IB 

Union Calendar No. 328 

110TH CONGRESS 

2D SESSION H. R. 1424 

[Report No. 110–374, Parts I, II, and III] 

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. 


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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 

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 

OCTOBER 15, 2007 

Reported from the Committee on Education and Labor with an amendment 


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[Strike out all after the enacting clause and insert the part printed in italic] 

OCTOBER 15, 2007 

Reported from the Committee on Ways and Means with an amendment 

[Stike out all after the enacting clause and insert the part printed in boldface roman] 

MARCH 4, 2008 

Additional sponsors: Mrs. BONO MACK, Mr. DINGELL, Mr. ALTMIRE, Mr. 

GERLACH, Mr. EHLERS, Mr. GILLMOR, Mr. DENT, Mr. PATRICK MURPHY of Pennsylvania, Mrs. BOYDA of Kansas, Mr. MITCHELL, Mrs. 

CAPITO, Mr. MILLER of North Carolina, Mr. CRAMER, Mr. BONNER, Mr. 

WOLF, Mr. HILL, Mr. MELANCON, Mr. SHULER, and Mr. SMITH of 

Texas 

MARCH 4, 2008 

Reported from the Committee on Energy and Commerce with an amendment; 

committed to the Committee of the Whole House on the State of the 

Union and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in boldface italic] 

[For text of introduced bill, see copy of bill as introduced on March 9, 2007] 

A BILL 

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. 

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’’. 


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

2 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. 4. Amendments to the Internal Revenue Code of 1986. 

Sec. 5. Government Accountability Office studies and reports. 

3 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN4 COME SECURITY ACT OF 1974. 

5 (a) EXTENSION OF PARITY TO TREATMENT LIMITS

6 AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 

7 712 of the Employee Retirement Income Security Act of 

8 1974 (29 U.S.C. 1185a) is amended— 

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

10 following new paragraphs: 

11 ‘‘(3) TREATMENT LIMITS.— 

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

13 coverage does not include a treatment limit (as 

14 defined in subparagraph (D)) on substantially 

15 all medical and surgical benefits in any category 

16 of items or services, the plan or coverage may 

17 not impose any treatment limit on mental health 

18 or substance-related disorder benefits that are 

19 classified in the same category of items or serv20 ices. 

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

22 coverage includes a treatment limit on substanVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H1424.RH H1424

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1 tially all medical and surgical benefits in any 

2 category of items or services, the plan or coverage 

3 may not impose such a treatment limit on men4 tal health or substance-related disorder benefits 

5 for items and services within such category that 

6 is more restrictive than the predominant treat7 ment limit that is applicable to medical and sur8 gical benefits for items and services within such 

9 category. 

10 ‘‘(C) CATEGORIES OF ITEMS AND SERVICES

11 FOR APPLICATION OF TREATMENT LIMITS AND

12 BENEFICIARY FINANCIAL REQUIREMENTS.—For 

13 purposes of this paragraph and paragraph (4), 

14 there shall be the following five categories of 

15 items and services for benefits, whether medical 

16 and surgical benefits or mental health and sub17 stance-related disorder benefits, and all medical 

18 and surgical benefits and all mental health and 

19 substance related benefits shall be classified into 

20 one of the following categories: 

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

22 and services not described in clause (v) fur23 nished on an inpatient basis and within a 

24 network of providers established or recog25 nized under such plan or coverage. 


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1 ‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 

2 Items and services not described in clause 

3 (v) furnished on an inpatient basis and out4 side any network of providers established or 

5 recognized under such plan or coverage. 

6 ‘‘(iii) OUTPATIENT, IN-NETWORK.— 

7 Items and services not described in clause 

8 (v) furnished on an outpatient basis and 

9 within a network of providers established or 

10 recognized under such plan or coverage. 

11 ‘‘(iv) OUTPATIENT, OUT-OF-NET12 WORK.—Items and services not described in 

13 clause (v) furnished on an outpatient basis 

14 and outside any network of providers estab15 lished or recognized under such plan or cov16 erage. 

17 ‘‘(v) EMERGENCY CARE.—Items and 

18 services, whether furnished on an inpatient 

19 or outpatient basis or within or outside any 

20 network of providers, required for the treat21 ment of an emergency medical condition 

22 (including an emergency condition relating 

23 to mental health and substance-related dis24 orders). 


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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, number 

5 of visits or days of coverage, or other similar 

6 limit on the duration or scope of treatment 

7 under the plan or coverage. 

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

9 subsection, a treatment limit or financial re10 quirement 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 REQUIREMENTS.— 

16 ‘‘(A) NO BENEFICIARY FINANCIAL REQUIRE17 MENT.—If the plan or coverage does not include 

18 a beneficiary financial requirement (as defined 

19 in subparagraph (C)) on substantially all med20 ical and surgical benefits within a category of 

21 items and services (specified under paragraph 

22 (3)(C)), the plan or coverage may not impose 

23 such a beneficiary financial requirement on 

24 mental health or substance-related disorder bene25 fits for items and services within such category. 


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1 ‘‘(B) BENEFICIARY FINANCIAL REQUIRE2 MENT.— 

3 ‘‘(i) TREATMENT OF DEDUCTIBLES, 

4 OUT-OF-POCKET LIMITS, AND SIMILAR FI5 NANCIAL REQUIREMENTS.—If the plan or 

6 coverage includes a deductible, a limitation 

7 on out-of-pocket expenses, or similar bene8 ficiary financial requirement that does not 

9 apply separately to individual items and 

10 services on substantially all medical and 

11 surgical benefits within a category of items 

12 and services (as specified in paragraph 

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

14 such requirement (or, if there is more than 

15 one such requirement for such category of 

16 items and services, the predominant re17 quirement for such category) both to med18 ical and surgical benefits within such cat19 egory and to mental health and substance20 related disorder benefits within such cat21 egory and shall not distinguish in the ap22 plication of such requirement between such 

23 medical and surgical benefits and such 

24 mental health and substance-related dis25 order benefits. 


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1 ‘‘(ii) OTHER FINANCIAL REQUIRE2 MENTS.—If the plan or coverage includes a 

3 beneficiary financial requirement not de4 scribed in clause (i) on substantially all 

5 medical and surgical benefits within a cat6 egory of items and services, the plan or cov7 erage may not impose such financial re8 quirement on mental health or substance-re9 lated disorder benefits for items and services 

10 within such category in a way that results 

11 in greater out-of-pocket expenses to the par12 ticipant or beneficiary than the predomi13 nant beneficiary financial requirement ap14 plicable to medical and surgical benefits for 

15 items and services within such category. 

16 ‘‘(iii) CONSTRUCTION.—Nothing in 

17 this subparagraph shall be construed as pro18 hibiting the plan or coverage from waiving 

19 the application of any deductible for mental 

20 health benefits or substance-related disorder 

21 benefits or both. 

