr. SALAZAR, Ms. LINDA T. SA ́NCHEZ

of California, Ms. LORETTA SANCHEZ of California, Mr. SARBANES, Mr. 

SAXTON, Ms. SCHAKOWSKY, Mr. SCHIFF, Mrs. SCHMIDT, Ms. 

WASSERMAN SCHULTZ, Ms. SCHWARTZ, Mr. SCOTT of Georgia, Mr. 

SCOTT of Virginia, Mr. SERRANO, Mr. SESTAK, Mr. SHAYS, Ms. SHEAPORTER, Mr. SHERMAN, Mr. SIRES, Mr. SKELTON, Ms. SLAUGHTER, Mr. 

SMITH of Washington, Mr. SMITH of New Jersey, Mr. SNYDER, Ms. 

SOLIS, Mr. SPACE, Mr. SPRATT, Mr. STARK, Mr. STUPAK, Mr. SULLIVAN, Ms. SUTTON, Mr. TANNER, Mrs. TAUSCHER, Mr. THOMPSON of 

Mississippi, Mr. THOMPSON of California, Mr. TIERNEY, Mr. TOWNS, Mr. 

UDALL of Colorado, Mr. UDALL of New Mexico, Mr. UPTON, Mr. VAN

HOLLEN, Ms. VELA ́ZQUEZ, Mr. VISCLOSKY, Mr. WALSH of New York, 

Mr. WALZ of Minnesota, Mr. WAMP, Ms. WATERS, Ms. WATSON, Mr. 

WATT, Mr. WAXMAN, Mr. WEINER, Mr. WELCH of Vermont, Mr. 

WEXLER, Mr. WILSON of Ohio, Mr. WILSON of South Carolina, Ms. 

WOOLSEY, Mr. WU, Mr. WYNN, Mr. YARMUTH, and Mr. YOUNG of Alaska) introduced the following bill; which was referred to the Committee on 

Energy and Commerce, and in addition to the Committees on Education 

and Labor 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 section 712 of the Employee Retirement Income 

Security Act of 1974, section 2705 of the Public Health 


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Service Act, and section 9812 of the Internal Revenue 

Code of 1986 to require equity in the provision of mental 

health and substance-related disorder 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Paul Wellstone Mental Health and Addiction Equity Act 

6 of 2007’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Amendments to the Employee Retirement Income Security Act of 1974. 

Sec. 3. Amendments to the Public Health Service Act relating to the group 

market. 

Sec. 5. Amendments to the Internal Revenue Code of 1986. 

Sec. 5. Government Accountability Office studies and reports. 

9 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN10 COME SECURITY ACT OF 1974. 

11 (a) EXTENSION OF PARITY TO TREATMENT LIMITS

12 AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 

13 712 of the Employee Retirement Income Security Act of 

14 1974 (29 U.S.C. 1185a) is amended— 

15 (1) in subsection (a), by adding at the end the 

16 following new paragraphs: 

17 ‘‘(3) TREATMENT LIMITS.— 

18 ‘‘(A) NO TREATMENT LIMIT.—If the plan 

19 or coverage does not include a treatment limit 


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1 (as defined in subparagraph (D)) on substan2 tially all medical and surgical benefits in any 

3 category of items or services, the plan or cov4 erage may not impose any treatment limit on 

5 mental health and substance-related disorder 

6 benefits that are classified in the same category 

7 of items or services. 

8 ‘‘(B) TREATMENT LIMIT.—If the plan or 

9 coverage includes a treatment limit on substan10 tially all medical and surgical benefits in any 

11 category of items or services, the plan or cov12 erage may not impose such a treatment limit on 

13 mental health and substance-related disorder 

14 benefits for items and services within such cat15 egory that are more restrictive than the pre16 dominant treatment limit that is applicable to 

17 medical and surgical benefits for items and 

18 services within such category. 

19 ‘‘(C) CATEGORIES OF ITEMS AND SERV20 ICES FOR APPLICATION OF TREATMENT LIMITS

21 AND BENEFICIARY FINANCIAL REQUIRE22 MENTS.—For purposes of this paragraph and 

23 paragraph (4), there shall be the following four 

24 categories of items and services for benefits, 

25 whether medical and surgical benefits or mental 


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1 health and substance-related disorder benefits, 

2 and all medical and surgical benefits and all 

3 mental health and substance related benefits 

4 shall be classified into one of the following cat5 egories: 

6 ‘‘(i) INPATIENT, IN-NETWORK.—Items 

7 and services furnished on an inpatient 

8 basis and within a network of providers es9 tablished or recognized under such plan or 

10 coverage. 

11 ‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 

12 Items and services furnished on an inpa13 tient basis and outside any network of pro14 viders established or recognized under such 

15 plan or coverage. 

16 ‘‘(iii) OUTPATIENT, IN-NETWORK.— 

17 Items and services furnished on an out18 patient basis and within a network of pro19 viders established or recognized under such 

20 plan or coverage. 

21 ‘‘(iv) OUTPATIENT, OUT-OF-NET22 WORK.—Items and services furnished on 

23 an outpatient basis and outside any net24 work of providers established or recognized 

25 under such plan or coverage. 


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1 ‘‘(D) TREATMENT LIMIT DEFINED.—For 

2 purposes of this paragraph, the term ‘treatment 

3 limit’ means, with respect to a plan or coverage, 

4 limitation on the frequency of treatment, num5 ber of visits or days of coverage, or other simi6 lar limit on the duration or scope of treatment 

7 under the plan or coverage. 

8 ‘‘(E) PREDOMINANCE.—For purposes of 

9 this subsection, a treatment limit or financial 

10 requirement with respect to a category of items 

11 and services is considered to be predominant if 

12 it is the most common or frequent of such type 

13 of limit or requirement with respect to such cat14 egory of items and services. 

15 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE16 MENTS.— 

17 ‘‘(A) NO BENEFICIARY FINANCIAL RE18 QUIREMENT.—If the plan or coverage does not 

19 include a beneficiary financial requirement (as 

20 defined in subparagraph (C)) on substantially 

21 all medical and surgical benefits within a cat22 egory of items and services (specified under 

23 paragraph (3)(C)), the plan or coverage may 

24 not impose such a beneficiary financial require25 ment on mental health and substance-related 


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1 disorder benefits for items and services within 

2 such category. 

3 ‘‘(B) BENEFICIARY FINANCIAL REQUIRE4 MENT.— 

5 ‘‘(i) TREATMENT OF DEDUCTIBLES, 

6 OUT-OF-POCKET LIMITS, AND SIMILAR FI7 NANCIAL REQUIREMENTS.—If the plan or 

8 coverage includes a deductible, a limitation 

9 on out-of-pocket expenses, or similar bene10 ficiary financial requirement that does not 

11 apply separately to individual items and 

12 services on substantially all medical and 

13 surgical benefits within a category of items 

14 and services (as specified in paragraph 

15 (3)(C)), the plan or coverage shall apply 

16 such requirement (or, if there is more than 

17 one such requirement for such category of 

18 items and services, the predominant re19 quirement for such category) both to med20 ical and surgical benefits within such cat21 egory and to mental health and substance22 related disorder benefits within such cat23 egory and shall not distinguish in the ap24 plication of such requirement between such 

25 medical and surgical benefits and such 


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1 mental health and substance-related dis2 order benefits. 

3 ‘‘(ii) OTHER FINANCIAL REQUIRE4 MENTS.—If the plan or coverage includes a 

5 beneficiary financial requirement not de6 scribed in clause (i) on substantially all 

7 medical and surgical benefits within a cat8 egory of items and services, the plan or 

9 coverage may not impose such financial re10 quirement on mental health and substance11 related disorder benefits for items and 

12 services within such category in a way that 

13 is more costly to the participant or bene14 ficiary than the predominant beneficiary fi15 nancial requirement applicable to medical 

16 and surgical benefits for items and services 

17 within such category. 

18 ‘‘(C) BENEFICIARY FINANCIAL REQUIRE19 MENT DEFINED.—For purposes of this para20 graph, the term ‘beneficiary financial require21 ment’ includes, with respect to a plan or cov22 erage, any deductible, coinsurance, co-payment, 

23 other cost sharing, and limitation on the total 

24 amount that may be paid by a participant or 

25 beneficiary with respect to benefits under the 


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1 plan or coverage, but does not include the appli2 cation of any aggregate lifetime limit or annual 

3 limit.’’; and 

4 (2) in subsection (b)— 

5 (A) by striking ‘‘construed—’’ and all that 

6 follows through ‘‘(1) as requiring’’ and insert7 ing ‘‘construed as requiring’’; 

8 (B) by striking ‘‘; or’’ and inserting a pe9 riod; and 

10 (C) by striking paragraph (2). 

11 (b) EXPANSION TO SUBSTANCE-RELATED DISORDER

12 BENEFITS AND REVISION OF DEFINITION.—Such section 

13 is further amended— 

14 (1) by striking ‘‘mental health benefits’’ and in15 serting ‘‘mental health and substance-related dis16 order benefits’’ each place it appears; and 

17 (2) in paragraph (4) of subsection (e)— 

18 (A) by striking ‘‘MENTAL HEALTH BENE19 FITS’’ and inserting ‘‘MENTAL HEALTH AND

20 SUBSTANCE-RELATED DISORDER BENEFITS’’; 

21 (B) by striking ‘‘benefits with respect to 

22 mental health services’’ and inserting ‘‘benefits 

23 with respect to services for mental health condi24 tions or substance-related disorders’’; and 


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1 (C) by striking ‘‘, but does not include 

2 benefits with respect to treatment of substances 

3 abuse or chemical dependency’’. 

4 (c) AVAILABILITY OF PLAN INFORMATION ABOUT

5 CRITERIA FOR MEDICAL NECESSITY.—Subsection (a) of 

6 such section, as amended by subsection (a)(1), is further 

7 amended by adding at the end the following new para8 graph: 

9 ‘‘(5) AVAILABILITY OF PLAN INFORMATION.— 

10 The criteria for medical necessity determinations 

11 made under the plan with respect to mental health 

12 and substance-related disorder benefits (or the 

13 health insurance coverage offered in connection with 

14 the plan with respect to such benefits) shall be made 

15 available by the plan administrator (or the health in16 surance issuer offering such coverage) to any cur17 rent or potential participant, beneficiary, or con18 tracting provider upon request. The reason for any 

19 denial under the plan (or coverage) of reimburse20 ment or payment for services with respect to mental 

21 health and substance-related disorder benefits in the 

22 case of any participant or beneficiary shall, upon re23 quest, be made available by the plan administrator 

24 (or the health insurance issuer offering such cov25 erage) to the participant or beneficiary.’’. 


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1 (d) MINIMUM BENEFIT REQUIREMENTS.—Sub2 section (a) of such section is further amended by adding 

3 at the end the following new paragraph: 

4 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQ5 UITY IN OUT-OF-NETWORK BENEFITS.— 

6 ‘‘(A) MINIMUM SCOPE OF MENTAL

7 HEALTH AND SUBSTANCE-RELATED DISORDER

8 BENEFITS.—In the case of a group health plan 

9 (or health insurance coverage offered in connec10 tion with such a plan) that provides any mental 

11 health and substance-related disorder benefits, 

12 the plan or coverage shall include benefits for 

13 any mental health condition or substance-re14 lated disorder for which benefits are provided 

15 under the benefit plan option offered under 

16 chapter 89 of title 5, United States Code, with 

17 the highest average enrollment as of the begin18 ning of the most recent year beginning on or 

19 before the beginning of the plan year involved. 

20 ‘‘(B) EQUITY IN COVERAGE OF OUT-OF21 NETWORK BENEFITS.— 

22 ‘‘(i) IN GENERAL.—In the case of a 

23 plan or coverage that provides both med24 ical and surgical benefits and mental 

25 health and substance-related disorder beneVerDate Aug 31 2005 17:59 Mar 10, 2007 Jkt 059196 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1424.IH H1424

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1 fits, if medical and surgical benefits are 

2 provided for substantially all items and 

3 services in a category specified in clause 

4 (ii) furnished outside any network of pro5 viders established or recognized under such 

6 plan or coverage, the mental health and 

7 substance-related disorder benefits shall 

8 also be provided for items and services in 

9 such category furnished outside any net10 work of providers established or recognized 

11 under such plan or coverage in accordance 

12 with the requirements of this section. 