22 ‘‘(C) BENEFICIARY FINANCIAL REQUIRE23 MENT DEFINED.—For purposes of this para24 graph, the term ‘beneficiary financial require25 ment’ includes, with respect to a plan or covVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H1424.RH H1424

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1 erage, any deductible, coinsurance, co-payment, 

2 other cost sharing, and limitation on the total 

3 amount that may be paid by a participant or 

4 beneficiary with respect to benefits under the 

5 plan or coverage, but does not include the appli6 cation of any aggregate lifetime limit or annual 

7 limit.’’; and 

8 (2) in subsection (b)— 

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

10 follows through ‘‘(1) as requiring’’ and inserting 

11 ‘‘construed as requiring’’; 

12 (B) by striking ‘‘; or’’ and inserting a pe13 riod; and 

14 (C) by striking paragraph (2). 

15 (b) EXPANSION TO SUBSTANCE-RELATED DISORDER

16 BENEFITS AND REVISION OF DEFINITION.—Such section is 

17 further amended— 

18 (1) by striking ‘‘mental health benefits’’ and in19 serting ‘‘mental health or substance-related disorder 

20 benefits’’ each place it appears; and 

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

22 (A) by striking ‘‘MENTAL HEALTH BENE23 FITS’’ and inserting ‘‘MENTAL HEALTH AND

24 SUBSTANCE-RELATED DISORDER BENEFITS’’; 


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

2 mental health services’’ and inserting ‘‘benefits 

3 with respect to services for mental health condi4 tions or substance-related disorders’’; and 

5 (C) by striking ‘‘, but does not include bene6 fits with respect to treatment of substance abuse 

7 or chemical dependency’’. 

8 (c) AVAILABILITY OF PLAN INFORMATION ABOUT CRI9 TERIA FOR MEDICAL NECESSITY.—Subsection (a) of such 

10 section, as amended by subsection (a)(1), is further amend11 ed by adding at the end the following new paragraph: 

12 ‘‘(5) AVAILABILITY OF PLAN INFORMATION.—The 

13 criteria for medical necessity determinations made 

14 under the plan with respect to mental health and sub15 stance-related disorder benefits (or the health insur16 ance coverage offered in connection with the plan 

17 with respect to such benefits) shall be made available 

18 in accordance with regulations by the plan adminis19 trator (or the health insurance issuer offering such 

20 coverage) to any current or potential participant, 

21 beneficiary, or contracting provider upon request. The 

22 reason for any denial under the plan (or coverage) of 

23 reimbursement or payment for services with respect to 

24 mental health and substance-related disorder benefits 

25 in the case of any participant or beneficiary shall, 


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1 upon request, be made available in accordance with 

2 regulations by the plan administrator (or the health 

3 insurance issuer offering such coverage) to the partici4 pant or beneficiary.’’. 

5 (d) MINIMUM BENEFIT REQUIREMENTS.—Subsection 

6 (a) of such section is further amended by adding at the end 

7 the following new paragraph: 

8 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQUITY

9 IN OUT-OF-NETWORK BENEFITS.— 

10 ‘‘(A) MINIMUM SCOPE OF MENTAL HEALTH

11 AND SUBSTANCE-RELATED DISORDER BENE12 FITS.—In the case of a group health plan (or 

13 health insurance coverage offered in connection 

14 with such a plan) that provides any mental 

15 health or substance-related disorder benefits, the 

16 plan or coverage shall include benefits for any 

17 mental health condition and substance-related 

18 disorder for which benefits are provided under 

19 the benefit plan option offered under chapter 89 

20 of title 5, United States Code, with the highest 

21 average enrollment as of the beginning of the 

22 most recent year beginning on or before the be23 ginning of the plan year involved. 

24 ‘‘(B) EQUITY IN COVERAGE OF OUT-OF-NET25 WORK BENEFITS.— 


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1 ‘‘(i) IN GENERAL.—In the case of a 

2 plan or coverage that provides both medical 

3 and surgical benefits and mental health or 

4 substance-related disorder benefits, if med5 ical and surgical benefits are provided for 

6 substantially all items and services in a 

7 category specified in clause (ii) furnished 

8 outside any network of providers established 

9 or recognized under such plan or coverage, 

10 the mental health and substance-related dis11 order benefits shall also be provided for 

12 items and services in such category fur13 nished outside any network of providers es14 tablished or recognized under such plan or 

15 coverage in accordance with the require16 ments of this section. 

17 ‘‘(ii) CATEGORIES OF ITEMS AND

18 SERVICES.—For purposes of clause (i), there 

19 shall be the following three categories of 

20 items and services for benefits, whether med21 ical and surgical benefits or mental health 

22 and substance-related disorder benefits, and 

23 all medical and surgical benefits and all 

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1 order benefits shall be classified into one of 

2 the following categories: 

3 ‘‘(I) EMERGENCY.—Items and 

4 services, whether furnished on an inpa5 tient or outpatient basis, required for 

6 the treatment of an emergency medical 

7 condition (including an emergency 

8 condition relating to mental health or 

9 substance-related disorders). 

10 ‘‘(II) INPATIENT.—Items and 

11 services not described in subclause (I) 

12 furnished on an inpatient basis. 

13 ‘‘(III) OUTPATIENT.—Items and 

14 services not described in subclause (I) 

15 furnished on an outpatient basis.’’. 

16 (e) CONSTRUCTION.—Subsection (a) of such section is 

17 further amended by adding at the end the following new 

18 paragraph: 

19 ‘‘(7) CONSTRUCTION.—Nothing in this section 

20 shall be construed to limit a group health plan (or 

21 health insurance offered in connection with such a 

22 plan) from managing the provision of medical, sur23 gical, mental health or substance-related disorder ben24 efits through any of the following methods: 

25 ‘‘(A) the application of utilization review; 


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1 ‘‘(B) the application of authorization or 

2 management practices; 

3 ‘‘(C) the application of medical necessity 

4 and appropriateness criteria; or 

5 ‘‘(D) other processes intended to ensure that 

6 beneficiaries receive appropriate care and medi7 cally necessary services for covered benefits; 

8 to the extent such methods are recognized both by in9 dustry and by providers and are not prohibited under 

10 applicable State laws.’’. 

11 (f) REVISION OF INCREASED COST EXEMPTION.— 

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

13 to read as follows: 

14 ‘‘(2) INCREASED COST EXEMPTION.— 

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

16 health plan (or health insurance coverage offered 

17 in connection with such a plan), if the applica18 tion of this section to such plan (or coverage) re19 sults in an increase for the plan year involved 

20 of the actual total costs of coverage with respect 

21 to medical and surgical benefits and mental 

22 health and substance-related disorder benefits 

23 under the plan (as determined and certified 

24 under subparagraph (C)) by an amount that ex25 ceeds the applicable percentage described in subVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6203 E:\BILLS\H1424.RH H1424

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1 paragraph (B) of the actual total plan costs, the 

2 provisions of this section shall not apply to such 

3 plan (or coverage) during the following plan 

4 year, and such exemption shall apply to the plan 

5 (or coverage) for 1 plan year. 

6 ‘‘(B) APPLICABLE PERCENTAGE.—With re7 spect to a plan (or coverage), the applicable per8 centage described in this paragraph shall be— 

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

10 plan year which begins after the effective 

11 date of the amendments made by section 

12 101 of the Paul Wellstone Mental Health 

13 and Addiction Equity Act of 2007; and 

14 ‘‘(ii) 1 percent in the case of each sub15 sequent plan year. 