13 ‘‘(ii) CATEGORIES OF ITEMS AND

14 SERVICES.—For purposes of clause (i), 

15 there shall be the following three categories 

16 of items and services for benefits, whether 

17 medical and surgical benefits or mental 

18 health and substance-related disorder bene19 fits, and all medical and surgical benefits 

20 and all mental health and substance-re21 lated disorder benefits shall be classified 

22 into one of the following categories: 

23 ‘‘(I) EMERGENCY.—Items and 

24 services, whether furnished on an in25 patient or outpatient basis, required 


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1 for the treatment of an emergency 

2 medical condition (including an emer3 gency condition relating to mental 

4 health and substance-related dis5 orders). 

6 ‘‘(II) INPATIENT.—Items and 

7 services not described in subclause (I) 

8 furnished on an inpatient basis. 

9 ‘‘(III) OUTPATIENT.—Items and 

10 services not described in subclause (I) 

11 furnished on an outpatient basis.’’. 

12 (e) REVISION OF INCREASED COST EXEMPTION.— 

13 Paragraph (2) of subsection (c) of such section is amended 

14 to read as follows: 

15 ‘‘(2) INCREASED COST EXEMPTION.— 

16 ‘‘(A) IN GENERAL.—With respect to a 

17 group health plan (or health insurance coverage 

18 offered in connection with such a plan), if the 

19 application of this section to such plan (or cov20 erage) results in an increase for the plan year 

21 involved of the actual total costs of coverage 

22 with respect to medical and surgical benefits 

23 and mental health and substance-related dis24 order benefits under the plan (as determined 

25 and certified under subparagraph (C)) by an 


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1 amount that exceeds the applicable percentage 

2 described in subparagraph (B) of the actual 

3 total plan costs, the provisions of this section 

4 shall not apply to such plan (or coverage) dur5 ing the following plan year, and such exemption 

6 shall apply to the plan (or coverage) for 1 plan 

7 year. 

8 ‘‘(B) APPLICABLE PERCENTAGE.—With re9 spect to a plan (or coverage), the applicable 

10 percentage described in this paragraph shall 

11 be— 

12 ‘‘(i) 2 percent in the case of the first 

13 plan year which begins after the date of 

14 the enactment of the Paul Wellstone Men15 tal Health and Addiction Equity Act of 

16 2007; and 

17 ‘‘(ii) 1 percent in the case of each 

18 subsequent plan year. 

19 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

20 Determinations as to increases in actual costs 

21 under a plan (or coverage) for purposes of this 

22 subsection shall be made by a qualified actuary 

23 who is a member in good standing of the Amer24 ican Academy of Actuaries. Such determinaVerDate Aug 31 2005 17:59 Mar 10, 2007 Jkt 059196 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H1424.IH H1424

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1 tions shall be certified by the actuary and be 

2 made available to the general public. 

3 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

4 group health plan (or a health insurance issuer 

5 offering coverage in connection with such a 

6 plan) seeks an exemption under this paragraph, 

7 determinations under subparagraph (A) shall be 

8 made after such plan (or coverage) has com9 plied with this section for the first 6 months of 

10 the plan year involved. 

11 ‘‘(E) NOTIFICATION.—An election to mod12 ify coverage of mental health and substance-re13 lated disorder benefits as permitted under this 

14 paragraph shall be treated as a material modi15 fication in the terms of the plan as described in 

16 section 102(a)(1) and shall be subject to the 

17 applicable notice requirements under section 

18 104(b)(1).’’. 

19 (f) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY20 ERS.—Subsection (c)(1)(B) of such section is amended— 

21 (1) by inserting ‘‘(or 1 in the case of an em22 ployer residing in a State that permits small groups 

23 to include a single individual)’’ after ‘‘at least 2’’ the 

24 first place it appears; and 


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1 (2) by striking ‘‘and who employs at least 2 em2 ployees on the first day of the plan year’’. 

3 (g) ELIMINATION OF SUNSET PROVISION.—Such sec4 tion is amended by striking out subsection (f). 

5 (h) CLARIFICATION REGARDING PREEMPTION.— 

6 Such section is further amended by inserting after sub7 section (e) the following new subsection: 

8 ‘‘(f) PREEMPTION, RELATION TO STATE LAWS.— 

9 ‘‘(1) IN GENERAL.—Nothing in this section 

10 shall be construed to preempt any State law that 

11 provides greater consumer protections, benefits, 

12 methods of access to benefits, rights or remedies 

13 that are greater than the protections, benefits, meth14 ods of access to benefits, rights or remedies provided 

15 under this section. 

16 ‘‘(2) ERISA.—Nothing in this section shall be 

17 construed to affect or modify the provisions of sec18 tion 514 with respect to group health plans.’’. 

19 (i) CONFORMING AMENDMENTS TO HEADING.— 

20 (1) IN GENERAL.—The heading of such section 

21 is amended to read as follows: 

22 ‘‘SEC. 712. Equity in mental health and substance-related dis23 order benefits.’’. 

24 (2) CLERICAL AMENDMENT.—The table of con25 tents in section 1 of such Act is amended by striking 


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1 the item relating to section 712 and inserting the 

2 following new item: 

‘‘Sec. 712. Equity in mental health and substance-related disorder benefits.’’. 

3 (j) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply with respect to plan years begin5 ning on or after January 1, 2008. 

6 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE 

7 ACT RELATING TO THE GROUP MARKET. 

8 (a) EXTENSION OF PARITY TO TREATMENT LIMITS

9 AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 

10 2705 of the Public Health Service Act (42 U.S.C. 300gg– 

11 5) is amended— 

12 (1) in subsection (a), by adding at the end the 

13 following new paragraphs: 

14 ‘‘(3) TREATMENT LIMITS.— 

15 ‘‘(A) NO TREATMENT LIMIT.—If the plan 

16 or coverage does not include a treatment limit 

17 (as defined in subparagraph (D)) on substan18 tially all medical and surgical benefits in any 

19 category of items or services (specified in sub20 paragraph (C)), the plan or coverage may not 

21 impose any treatment limit on mental health 

22 and substance-related disorder benefits that are 

23 classified in the same category of items or serv24 ices. 


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1 ‘‘(B) TREATMENT LIMIT.—If the plan or 

2 coverage includes a treatment limit on substan3 tially all medical and surgical benefits in any 

4 category of items or services, the plan or cov5 erage may not impose such a treatment limit on 

6 mental health and substance-related disorder 

7 benefits for items and services within such cat8 egory that are more restrictive than the pre9 dominant treatment limit that is applicable to 

10 medical and surgical benefits for items and 

11 services within such category. 

12 ‘‘(C) CATEGORIES OF ITEMS AND SERV13 ICES FOR APPLICATION OF TREATMENT LIMITS

14 AND BENEFICIARY FINANCIAL REQUIRE15 MENTS.—For purposes of this paragraph and 

16 paragraph (4), there shall be the following four 

17 categories of items and services for benefits, 

18 whether medical and surgical benefits or mental 

19 health and substance-related disorder benefits, 

20 and all medical and surgical benefits and all 

21 mental health and substance related benefits 

22 shall be classified into one of the following cat23 egories: 

24 ‘‘(i) INPATIENT, IN-NETWORK.—Items 

25 and services furnished on an inpatient 


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1 basis and within a network of providers es2 tablished or recognized under such plan or 

3 coverage. 

4 ‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 

5 Items and services furnished on an inpa6 tient basis and outside any network of pro7 viders established or recognized under such 

8 plan or coverage. 

9 ‘‘(iii) OUTPATIENT, IN-NETWORK.— 

10 Items and services furnished on an out11 patient basis and within a network of pro12 viders established or recognized under such 

13 plan or coverage. 

14 ‘‘(iv) OUTPATIENT, OUT-OF-NET15 WORK.—Items and services furnished on 

16 an outpatient basis and outside any net17 work of providers established or recognized 

18 under such plan or coverage. 

19 ‘‘(D) TREATMENT LIMIT DEFINED.—For 

20 purposes of this paragraph, the term ‘treatment 

21 limit’ means, with respect to a plan or coverage, 

22 limitation on the frequency of treatment, num23 ber of visits or days of coverage, or other simi24 lar limit on the duration or scope of treatment 

25 under the plan or coverage. 


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1 ‘‘(E) PREDOMINANCE.—For purposes of 

2 this subsection, a treatment limit or financial 

3 requirement with respect to a category of items 

4 and services is considered to be predominant if 

5 it is the most common or frequent of such type 

6 of limit or requirement with respect to such cat7 egory of items and services. 

8 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE9 MENTS.— 

10 ‘‘(A) NO BENEFICIARY FINANCIAL RE11 QUIREMENT.—If the plan or coverage does not 

12 include a beneficiary financial requirement (as 

13 defined in subparagraph (C)) on substantially 

14 all medical and surgical benefits within a cat15 egory of items and services (specified in para16 graph (3)(C)), the plan or coverage may not im17 pose such a beneficiary financial requirement on 

18 mental health and substance-related disorder 

19 benefits for items and services within such cat20 egory. 

21 ‘‘(B) BENEFICIARY FINANCIAL REQUIRE22 MENT.— 

23 ‘‘(i) TREATMENT OF DEDUCTIBLES, 

24 OUT-OF-POCKET LIMITS, AND SIMILAR FI25 NANCIAL REQUIREMENTS.—If the plan or 


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1 coverage includes a deductible, a limitation 

2 on out-of-pocket expenses, or similar bene3 ficiary financial requirement that does not 

4 apply separately to individual items and 

5 services on substantially all medical and 

6 surgical benefits within a category of items 

7 and services, the plan or coverage shall 

8 apply such requirement (or, if there is 

9 more than one such requirement for such 

10 category of items and services, the pre11 dominant requirement for such category) 

12 both to medical and surgical benefits with13 in such category and to mental health and 

14 substance-related disorder benefits within 

15 such category and shall not distinguish in 

16 the application of such requirement be17 tween such medical and surgical benefits 

18 and such mental health and substance-re19 lated disorder benefits. 

20 ‘‘(ii) OTHER FINANCIAL REQUIRE21 MENTS.—If the plan or coverage includes a 

22 beneficiary financial requirement not de23 scribed in clause (i) on substantially all 

24 medical and surgical benefits within a cat25 egory of items and services, the plan or 


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1 coverage may not impose such financial re2 quirement on mental health and substance3 related disorder benefits for items and 

4 services within such category in a way that 

5 is more costly to the participant or bene6 ficiary than the predominant beneficiary fi7 nancial requirement applicable to medical 

8 and surgical benefits for items and services 

9 within such category. 

10 ‘‘(C) BENEFICIARY FINANCIAL REQUIRE11 MENT DEFINED.—For purposes of this para12 graph, the term ‘beneficiary financial require13 ment’ includes, with respect to a plan or cov14 erage, any deductible, coinsurance, co-payment, 

15 other cost sharing, and limitation on the total 

16 amount that may be paid by a participant or 

17 beneficiary with respect to benefits under the 

18 plan or coverage, but does not include the appli19 cation of any aggregate lifetime limit or annual 

20 limit.’’; and 

21 (2) in subsection (b)— 

22 (A) by striking ‘‘construed—’’ and all that 

23 follows through ‘‘(1) as requiring’’ and insert24 ing ‘‘construed as requiring’’; 


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1 (B) by striking ‘‘; or’’ and inserting a pe2 riod; and 

3 (C) by striking paragraph (2). 

4 (b) EXPANSION TO SUBSTANCE-RELATED DISORDER

5 BENEFITS AND REVISION OF DEFINITION.—Such section 

6 is further amended— 

7 (1) by striking ‘‘mental health benefits’’ and in8 serting ‘‘mental health and substance-related dis9 order benefits’’ each place it appears; and 

10 (2) in paragraph (4) of subsection (e)— 

11 (A) by striking ‘‘MENTAL HEALTH BENE12 FITS’’ and inserting ‘‘MENTAL HEALTH AND

13 SUBSTANCE-RELATED DISORDER BENEFITS’’; 

14 (B) by striking ‘‘benefits with respect to 

15 mental health services’’ and inserting ‘‘benefits 

16 with respect to services for mental health condi17 tions or substance-related disorders’’; and 

18 (C) by striking ‘‘, but does not include 

19 benefits with respect to treatment of substances 

20 abuse or chemical dependency’’. 