16 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

17 Determinations as to increases in actual costs 

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

19 subsection shall be made and certified by a 

20 qualified and licensed actuary who is a member 

21 in good standing of the American Academy of 

22 Actuaries. 

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

24 group health plan (or a health insurance issuer 

25 offering coverage in connection with such a plan) 


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1 seeks an exemption under this paragraph, deter2 minations under subparagraph (A) shall be 

3 made after such plan (or coverage) has complied 

4 with this section for the first 6 months of the 

5 plan year involved. 

6 ‘‘(E) NOTIFICATION.—An election to modify 

7 coverage of mental health and substance-related 

8 disorder benefits as permitted under this para9 graph shall be treated as a material modification 

10 in the terms of the plan as described in section 

11 102(a) and notice of which shall be provided a 

12 reasonable period in advance of the change. 

13 ‘‘(F) NOTIFICATION OF APPROPRIATE AGEN14 CY.— 

15 ‘‘(i) IN GENERAL.—A group health 

16 plan that, based on upon a certification de17 scribed under subparagraph (C), qualifies 

18 for an exemption under this paragraph, 

19 and elects to implement the exemption, shall 

20 notify the Department of Labor of such elec21 tion. 

22 ‘‘(ii) REQUIREMENT.—A notification 

23 under clause (i) shall include— 

24 ‘‘(I) a description of the number 

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1 erage) involved at the time of the noti2 fication, and as applicable, at the time 

3 of any prior election of the cost-exemp4 tion under this paragraph by such 

5 plan (or coverage); 

6 ‘‘(II) for both the plan year upon 

7 which a cost exemption is sought and 

8 the year prior, a description of the ac9 tual total costs of coverage with respect 

10 to medical and surgical benefits and 

11 mental health and substance-related 

12 disorder benefits under the plan; and 

13 ‘‘(III) for both the plan year upon 

14 which a cost exemption is sought and 

15 the year prior, the actual total costs of 

16 coverage with respect to mental health 

17 and substance-related disorder benefits 

18 under the plan. 

19 ‘‘(iii) CONFIDENTIALITY.—A notifica20 tion under clause (i) shall be confidential. 

21 The Department of Labor shall make avail22 able, upon request to the appropriate com23 mittees of Congress and on not more than 

24 an annual basis, an anonymous itemization 

25 of such notifications, that includes— 


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1 ‘‘(I) a breakdown of States by the 

2 size and any type of employers submit3 ting such notification; and 

4 ‘‘(II) a summary of the data re5 ceived under clause (ii). 

6 ‘‘(G) NO IMPACT ON APPLICATION OF STATE

7 LAW.—The fact that a plan or coverage is ex8 empt from the provisions of this section under 

9 subparagraph (A) shall not affect the application 

10 of State law to such plan or coverage.’’. 

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

21 (i) CLARIFICATION REGARDING PREEMPTION.—Such 

22 section is further amended by inserting after subsection (e) 

23 the following new subsection: 

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


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1 ‘‘(1) IN GENERAL.—This part shall not be con2 strued to supersede any provision of State law which 

3 establishes, implements, or continues in effect any 

4 consumer protections, benefits, methods of access to 

5 benefits, rights, external review programs, or remedies 

6 solely relating to health insurance issuers in connec7 tion with group health insurance coverage (including 

8 benefit mandates or regulation of group health plans 

9 of 50 or fewer employees) except to the extent that 

10 such provision prevents the application of a require11 ment of this part. 

12 ‘‘(2) CONTINUED PREEMPTION WITH RESPECT TO

13 GROUP HEALTH PLANS.—Nothing in this section shall 

14 be construed to affect or modify the provisions of sec15 tion 514 with respect to group health plans. 

16 ‘‘(3) OTHER STATE LAWS.—Nothing in this sec17 tion shall be construed to exempt or relieve any per18 son from any laws of any State not solely related to 

19 health insurance issuers in connection with group 

20 health coverage insofar as they may now or hereafter 

21 relate to insurance, health plans, or health cov22 erage.’ ’’. 

23 (j) CONFORMING AMENDMENTS TO HEADING.— 

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

25 amended to read as follows: 


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1 ‘‘SEC. 712. EQUITY IN MENTAL HEALTH AND SUBSTANCE2 RELATED DISORDER BENEFITS.’’. 

3 (2) CLERICAL AMENDMENT.—The table of con4 tents in section 1 of such Act is amended by striking 

5 the item relating to section 712 and inserting the fol6 lowing new item: 

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

7 (k) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—The amendments made by 

9 this section shall apply with respect to plan years be10 ginning on or after January 1, 2008. 

11 (2) SPECIAL RULE FOR COLLECTIVE BARGAINING

12 AGREEMENTS.—In the case of a group health plan 

13 maintained pursuant to one or more collective bar14 gaining agreements between employee representatives 

15 and one or more employers ratified before the date of 

16 the enactment of this Act, the amendments made by 

17 this section shall not apply to plan years beginning 

18 before the later of— 

19 (A) the date on which the last of the collec20 tive bargaining agreements relating to the plan 

21 terminates (determined without regard to any 

22 extension thereof agreed to after the date of the 

23 enactment of this Act), or 

24 (B) January 1, 2010. 


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1 For purposes of subparagraph (A), any plan amend2 ment made pursuant to a collective bargaining agree3 ment relating to the plan which amends the plan sole4 ly to conform to any requirement imposed under an 

5 amendment under this section shall not be treated as 

6 a termination of such collective bargaining agree7 ment. 

8 (l) DOL ANNUAL SAMPLE COMPLIANCE.—The Sec9 retary of Labor shall annually sample and conduct random 

10 audits of group health plans (and health insurance coverage 

11 offered in connection with such plans) in order to determine 

12 their compliance with the amendments made by this Act 

13 and shall submit to the appropriate committees of Congress 

14 an annual report on such compliance with such amend15 ments. 

16 (m) ASSISTANCE TO PARTICIPANTS AND BENE17 FICIARIES.—The Secretary of Labor shall provide assist18 ance to participants and beneficiaries of group health plans 

19 with any questions or problems with compliance with the 

20 requirements of this Act. The Secretary shall notify partici21 pants and beneficiaries when they can obtain assistance 

22 from State consumer and insurance agencies and the Sec23 retary shall coordinate with State agencies to ensure that 

24 participants and beneficiaries are protected and afforded 

25 the rights provided under this Act. 


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1 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE 

2 ACT RELATING TO THE GROUP MARKET. 

3 (a) EXTENSION OF PARITY TO TREATMENT LIMITS

4 AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 

5 2705 of the Public Health Service Act (42 U.S.C. 300gg– 

6 5) is amended— 

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

8 following new paragraphs: 

9 ‘‘(3) TREATMENT LIMITS.— 

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

11 coverage does not include a treatment limit (as 

12 defined in subparagraph (D)) on substantially 

13 all medical and surgical benefits in any category 

14 of items or services (specified in subparagraph 

15 (C)), the plan or coverage may not impose any 

16 treatment limit on mental health and substance17 related disorder benefits that are classified in the 

18 same category of items or services. 