21 (c) AVAILABILITY OF PLAN INFORMATION ABOUT

22 CRITERIA FOR MEDICAL NECESSITY.—Subsection (a) of 

23 such section, as amended by subsection (a)(1), is further 

24 amended by adding at the end the following new para25 graph: 


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1 ‘‘(5) AVAILABILITY OF PLAN INFORMATION.— 

2 The criteria for medical necessity determinations 

3 made under the plan with respect to mental health 

4 and substance-related disorder benefits (or the 

5 health insurance coverage offered in connection with 

6 the plan with respect to such benefits) shall be made 

7 available by the plan administrator (or the health in8 surance issuer offering such coverage) to any cur9 rent or potential participant, beneficiary, or con10 tracting provider upon request. The reason for any 

11 denial under the plan (or coverage) of reimburse12 ment or payment for services with respect to mental 

13 health and substance-related disorder benefits in the 

14 case of any participant or beneficiary shall, upon re15 quest, be made available by the plan administrator 

16 (or the health insurance issuer offering such cov17 erage) to the participant or beneficiary.’’. 

18 (d) MINIMUM BENEFIT REQUIREMENTS.—Sub19 section (a) of such section is further amended by adding 

20 at the end the following new paragraph: 

21 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQ22 UITY IN OUT-OF-NETWORK BENEFITS.— 

23 ‘‘(A) MINIMUM SCOPE OF MENTAL

24 HEALTH AND SUBSTANCE-RELATED DISORDER

25 BENEFITS.—In the case of a group health plan 


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1 (or health insurance coverage offered in connec2 tion with such a plan) that provides any mental 

3 health and substance-related disorder benefits, 

4 the plan or coverage shall include benefits for 

5 any mental health condition or substance-re6 lated disorder for which benefits are provided 

7 under the benefit plan option offered under 

8 chapter 89 of title 5, United States Code, with 

9 the highest average enrollment as of the begin10 ning of the most recent year beginning on or 

11 before the beginning of the plan year involved. 

12 ‘‘(B) EQUITY IN COVERAGE OF OUT-OF13 NETWORK BENEFITS.— 

14 ‘‘(i) IN GENERAL.—In the case of a 

15 plan or coverage that provides both med16 ical and surgical benefits and mental 

17 health and substance-related disorder bene18 fits, if medical and surgical benefits are 

19 provided for substantially all items and 

20 services in a category specified in clause 

21 (ii) furnished outside any network of pro22 viders established or recognized under such 

23 plan or coverage, the mental health and 

24 substance-related disorder benefits shall 

25 also be provided for items and services in 


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1 such category furnished outside any net2 work of providers established or recognized 

3 under such plan or coverage in accordance 

4 with the requirements of this section. 

5 ‘‘(ii) CATEGORIES OF ITEMS AND

6 SERVICES.—For purposes of clause (i), 

7 there shall be the following three categories 

8 of items and services for benefits, whether 

9 medical and surgical benefits or mental 

10 health and substance-related disorder bene11 fits, and all medical and surgical benefits 

12 and all mental health and substance-re13 lated disorder benefits shall be classified 

14 into one of the following categories: 

15 ‘‘(I) EMERGENCY.—Items and 

16 services, whether furnished on an in17 patient or outpatient basis, required 

18 for the treatment of an emergency 

19 medical condition (including an emer20 gency condition relating to mental 

21 health and substance-related dis22 orders). 

23 ‘‘(II) INPATIENT.—Items and 

24 services not described in subclause (I) 

25 furnished on an inpatient basis. 


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1 ‘‘(III) OUTPATIENT.—Items and 

2 services not described in subclause (I) 

3 furnished on an outpatient basis.’’. 

4 (e) REVISION OF INCREASED COST EXEMPTION.— 

5 Paragraph (2) of subsection (c) of such section is amended 

6 to read as follows: 

7 ‘‘(2) INCREASED COST EXEMPTION.— 

8 ‘‘(A) IN GENERAL.—With respect to a 

9 group health plan (or health insurance coverage 

10 offered in connection with such a plan), if the 

11 application of this section to such plan (or cov12 erage) results in an increase for the plan year 

13 involved of the actual total costs of coverage 

14 with respect to medical and surgical benefits 

15 and mental health and substance-related dis16 order benefits under the plan (as determined 

17 and certified under subparagraph (C)) by an 

18 amount that exceeds the applicable percentage 

19 described in subparagraph (B) of the actual 

20 total plan costs, the provisions of this section 

21 shall not apply to such plan (or coverage) dur22 ing the following plan year, and such exemption 

23 shall apply to the plan (or coverage) for 1 plan 

24 year. 


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1 ‘‘(B) APPLICABLE PERCENTAGE.—With re2 spect to a plan (or coverage), the applicable 

3 percentage described in this paragraph shall 

4 be— 

5 ‘‘(i) 2 percent in the case of the first 

6 plan year which begins after the date of 

7 the enactment of the Paul Wellstone Men8 tal Health and Addiction Equity Act of 

9 2007; and 

10 ‘‘(ii) 1 percent in the case of each 

11 subsequent plan year. 

12 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

13 Determinations as to increases in actual costs 

14 under a plan (or coverage) for purposes of this 

15 subsection shall be made by a qualified actuary 

16 who is a member in good standing of the Amer17 ican Academy of Actuaries. Such determina18 tions shall be certified by the actuary and be 

19 made available to the general public. 

20 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

21 group health plan (or a health insurance issuer 

22 offering coverage in connection with such a 

23 plan) seeks an exemption under this paragraph, 

24 determinations under subparagraph (A) shall be 

25 made after such plan (or coverage) has comVerDate Aug 31 2005 17:59 Mar 10, 2007 Jkt 059196 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\H1424.IH H1424

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1 plied with this section for the first 6 months of 

2 the plan year involved. 

3 ‘‘(E) NOTIFICATION.—A group health plan 

4 under this part shall comply with the notice re5 quirement under section 712(c)(2)(E) of the 

6 Employee Retirement Income Security Act of 

7 1974 with respect to the a modification of men8 tal health and substance-related disorder bene9 fits as permitted under this paragraph as if 

10 such section applied to such plan.’’. 

11 (f) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY12 ERS.—Subsection (c)(1)(B) of such section is amended— 

13 (1) by inserting ‘‘(or 1 in the case of an em14 ployer residing in a State that permits small groups 

15 to include a single individual)’’ after ‘‘at least 2’’ the 

16 first place it appears; and 

17 (2) by striking ‘‘and who employs at least 2 em18 ployees on the first day of the plan year’’. 

19 (g) ELIMINATION OF SUNSET PROVISION.—Such sec20 tion is amended by striking out subsection (f). 

21 (h) CLARIFICATION REGARDING PREEMPTION.— 

22 Such section is further amended by inserting after sub23 section (e) the following new subsection: 

24 ‘‘(f) PREEMPTION, RELATION TO STATE LAWS.— 


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1 ‘‘(1) IN GENERAL.—Nothing in this section 

2 shall be construed to preempt any State law that 

3 provides greater consumer protections, benefits, 

4 methods of access to benefits, rights or remedies 

5 that are greater than the protections, benefits, meth6 ods of access to benefits, rights or remedies provided 

7 under this section. 

8 ‘‘(2) CONSTRUCTION.—Nothing in this section 

9 shall be construed to affect or modify the provisions 

10 of section 2723 with respect to group health plans.’’. 

11 (i) CONFORMING AMENDMENT TO HEADING.—The 

12 heading of such section is amended to read as follows: 

13 ‘‘SEC. 2705. Equity in mental health and substance-related dis14 order benefits.’’. 

15 (j) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply with respect to plan years begin17 ning on or after January 1, 2008. 

18 SEC. 4. AMENDMENTS TO THE INTERNAL REVENUE CODE 

19 OF 1986. 

20 (a) EXTENSION OF PARITY TO TREATMENT LIMITS

21 AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 

22 9812 of the Internal Revenue Code of 1986 is amended— 

23 (1) in subsection (a), by adding at the end the 

24 following new paragraphs: 

25 ‘‘(3) TREATMENT LIMITS.— 


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1 ‘‘(A) NO TREATMENT LIMIT.—If the plan 

2 does not include a treatment limit (as defined 

3 in subparagraph (D)) on substantially all med4 ical and surgical benefits in any category of 

5 items or services (specified in subparagraph 

6 (C)), the plan may not impose any treatment 

7 limit on mental health and substance-related 

8 disorder benefits that are classified in the same 

9 category of items or services. 

10 ‘‘(B) TREATMENT LIMIT.—If the plan in11 cludes a treatment limit on substantially all 

12 medical and surgical benefits in any category of 

13 items or services, the plan may not impose such 

14 a treatment limit on mental health and sub15 stance-related disorder benefits for items and 

16 services within such category that are more re17 strictive than the predominant treatment limit 

18 that is applicable to medical and surgical bene19 fits for items and services within such category. 

20 ‘‘(C) CATEGORIES OF ITEMS AND SERV21 ICES FOR APPLICATION OF TREATMENT LIMITS

22 AND BENEFICIARY FINANCIAL REQUIRE23 MENTS.—For purposes of this paragraph and 

24 paragraph (4), there shall be the following four 

25 categories of items and services for benefits, 


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1 whether medical and surgical benefits or mental 

2 health and substance-related disorder benefits, 

3 and all medical and surgical benefits and all 

4 mental health and substance related benefits 

5 shall be classified into one of the following cat6 egories: 

7 ‘‘(i) INPATIENT, IN-NETWORK.—Items 

8 and services furnished on an inpatient 

9 basis and within a network of providers es10 tablished or recognized under such plan or 

11 coverage. 

12 ‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 

13 Items and services furnished on an inpa14 tient basis and outside any network of pro15 viders established or recognized under such 

16 plan or coverage. 

17 ‘‘(iii) OUTPATIENT, IN-NETWORK.— 

18 Items and services furnished on an out19 patient basis and within a network of pro20 viders established or recognized under such 

21 plan or coverage. 

22 ‘‘(iv) OUTPATIENT, OUT-OF-NET23 WORK.—Items and services furnished on 

24 an outpatient basis and outside any netVerDate Aug 31 2005 17:59 Mar 10, 2007 Jkt 059196 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\H1424.IH H1424

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1 work of providers established or recognized 

2 under such plan or coverage. 

3 ‘‘(D) TREATMENT LIMIT DEFINED.—For 

4 purposes of this paragraph, the term ‘treatment 

5 limit’ means, with respect to a plan, limitation 

6 on the frequency of treatment, number of visits 

7 or days of coverage, or other similar limit on 

8 the duration or scope of treatment under the 

9 plan. 

10 ‘‘(E) PREDOMINANCE.—For purposes of 

11 this subsection, a treatment limit or financial 

12 requirement with respect to a category of items 

13 and services is considered to be predominant if 

14 it is the most common or frequent of such type 

15 of limit or requirement with respect to such cat16 egory of items and services. 

17 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE18 MENTS.— 

19 ‘‘(A) NO BENEFICIARY FINANCIAL RE20 QUIREMENT.—If the plan does not include a 

21 beneficiary financial requirement (as defined in 

22 subparagraph (C)) on substantially all medical 

23 and surgical benefits within a category of items 

24 and services (specified in paragraph (3)(C)), 

25 the plan may not impose such a beneficiary fiVerDate Aug 31 2005 17:59 Mar 10, 2007 Jkt 059196 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\H1424.IH H1424

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1 nancial requirement on mental health and sub2 stance-related disorder benefits for items and 

3 services within such category. 

4 ‘‘(B) BENEFICIARY FINANCIAL REQUIRE5 MENT.— 

6 ‘‘(i) TREATMENT OF DEDUCTIBLES, 

7 OUT-OF-POCKET LIMITS, AND SIMILAR FI8 NANCIAL REQUIREMENTS.—If the plan or 

9 coverage includes a deductible, a limitation 

10 on out-of-pocket expenses, or similar bene11 ficiary financial requirement that does not 

12 apply separately to individual items and 

13 services on substantially all medical and 

14 surgical benefits within a category of items 

15 and services, the plan or coverage shall 

16 apply such requirement (or, if there is 

17 more than one such requirement for such 

18 category of items and services, the pre19 dominant requirement for such category) 

20 both to medical and surgical benefits with21 in such category and to mental health and 

22 substance-related disorder benefits within 

23 such category and shall not distinguish in 

24 the application of such requirement be25 tween such medical and surgical benefits 


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1 and such mental health and substance-re2 lated disorder benefits. 