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

20 coverage includes a treatment limit on substan21 tially all medical and surgical benefits in any 

22 category of items or services, the plan or coverage 

23 may not impose such a treatment limit on men24 tal health and substance-related disorder benefits 

25 for items and services within such category that 

26 are more restrictive than the predominant treatVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6203 E:\BILLS\H1424.RH H1424

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1 ment limit that is applicable to medical and sur2 gical benefits for items and services within such 

3 category. 

4 ‘‘(C) CATEGORIES OF ITEMS AND SERVICES

5 FOR APPLICATION OF TREATMENT LIMITS AND

6 BENEFICIARY FINANCIAL REQUIREMENTS.—For 

7 purposes of this paragraph and paragraph (4), 

8 there shall be the following four categories of 

9 items and services for benefits, whether medical 

10 and surgical benefits or mental health and sub11 stance-related disorder benefits, and all medical 

12 and surgical benefits and all mental health and 

13 substance related benefits shall be classified into 

14 one of the following categories: 

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

16 and services furnished on an inpatient basis 

17 and within a network of providers estab18 lished or recognized under such plan or cov19 erage. 

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

21 Items and services furnished on an inpa22 tient basis and outside any network of pro23 viders established or recognized under such 

24 plan or coverage. 


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1 ‘‘(iii) OUTPATIENT, IN-NETWORK.— 

2 Items and services furnished on an out3 patient basis and within a network of pro4 viders established or recognized under such 

5 plan or coverage. 

6 ‘‘(iv) OUTPATIENT, OUT-OF-NET7 WORK.—Items and services furnished on an 

8 outpatient basis and outside any network of 

9 providers established or recognized under 

10 such plan or coverage. 

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

12 purposes of this paragraph, the term ‘treatment 

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

14 limitation on the frequency of treatment, number 

15 of visits or days of coverage, or other similar 

16 limit on the duration or scope of treatment 

17 under the plan or coverage. 

18 ‘‘(E) PREDOMINANCE.—For purposes of this 

19 subsection, a treatment limit or financial re20 quirement with respect to a category of items 

21 and services is considered to be predominant if 

22 it is the most common or frequent of such type 

23 of limit or requirement with respect to such cat24 egory of items and services. 

25 ‘‘(4) BENEFICIARY FINANCIAL REQUIREMENTS.— 


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1 ‘‘(A) NO BENEFICIARY FINANCIAL REQUIRE2 MENT.—If the plan or coverage does not include 

3 a beneficiary financial requirement (as defined 

4 in subparagraph (C)) on substantially all med5 ical and surgical benefits within a category of 

6 items and services (specified in paragraph 

7 (3)(C)), the plan or coverage may not impose 

8 such a beneficiary financial requirement on 

9 mental health and substance-related disorder 

10 benefits for items and services within such cat11 egory. 

12 ‘‘(B) BENEFICIARY FINANCIAL REQUIRE13 MENT.— 

14 ‘‘(i) TREATMENT OF DEDUCTIBLES, 

15 OUT-OF-POCKET LIMITS, AND SIMILAR FI16 NANCIAL REQUIREMENTS.—If the plan or 

17 coverage includes a deductible, a limitation 

18 on out-of-pocket expenses, or similar bene19 ficiary financial requirement that does not 

20 apply separately to individual items and 

21 services on substantially all medical and 

22 surgical benefits within a category of items 

23 and services, the plan or coverage shall 

24 apply such requirement (or, if there is more 

25 than one such requirement for such category 


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1 of items and services, the predominant re2 quirement for such category) both to med3 ical and surgical benefits within such cat4 egory and to mental health and substance5 related disorder benefits within such cat6 egory and shall not distinguish in the ap7 plication of such requirement between such 

8 medical and surgical benefits and such 

9 mental health and substance-related dis10 order benefits. 

11 ‘‘(ii) OTHER FINANCIAL REQUIRE12 MENTS.—If the plan or coverage includes a 

13 beneficiary financial requirement not de14 scribed in clause (i) on substantially all 

15 medical and surgical benefits within a cat16 egory of items and services, the plan or cov17 erage may not impose such financial re18 quirement on mental health and substance19 related disorder benefits for items and serv20 ices within such category in a way that is 

21 more costly to the participant or beneficiary 

22 than the predominant beneficiary financial 

23 requirement applicable to medical and sur24 gical benefits for items and services within 

25 such category. 


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1 ‘‘(C) BENEFICIARY FINANCIAL REQUIRE2 MENT DEFINED.—For purposes of this para3 graph, the term ‘beneficiary financial require4 ment’ includes, with respect to a plan or cov5 erage, any deductible, coinsurance, co-payment, 

6 other cost sharing, and limitation on the total 

7 amount that may be paid by a participant or 

8 beneficiary with respect to benefits under the 

9 plan or coverage, but does not include the appli10 cation of any aggregate lifetime limit or annual 

11 limit.’’; and 

12 (2) in subsection (b)— 

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

14 follows through ‘‘(1) as requiring’’ and inserting 

15 ‘‘construed as requiring’’; 

16 (B) by striking ‘‘; or’’ and inserting a pe17 riod; and 

18 (C) by striking paragraph (2). 

19 (b) EXPANSION TO SUBSTANCE-RELATED DISORDER

20 BENEFITS AND REVISION OF DEFINITION.—Such section is 

21 further amended— 

22 (1) by striking ‘‘mental health benefits’’ and in23 serting ‘‘mental health and substance-related disorder 

24 benefits’’ each place it appears; and 

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


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1 (A) by striking ‘‘MENTAL HEALTH BENE2 FITS’’ and inserting ‘‘MENTAL HEALTH AND

3 SUBSTANCE-RELATED DISORDER BENEFITS’’; 

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

5 mental health services’’ and inserting ‘‘benefits 

6 with respect to services for mental health condi7 tions or substance-related disorders’’; and 

8 (C) by striking ‘‘, but does not include bene9 fits with respect to treatment of substances abuse 

10 or chemical dependency’’. 

11 (c) AVAILABILITY OF PLAN INFORMATION ABOUT CRI12 TERIA FOR MEDICAL NECESSITY.—Subsection (a) of such 

13 section, as amended by subsection (a)(1), is further amend14 ed by adding at the end the following new paragraph: 

15 ‘‘(5) AVAILABILITY OF PLAN INFORMATION.—The 

16 criteria for medical necessity determinations made 

17 under the plan with respect to mental health and sub18 stance-related disorder benefits (or the health insur19 ance coverage offered in connection with the plan 

20 with respect to such benefits) shall be made available 

21 by the plan administrator (or the health insurance 

22 issuer offering such coverage) to any current or poten23 tial participant, beneficiary, or contracting provider 

24 upon request. The reason for any denial under the 

25 plan (or coverage) of reimbursement or payment for 


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1 services with respect to mental health and substance2 related disorder benefits in the case of any partici3 pant or beneficiary shall, upon request, be made 

4 available by the plan administrator (or the health in5 surance issuer offering such coverage) to the partici6 pant or beneficiary.’’. 

7 (d) MINIMUM BENEFIT REQUIREMENTS.—Subsection 

8 (a) of such section is further amended by adding at the end 

9 the following new paragraph: 

10 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQUITY

11 IN OUT-OF-NETWORK BENEFITS.— 

12 ‘‘(A) MINIMUM SCOPE OF MENTAL HEALTH

13 AND SUBSTANCE-RELATED DISORDER BENE14 FITS.—In the case of a group health plan (or 

15 health insurance coverage offered in connection 

16 with such a plan) that provides any mental 

17 health and substance-related disorder benefits, 

18 the plan or coverage shall include benefits for 

19 any mental health condition or substance-related 

20 disorder for which benefits are provided under 

21 the benefit plan option offered under chapter 89 

22 of title 5, United States Code, with the highest 

23 average enrollment as of the beginning of the 

24 most recent year beginning on or before the be25 ginning of the plan year involved. 


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1 ‘‘(B) EQUITY IN COVERAGE OF OUT-OF-NET2 WORK BENEFITS.— 

3 ‘‘(i) IN GENERAL.—In the case of a 

4 plan or coverage that provides both medical 

5 and surgical benefits and mental health and 

6 substance-related disorder benefits, if med7 ical and surgical benefits are provided for 

8 substantially all items and services in a 

9 category specified in clause (ii) furnished 

10 outside any network of providers established 

11 or recognized under such plan or coverage, 

12 the mental health and substance-related dis13 order benefits shall also be provided for 

14 items and services in such category fur15 nished outside any network of providers es16 tablished or recognized under such plan or 

17 coverage in accordance with the require18 ments of this section. 

19 ‘‘(ii) CATEGORIES OF ITEMS AND

20 SERVICES.—For purposes of clause (i), there 

21 shall be the following three categories of 

22 items and services for benefits, whether med23 ical and surgical benefits or mental health 

24 and substance-related disorder benefits, and 

25 all medical and surgical benefits and all 


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1 mental health and substance-related dis2 order benefits shall be classified into one of 

3 the following categories: 

4 ‘‘(I) EMERGENCY.—Items and 

5 services, whether furnished on an inpa6 tient or outpatient basis, required for 

7 the treatment of an emergency medical 

8 condition (including an emergency 

9 condition relating to mental health 

10 and substance-related disorders). 

11 ‘‘(II) INPATIENT.—Items and 

12 services not described in subclause (I) 

13 furnished on an inpatient basis. 

14 ‘‘(III) OUTPATIENT.—Items and 

15 services not described in subclause (I) 

16 furnished on an outpatient basis.’’. 

17 (e) REVISION OF INCREASED COST EXEMPTION.— 

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

19 to read as follows: 

20 ‘‘(2) INCREASED COST EXEMPTION.— 

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

22 health plan (or health insurance coverage offered 

23 in connection with such a plan), if the applica24 tion of this section to such plan (or coverage) re25 sults in an increase for the plan year involved 


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1 of the actual total costs of coverage with respect 

2 to medical and surgical benefits and mental 

3 health and substance-related disorder benefits 

4 under the plan (as determined and certified 

5 under subparagraph (C)) by an amount that ex6 ceeds the applicable percentage described in sub7 paragraph (B) of the actual total plan costs, the 

8 provisions of this section shall not apply to such 

9 plan (or coverage) during the following plan 

10 year, and such exemption shall apply to the plan 

11 (or coverage) for 1 plan year. 

12 ‘‘(B) APPLICABLE PERCENTAGE.—With re13 spect to a plan (or coverage), the applicable per14 centage described in this paragraph shall be— 

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

16 plan year which begins after the date of the 

17 enactment of the Paul Wellstone Mental 

18 Health and Addiction Equity Act of 2007; 

19 and 

20 ‘‘(ii) 1 percent in the case of each sub21 sequent plan year. 

22 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

23 Determinations as to increases in actual costs 

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

25 subsection shall be made by a qualified actuary 


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1 who is a member in good standing of the Amer2 ican Academy of Actuaries. Such determinations 

3 shall be certified by the actuary and be made 

4 available to the general public. 

5 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

6 group health plan (or a health insurance issuer 

7 offering coverage in connection with such a plan) 

8 seeks an exemption under this paragraph, deter9 minations under subparagraph (A) shall be 

10 made after such plan (or coverage) has complied 

11 with this section for the first 6 months of the 

12 plan year involved. 

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

14 under this part shall comply with the notice re15 quirement under section 712(c)(2)(E) of the Em16 ployee Retirement Income Security Act of 1974 

17 with respect to the a modification of mental 

18 health and substance-related disorder benefits as 

19 permitted under this paragraph as if such sec20 tion applied to such plan.’’. 

21 (f) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY22 ERS.—Subsection (c)(1)(B) of such section is amended— 

23 (1) by inserting ‘‘(or 1 in the case of an em24 ployer residing in a State that permits small groups 


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

2 first place it appears; and 

3 (2) by striking ‘‘and who employs at least 2 em4 ployees on the first day of the plan year’’. 

5 (g) ELIMINATION OF SUNSET PROVISION.—Such sec6 tion is amended by striking out subsection (f). 

7 (h) CLARIFICATION REGARDING PREEMPTION.—Such 

8 section is further amended by inserting after subsection (e) 

9 the following new subsection: 

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

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

12 be construed to preempt any State law that provides 

13 greater consumer protections, benefits, methods of ac14 cess to benefits, rights or remedies that are greater 

15 than the protections, benefits, methods of access to 

16 benefits, rights or remedies provided under this sec17 tion. 

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

19 shall be construed to affect or modify the provisions 

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

21 (i) CONFORMING AMENDMENT TO HEADING.—The 

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


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1 ‘‘SEC. 2705.’’. 

2 (j) EFFECTIVE DATE.—The amendments made by this 

3 section shall apply with respect to plan years beginning on 

4 or after January 1, 2008. 

5 SEC. 4. AMENDMENTS TO THE INTERNAL REVENUE CODE 

6 OF 1986. 

7 (a) EXTENSION OF PARITY TO TREATMENT LIMITS

8 AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 

9 9812 of the Internal Revenue Code of 1986 is amended— 

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

11 following new paragraphs: 

12 ‘‘(3) TREATMENT LIMITS.— 

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

14 does not include a treatment limit (as defined in 

15 subparagraph (D)) on substantially all medical 

16 and surgical benefits in any category of items or 

17 services (specified in subparagraph (C)), the 

18 plan may not impose any treatment limit on 

19 mental health and substance-related disorder 

20 benefits that are classified in the same category 

21 of items or services. 

22 ‘‘(B) TREATMENT LIMIT.—If the plan in23 cludes a treatment limit on substantially all 

24 medical and surgical benefits in any category of 

25 items or services, the plan may not impose such 

26 a treatment limit on mental health and subVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6203 E:\BILLS\H1424.RH H1424

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1 stance-related disorder benefits for items and 

2 services within such category that are more re3 strictive than the predominant treatment limit 

4 that is applicable to medical and surgical bene5 fits for items and services within such category. 