3 ‘‘(ii) OTHER FINANCIAL REQUIRE4 MENTS.—If the plan includes a beneficiary 

5 financial requirement not described in 

6 clause (i) on substantially all medical and 

7 surgical benefits within a category of items 

8 and services, the plan may not impose such 

9 financial requirement on mental health and 

10 substance-related disorder benefits for 

11 items and services within such category in 

12 a way that is more costly to the participant 

13 or beneficiary than the predominant bene14 ficiary financial requirement applicable to 

15 medical and surgical benefits for items and 

16 services within such category. 

17 ‘‘(C) BENEFICIARY FINANCIAL REQUIRE18 MENT DEFINED.—For purposes of this para19 graph, the term ‘beneficiary financial require20 ment’ includes, with respect to a plan, any de21 ductible, coinsurance, co-payment, other cost 

22 sharing, and limitation on the total amount 

23 that may be paid by a participant or beneficiary 

24 with respect to benefits under the plan, but 


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1 does not include the application of any aggre2 gate lifetime limit or annual limit.’’; and 

3 (2) in subsection (b)— 

4 (A) by striking ‘‘construed—’’ and all that 

5 follows through ‘‘(1) as requiring’’ and insert6 ing ‘‘construed as requiring’’; 

7 (B) by striking ‘‘; or’’ and inserting a pe8 riod; and 

9 (C) by striking paragraph (2). 

10 (b) EXPANSION TO SUBSTANCE-RELATED DISORDER

11 BENEFITS AND REVISION OF DEFINITION.—Such section 

12 is further amended— 

13 (1) by striking ‘‘mental health benefits’’ and in14 serting ‘‘mental health and substance-related dis15 order benefits’’ each place it appears; and 

16 (2) in paragraph (4) of subsection (e)— 

17 (A) by striking ‘‘MENTAL HEALTH BENE18 FITS’’ in the heading and inserting ‘‘MENTAL

19 HEALTH AND SUBSTANCE-RELATED DISORDER

20 BENEFITS’’; 

21 (B) by striking ‘‘benefits with respect to 

22 mental health services’’ and inserting ‘‘benefits 

23 with respect to services for mental health condi24 tions or substance-related disorders’’; and 


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1 (C) by striking ‘‘, but does not include 

2 benefits with respect to treatment of substances 

3 abuse or chemical dependency’’. 

4 (c) AVAILABILITY OF PLAN INFORMATION ABOUT

5 CRITERIA FOR MEDICAL NECESSITY.—Subsection (a) of 

6 such section, as amended by subsection (a)(1), is further 

7 amended by adding at the end the following new para8 graph: 

9 ‘‘(5) AVAILABILITY OF PLAN INFORMATION.— 

10 The criteria for medical necessity determinations 

11 made under the plan with respect to mental health 

12 and substance-related disorder benefits shall be 

13 made available by the plan administrator to any cur14 rent or potential participant, beneficiary, or con15 tracting provider upon request. The reason for any 

16 denial under the plan of reimbursement or payment 

17 for services with respect to mental health and sub18 stance-related disorder benefits in the case of any 

19 participant or beneficiary shall, upon request, be 

20 made available by the plan administrator to the par21 ticipant or beneficiary.’’. 

22 (d) MINIMUM BENEFIT REQUIREMENTS.—Sub23 section (a) of such section is further amended by adding 

24 at the end the following new paragraph: 


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1 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQ2 UITY IN OUT-OF-NETWORK BENEFITS.— 

3 ‘‘(A) MINIMUM SCOPE OF MENTAL

4 HEALTH AND SUBSTANCE-RELATED DISORDER

5 BENEFITS.—In the case of a group health plan 

6 (or health insurance coverage offered in connec7 tion with such a plan) that provides any mental 

8 health and substance-related disorder benefits, 

9 the plan or coverage shall include benefits for 

10 any mental health condition or substance-re11 lated disorder for which benefits are provided 

12 under the benefit plan option offered under 

13 chapter 89 of title 5, United States Code, with 

14 the highest average enrollment as of the begin15 ning of the most recent year beginning on or 

16 before the beginning of the plan year involved. 

17 ‘‘(B) EQUITY IN COVERAGE OF OUT-OF18 NETWORK BENEFITS.— 

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

20 plan that provides both medical and sur21 gical benefits and mental health and sub22 stance-related disorder benefits, if medical 

23 and surgical benefits are provided for sub24 stantially all items and services in a cat25 egory specified in clause (ii) furnished outVerDate Aug 31 2005 17:59 Mar 10, 2007 Jkt 059196 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H1424.IH H1424

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1 side any network of providers established 

2 or recognized under such plan or coverage, 

3 the mental health and substance-related 

4 disorder benefits shall also be provided for 

5 items and services in such category fur6 nished outside any network of providers es7 tablished or recognized under such plan in 

8 accordance with the requirements of this 

9 section. 

10 ‘‘(ii) CATEGORIES OF ITEMS AND

11 SERVICES.—For purposes of clause (i), 

12 there shall be the following three categories 

13 of items and services for benefits, whether 

14 medical and surgical benefits or mental 

15 health and substance-related disorder bene16 fits, and all medical and surgical benefits 

17 and all mental health and substance-re18 lated disorder benefits shall be classified 

19 into one of the following categories: 

20 ‘‘(I) EMERGENCY.—Items and 

21 services, whether furnished on an in22 patient or outpatient basis, required 

23 for the treatment of an emergency 

24 medical condition (including an emer25 gency condition relating to mental 


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1 health and substance-related dis2 orders). 

3 ‘‘(II) INPATIENT.—Items and 

4 services not described in subclause (I) 

5 furnished on an inpatient basis. 

6 ‘‘(III) OUTPATIENT.—Items and 

7 services not described in subclause (I) 

8 furnished on an outpatient basis.’’. 