6 ‘‘(C) CATEGORIES OF ITEMS AND SERVICES

7 FOR APPLICATION OF TREATMENT LIMITS AND

8 BENEFICIARY FINANCIAL REQUIREMENTS.—For 

9 purposes of this paragraph and paragraph (4), 

10 there shall be the following four categories of 

11 items and services for benefits, whether medical 

12 and surgical benefits or mental health and sub13 stance-related disorder benefits, and all medical 

14 and surgical benefits and all mental health and 

15 substance related benefits shall be classified into 

16 one of the following categories: 

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

18 and services furnished on an inpatient basis 

19 and within a network of providers estab20 lished or recognized under such plan or cov21 erage. 

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

23 Items and services furnished on an inpa24 tient basis and outside any network of proVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6203 E:\BILLS\H1424.RH H1424

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•HR 1424 RH

1 viders established or recognized under such 

2 plan or coverage. 

3 ‘‘(iii) OUTPATIENT, IN-NETWORK.— 

4 Items and services furnished on an out5 patient basis and within a network of pro6 viders established or recognized under such 

7 plan or coverage. 

8 ‘‘(iv) OUTPATIENT, OUT-OF-NET9 WORK.—Items and services furnished on an 

10 outpatient basis and outside any network of 

11 providers established or recognized under 

12 such plan or coverage. 

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

14 purposes of this paragraph, the term ‘treatment 

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

16 on the frequency of treatment, number of visits 

17 or days of coverage, or other similar limit on the 

18 duration or scope of treatment under the plan. 

19 ‘‘(E) PREDOMINANCE.—For purposes of this 

20 subsection, a treatment limit or financial re21 quirement with respect to a category of items 

22 and services is considered to be predominant if 

23 it is the most common or frequent of such type 

24 of limit or requirement with respect to such cat25 egory of items and services. 


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1 ‘‘(4) BENEFICIARY FINANCIAL REQUIREMENTS.— 

2 ‘‘(A) NO BENEFICIARY FINANCIAL REQUIRE3 MENT.—If the plan does not include a bene4 ficiary financial requirement (as defined in sub5 paragraph (C)) on substantially all medical and 

6 surgical benefits within a category of items and 

7 services (specified in paragraph (3)(C)), the plan 

8 may not impose such a beneficiary financial re9 quirement on mental health and substance-re10 lated disorder benefits for items and services 

11 within such category. 

12 ‘‘(B) BENEFICIARY FINANCIAL REQUIRE13 MENT.— 

14 ‘‘(i) TREATMENT OF DEDUCTIBLES, 

15 OUT-OF-POCKET LIMITS, AND SIMILAR FI16 NANCIAL REQUIREMENTS.—If the plan or 

17 coverage includes a deductible, a limitation 

18 on out-of-pocket expenses, or similar bene19 ficiary financial requirement that does not 

20 apply separately to individual items and 

21 services on substantially all medical and 

22 surgical benefits within a category of items 

23 and services, the plan or coverage shall 

24 apply such requirement (or, if there is more 

25 than one such requirement for such category 


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1 of items and services, the predominant re2 quirement for such category) both to med3 ical and surgical benefits within such cat4 egory and to mental health and substance5 related disorder benefits within such cat6 egory and shall not distinguish in the ap7 plication of such requirement between such 

8 medical and surgical benefits and such 

9 mental health and substance-related dis10 order benefits. 

11 ‘‘(ii) OTHER FINANCIAL REQUIRE12 MENTS.—If the plan includes a beneficiary 

13 financial requirement not described in 

14 clause (i) on substantially all medical and 

15 surgical benefits within a category of items 

16 and services, the plan may not impose such 

17 financial requirement on mental health and 

18 substance-related disorder benefits for items 

19 and services within such category in a way 

20 that is more costly to the participant or 

21 beneficiary than the predominant bene22 ficiary financial requirement applicable to 

23 medical and surgical benefits for items and 

24 services within such category. 


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1 ‘‘(C) BENEFICIARY FINANCIAL REQUIRE2 MENT DEFINED.—For purposes of this para3 graph, the term ‘beneficiary financial require4 ment’ includes, with respect to a plan, any de5 ductible, coinsurance, co-payment, other cost 

6 sharing, and limitation on the total amount that 

7 may be paid by a participant or beneficiary 

8 with respect to benefits under the plan, but does 

9 not include the application of any aggregate life10 time limit or annual limit.’’; and 

11 (2) in subsection (b)— 

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

13 follows through ‘‘(1) as requiring’’ and inserting 

14 ‘‘construed as requiring’’; 

15 (B) by striking ‘‘; or’’ and inserting a pe16 riod; and 

17 (C) by striking paragraph (2). 

18 (b) EXPANSION TO SUBSTANCE-RELATED DISORDER

19 BENEFITS AND REVISION OF DEFINITION.—Such section is 

20 further amended— 

21 (1) by striking ‘‘mental health benefits’’ and in22 serting ‘‘mental health and substance-related disorder 

23 benefits’’ each place it appears; and 

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


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1 (A) by striking ‘‘MENTAL HEALTH BENE2 FITS’’ in the heading and inserting ‘‘MENTAL

3 HEALTH AND SUBSTANCE-RELATED DISORDER

4 BENEFITS’’; 

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

6 mental health services’’ and inserting ‘‘benefits 

7 with respect to services for mental health condi8 tions or substance-related disorders’’; and 

9 (C) by striking ‘‘, but does not include bene10 fits with respect to treatment of substances abuse 

11 or chemical dependency’’. 

12 (c) AVAILABILITY OF PLAN INFORMATION ABOUT CRI13 TERIA FOR MEDICAL NECESSITY.—Subsection (a) of such 

14 section, as amended by subsection (a)(1), is further amend15 ed by adding at the end the following new paragraph: 

16 ‘‘(5) AVAILABILITY OF PLAN INFORMATION.—The 

17 criteria for medical necessity determinations made 

18 under the plan with respect to mental health and sub19 stance-related disorder benefits shall be made avail20 able by the plan administrator to any current or po21 tential participant, beneficiary, or contracting pro22 vider upon request. The reason for any denial under 

23 the plan of reimbursement or payment for services 

24 with respect to mental health and substance-related 

25 disorder benefits in the case of any participant or 


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1 beneficiary shall, upon request, be made available by 

2 the plan administrator to the participant or bene3 ficiary.’’. 

4 (d) MINIMUM BENEFIT REQUIREMENTS.—Subsection 

5 (a) of such section is further amended by adding at the end 

6 the following new paragraph: 

7 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQUITY

8 IN OUT-OF-NETWORK BENEFITS.— 

9 ‘‘(A) MINIMUM SCOPE OF MENTAL HEALTH

10 AND SUBSTANCE-RELATED DISORDER BENE11 FITS.—In the case of a group health plan (or 

12 health insurance coverage offered in connection 

13 with such a plan) that provides any mental 

14 health and substance-related disorder benefits, 

15 the plan or coverage shall include benefits for 

16 any mental health condition or substance-related 

17 disorder for which benefits are provided under 

18 the benefit plan option offered under chapter 89 

19 of title 5, United States Code, with the highest 

20 average enrollment as of the beginning of the 

21 most recent year beginning on or before the be22 ginning of the plan year involved. 

23 ‘‘(B) EQUITY IN COVERAGE OF OUT-OF-NET24 WORK BENEFITS.— 


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1 ‘‘(i) IN GENERAL.—In the case of a 

2 plan that provides both medical and sur3 gical benefits and mental health and sub4 stance-related disorder benefits, if medical 

5 and surgical benefits are provided for sub6 stantially all items and services in a cat7 egory specified in clause (ii) furnished out8 side any network of providers established or 

9 recognized under such plan or coverage, the 

10 mental health and substance-related dis11 order benefits shall also be provided for 

12 items and services in such category fur13 nished outside any network of providers es14 tablished or recognized under such plan in 

15 accordance with the requirements of this 

16 section. 

17 ‘‘(ii) CATEGORIES OF ITEMS AND

18 SERVICES.—For purposes of clause (i), there 

19 shall be the following three categories of 

20 items and services for benefits, whether med21 ical and surgical benefits or mental health 

22 and substance-related disorder benefits, and 

23 all medical and surgical benefits and all 

24 mental health and substance-related disVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6203 E:\BILLS\H1424.RH H1424

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1 order benefits shall be classified into one of 

2 the following categories: 

3 ‘‘(I) EMERGENCY.—Items and 

4 services, whether furnished on an inpa5 tient or outpatient basis, required for 

6 the treatment of an emergency medical 

7 condition (including an emergency 

8 condition relating to mental health 

9 and substance-related disorders). 

10 ‘‘(II) INPATIENT.—Items and 

11 services not described in subclause (I) 

12 furnished on an inpatient basis. 

13 ‘‘(III) OUTPATIENT.—Items and 

14 services not described in subclause (I) 

15 furnished on an outpatient basis.’’. 

16 (e) REVISION OF INCREASED COST EXEMPTION.— 

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

18 to read as follows: 

19 ‘‘(2) INCREASED COST EXEMPTION.— 

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

21 health plan, if the application of this section to 

22 such plan results in an increase for the plan 

23 year involved of the actual total costs of coverage 

24 with respect to medical and surgical benefits and 

25 mental health and substance-related disorder 


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1 benefits under the plan (as determined and cer2 tified under subparagraph (C)) by an amount 

3 that exceeds the applicable percentage described 

4 in subparagraph (B) of the actual total plan 

5 costs, the provisions of this section shall not 

6 apply to such plan during the following plan 

7 year, and such exemption shall apply to the plan 

8 for 1 plan year. 

9 ‘‘(B) APPLICABLE PERCENTAGE.—With re10 spect to a plan, the applicable percentage de11 scribed in this paragraph shall be— 

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

13 plan year which begins after the date of the 

14 enactment of the Paul Wellstone Mental 

15 Health and Addiction Equity Act of 2007; 

16 and 

17 ‘‘(ii) 1 percent in the case of each sub18 sequent plan year. 

19 ‘‘(C) DETERMINATIONS BY ACTUARIES.— 

20 Determinations as to increases in actual costs 

21 under a plan for purposes of this subsection shall 

22 be made by a qualified actuary who is a member 

23 in good standing of the American Academy of 

24 Actuaries. Such determinations shall be certified 


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1 by the actuary and be made available to the gen2 eral public. 

3 ‘‘(D) 6-MONTH DETERMINATIONS.—If a 

4 group health plan seeks an exemption under this 

5 paragraph, determinations under subparagraph 

6 (A) shall be made after such plan has complied 

7 with this section for the first 6 months of the 

8 plan year involved.’’. 

9 (f) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY10 ERS.—Subsection (c)(1) of such section is amended to read 

11 as follows: 

12 ‘‘(1) SMALL EMPLOYER EXEMPTION.— 

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

14 apply to any group health plan for any plan 

15 year of a small employer. 

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

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

18 means, with respect to a calendar year and a 

19 plan year, an employer who employed an aver20 age of at least 2 (or 1 in the case of an employer 

21 residing in a State that permits small groups to 

22 include a single individual) but not more than 

23 50 employees on business days during the pre24 ceding calendar year. For purposes of the pre25 ceding sentence, all persons treated as a single 


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1 employer under subsection (b), (c), (m), or (o) of 

2 section 414 shall be treated as 1 employer and 

3 rules similar to rules of subparagraphs (B) and 

4 (C) of section 4980D(d)(2) shall apply.’’. 

5 (g) ELIMINATION OF SUNSET PROVISION.—Such sec6 tion is amended by striking subsection (f). 

7 (h) CONFORMING AMENDMENTS TO HEADING.— 

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

9 amended to read as follows: 

10 ‘‘SEC. 9812.’’. 

11 (2) CLERICAL AMENDMENT.—The table of sec12 tions for subchapter B of chapter 100 of the Internal 

13 Revenue Code of 1986 is amended by striking the item 

14 relating to section 9812 and inserting the following 

15 new item: 

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

16 (i) EFFECTIVE DATE.—The amendments made by this 

17 section shall apply with respect to plan years beginning on 

18 or after January 1, 2008. 

19 SEC. 5. STUDIES AND REPORTS. 

20 (a) IMPLEMENTATION OF ACT.— 

21 (1) GAO STUDY.—The Comptroller General of 

22 the United States shall conduct a study that evaluates 

23 the effect of the implementation of the amendments 

24 made by this Act on— 

25 (A) the cost of health insurance coverage; 


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1 (B) access to health insurance coverage (in2 cluding the availability of in-network providers); 

3 (C) the quality of health care; 

4 (D) Medicare, Medicaid, and State and 

5 local mental health and substance abuse treat6 ment spending; 

7 (E) the number of individuals with private 

8 insurance who received publicly funded health 

9 care for mental health and substance-related dis10 orders; 

11 (F) spending on public services, such as the 

12 criminal justice system, special education, and 

13 income assistance programs; 

14 (G) the use of medical management of men15 tal health and substance-related disorder benefits 

16 and medical necessity determinations by group 

17 health plans (and health insurance issuers offer18 ing health insurance coverage in connection with 

19 such plans) and timely access by participants 

20 and beneficiaries to clinically-indicated care for 

21 mental health and substance-use disorders; and 

22 (H) other matters as determined appro23 priate by the Comptroller General. 

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

25 date of enactment of this Act, the Comptroller General 


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1 shall prepare and submit to the appropriate commit2 tees of the Congress a report containing the results of 

3 the study conducted under paragraph (1). 

4 (b) GAO REPORT ON UNIFORM PATIENT PLACEMENT

5 CRITERIA.—Not later than 18 months after the date of the 

6 enactment of this Act, the Comptroller General shall submit 

7 to the appropriate committees of each House of the Congress 

8 a report on availability of uniform patient placement cri9 teria for mental health and substance-related disorders that 

10 could be used by group health plans and health insurance 

11 issuers to guide determinations of medical necessity and the 

12 extent to which health plans utilize such criteria. If such 

13 criteria do not exist, the report shall include recommenda14 tions on a process for developing such criteria. 