9 (e) REVISION OF INCREASED COST EXEMPTION.— 

10 Paragraph (2) of subsection (c) of such section is amended 

11 to read as follows: 

12 ‘‘(2) INCREASED COST EXEMPTION.— 

13 ‘‘(A) IN GENERAL.—With respect to a 

14 group health plan, if the application of this sec15 tion to such plan results in an increase for the 

16 plan year involved of the actual total costs of 

17 coverage with respect to medical and surgical 

18 benefits and mental health and substance-re19 lated disorder benefits under the plan (as deter20 mined and certified under subparagraph (C)) by 

21 an amount that exceeds the applicable percent22 age described in subparagraph (B) of the actual 

23 total plan costs, the provisions of this section 

24 shall not apply to such plan during the folVerDate Aug 31 2005 17:59 Mar 10, 2007 Jkt 059196 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H1424.IH H1424

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1 lowing plan year, and such exemption shall 

2 apply to the plan for 1 plan year. 

3 ‘‘(B) APPLICABLE PERCENTAGE.—With re4 spect to a plan, the applicable percentage de5 scribed in this paragraph shall be— 

6 ‘‘(i) 2 percent in the case of the first 

7 plan year which begins after the date of 

8 the enactment of the Paul Wellstone Men9 tal Health and Addiction Equity Act of 

10 2007; and 

11 ‘‘(ii) 1 percent in the case of each 

12 subsequent plan year. 

13 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

14 Determinations as to increases in actual costs 

15 under a plan for purposes of this subsection 

16 shall be made by a qualified actuary who is a 

17 member in good standing of the American 

18 Academy of Actuaries. Such determinations 

19 shall be certified by the actuary and be made 

20 available to the general public. 

21 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

22 group health plan seeks an exemption under 

23 this paragraph, determinations under subpara24 graph (A) shall be made after such plan has 


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1 complied with this section for the first 6 

2 months of the plan year involved.’’. 

3 (f) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY4 ERS.—Subsection (c)(1) of such section is amended to 

5 read as follows: 

6 ‘‘(1) SMALL EMPLOYER EXEMPTION.— 

7 ‘‘(A) IN GENERAL.—This section shall not 

8 apply to any group health plan for any plan 

9 year of a small employer. 

10 ‘‘(B) SMALL EMPLOYER.—For purposes of 

11 subparagraph (A), the term ‘small employer’ 

12 means, with respect to a calendar year and a 

13 plan year, an employer who employed an aver14 age of at least 2 (or 1 in the case of an em15 ployer residing in a State that permits small 

16 groups to include a single individual) but not 

17 more than 50 employees on business days dur18 ing the preceding calendar year. For purposes 

19 of the preceding sentence, all persons treated as 

20 a single employer under subsection (b), (c), 

21 (m), or (o) of section 414 shall be treated as 1 

22 employer and rules similar to rules of subpara23 graphs (B) and (C) of section 4980D(d)(2) 

24 shall apply.’’. 


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1 (g) ELIMINATION OF SUNSET PROVISION.—Such sec2 tion is amended by striking subsection (f). 

3 (h) CONFORMING AMENDMENTS TO HEADING.— 

4 (1) IN GENERAL.—The heading of such section 

5 is amended to read as follows: 

6 ‘‘SEC. 9812. Equity in mental health and substance-related dis7 order benefits.’’. 

8 (2) CLERICAL AMENDMENT.—The table of sec9 tions for subchapter B of chapter 100 of the Inter10 nal Revenue Code of 1986 is amended by striking 

11 the item relating to section 9812 and inserting the 

12 following new item: 

‘‘Sec. 9812. Equity in mental health and substance-related disorder benefits.’’. 

13 (i) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply with respect to plan years begin15 ning on or after January 1, 2008. 

16 SEC. 5. GOVERNMENT ACCOUNTABILITY OFFICE STUDIES 

17 AND REPORTS. 

18 (a) IMPLEMENTATION OF ACT.— 

19 (1) STUDY.—The Comptroller General of the 

20 United States shall conduct a study that evaluates 

21 the effect of the implementation of the amendments 

22 made by this Act on— 

23 (A) the cost of health insurance coverage; 


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1 (B) access to health insurance coverage 

2 (including the availability of in-network pro3 viders); 

4 (C) the quality of health care; 

5 (D) Medicare, Medicaid, and State and 

6 local mental health and substance abuse treat7 ment spending; 

8 (E) the number of individuals with private 

9 insurance who received publicly funded health 

10 care for mental health and substance-related 

11 disorders; 

12 (F) spending on public services, such as 

13 the criminal justice system, special education, 

14 and income assistance programs; 

15 (G) the use of medical management of 

16 mental health and substance-related disorder 

17 benefits and medical necessity determinations 

18 by group health plans (and health insurance 

19 issuers offering health insurance coverage in 

20 connection with such plans) and timely access 

21 by participants and beneficiaries to clinically-in22 dicated care for mental health and substance23 use disorders; and 

24 (H) other matters as determined appro25 priate by the Comptroller General. 


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1 (2) REPORT.—Not later than 2 years after the 

2 date of enactment of this Act, the Comptroller Gen3 eral shall prepare and submit to the appropriate 

4 committees of the Congress a report containing the 

5 results of the study conducted under paragraph (1). 

6 (b) BIANNUAL REPORT ON OBSTACLES IN OBTAIN7 ING COVERAGE.—Every two years, the Comptroller Gen8 eral shall submit to each House of the Congress a report 

9 on obstacles that individuals face in obtaining mental 

10 health and substance-related disorder care under their 

11 health plans. 

12 (c) UNIFORM PATIENT PLACEMENT CRITERIA.—Not 

13 later than 18 months after the date of the enactment of 

14 this Act, the Comptroller General shall submit to each 

15 House of the Congress a report on availability of uniform 

16 patient placement criteria for mental health and sub17 stance-related disorders that could be used by group 

18 health plans and health insurance issuers to guide deter19 minations of medical necessity and the extent to which 

20 health plans utilize such critiera. If such criteria do not 

21 exist, the report shall include recommendations on a proc22 ess for developing such criteria. 

Æ 


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