15 (c) DOL BIANNUAL REPORT ON OBSTACLES IN OB16 TAINING COVERAGE.—Every two years, the Secretary of 

17 Labor, in consultation with the Secretaries of Health and 

18 Human Services and the Treasury, shall submit to the ap19 propriate committees of each House of the Congress a report 

20 on obstacles that individuals face in obtaining mental 

21 health and substance-related disorder care under their 

22 health plans. 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 the ‘‘Paul Wellstone Mental Health and Addic4 tion Equity Act of 2007’’. 

5 (b) TABLE OF CONTENTS.—The table of con6 tents of 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. 4. Amendments to the Internal Revenue Code of 1986. 

Sec. 5. Government Accountability Office studies and reports. 

7 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN8 COME SECURITY ACT OF 1974. 

9 (a) EXTENSION OF PARITY TO TREATMENT

10 LIMITS AND BENEFICIARY FINANCIAL REQUIRE11 MENTS.—Section 712 of the Employee Retire12 ment Income Security Act of 1974 (29 U.S.C. 

13 1185a) is amended— 

14 (1) in subsection (a), by adding at the 

15 end the following new paragraphs: 

16 ‘‘(3) TREATMENT LIMITS.— 

17 ‘‘(A) NO TREATMENT LIMIT.—If the 

18 plan or coverage does not include a 

19 treatment limit (as defined in sub20 paragraph (D)) on substantially all 

21 medical and surgical benefits in any 

22 category of items or services, the plan 


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1 or coverage may not impose any 

2 treatment limit on mental health and 

3 substance-related disorder benefits 

4 that are classified in the same cat5 egory of items or services. 

6 ‘‘(B) TREATMENT LIMIT.—If the plan 

7 or coverage includes a treatment 

8 limit on substantially all medical and 

9 surgical benefits in any category of 

10 items or services, the plan or cov11 erage may not impose such a treat12 ment limit on mental health and sub13 stance-related disorder benefits for 

14 items and services within such cat15 egory that are more restrictive than 

16 the predominant treatment limit that 

17 is applicable to medical and surgical 

18 benefits for items and services within 

19 such category. 

20 ‘‘(C) CATEGORIES OF ITEMS AND

21 SERVICES FOR APPLICATION OF TREAT22 MENT LIMITS AND BENEFICIARY FINAN23 CIAL REQUIREMENTS.—For purposes of 

24 this paragraph and paragraph (4), 

25 there shall be the following four catVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 egories of items and services for ben2 efits, whether medical and surgical 

3 benefits or mental health and sub4 stance-related disorder benefits, and 

5 all medical and surgical benefits and 

6 all mental health and substance re7 lated benefits shall be classified into 

8 one of the following categories: 

9 ‘‘(i) INPATIENT, IN-NETWORK.—

10 Items and services furnished on 

11 an inpatient basis and within a 

12 network of providers established 

13 or recognized under such plan or 

14 coverage. 

15 ‘‘(ii) INPATIENT, OUT-OF-NET16 WORK.—Items and services fur17 nished on an inpatient basis and 

18 outside any network of providers 

19 established or recognized under 

20 such plan or coverage. 

21 ‘‘(iii) OUTPATIENT, IN-NET22 WORK.—Items and services fur23 nished on an outpatient basis and 

24 within a network of providers esVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 tablished or recognized under 

2 such plan or coverage. 

3 ‘‘(iv) OUTPATIENT, OUT-OF-NET4 WORK.—Items and services fur5 nished on an outpatient basis and 

6 outside any network of providers 

7 established or recognized under 

8 such plan or coverage. 

9 ‘‘(D) TREATMENT LIMIT DEFINED.—

10 For purposes of this paragraph, the 

11 term ‘treatment limit’ means, with re12 spect to a plan or coverage, limitation 

13 on the frequency of treatment, num14 ber of visits or days of coverage, or 

15 other similar limit on the duration or 

16 scope of treatment under the plan or 

17 coverage. 

18 ‘‘(E) PREDOMINANCE.—For pur19 poses of this subsection, a treatment 

20 limit or financial requirement with 

21 respect to a category of items and 

22 services is considered to be predomi23 nant if it is the most common or fre24 quent of such type of limit or requireVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 ment with respect to such category of 

2 items and services. 

3 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE4 MENTS.—

5 ‘‘(A) NO BENEFICIARY FINANCIAL RE6 QUIREMENT.—If the plan or coverage 

7 does not include a beneficiary finan8 cial requirement (as defined in sub9 paragraph (C)) on substantially all 

10 medical and surgical benefits within 

11 a category of items and services 

12 (specified under paragraph (3)(C)), 

13 the plan or coverage may not impose 

14 such a beneficiary financial require15 ment on mental health and sub16 stance-related disorder benefits for 

17 items and services within such cat18 egory. 

19 ‘‘(B) BENEFICIARY FINANCIAL RE20 QUIREMENT.—

21 ‘‘(i) TREATMENT OF

22 DEDUCTIBLES, OUT-OF-POCKET LIM23 ITS, AND SIMILAR FINANCIAL RE24 QUIREMENTS.—If the plan or cov25 erage includes a deductible, a limVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 itation on out-of-pocket expenses, 

2 or similar beneficiary financial 

3 requirement that does not apply 

4 separately to individual items and 

5 services on substantially all med6 ical and surgical benefits within a 

7 category of items and services (as 

8 specified in paragraph (3)(C)), the 

9 plan or coverage shall apply such 

10 requirement (or, if there is more 

11 than one such requirement for 

12 such category of items and serv13 ices, the predominant require14 ment for such category) both to 

15 medical and surgical benefits 

16 within such category and to men17 tal health and substance-related 

18 disorder benefits within such cat19 egory and shall not distinguish in 

20 the application of such require21 ment between such medical and 

22 surgical benefits and such mental 

23 health and substance-related dis24 order benefits. 


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1 ‘‘(ii) OTHER FINANCIAL REQUIRE2 MENTS.—If the plan or coverage 

3 includes a beneficiary financial 

4 requirement not described in 

5 clause (i) on substantially all med6 ical and surgical benefits within a 

7 category of items and services, 

8 the plan or coverage may not im9 pose such financial requirement 

10 on mental health and substance11 related disorder benefits for items 

12 and services within such category 

13 in a way that is more costly to the 

14 participant or beneficiary than 

15 the predominant beneficiary fi16 nancial requirement applicable to 

17 medical and surgical benefits for 

18 items and services within such 

19 category. 

20 ‘‘(C) BENEFICIARY FINANCIAL RE21 QUIREMENT DEFINED.—For purposes of 

22 this paragraph, the term ‘beneficiary 

23 financial requirement’ includes, with 

24 respect to a plan or coverage, any de25 ductible, coinsurance, co-payment, 


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1 other cost sharing, and limitation on 

2 the total amount that may be paid by 

3 a participant or beneficiary with re4 spect to benefits under the plan or 

5 coverage, but does not include the ap6 plication of any aggregate lifetime 

7 limit or annual limit.’’; and 

8 (2) in subsection (b)—

9 (A) by striking ‘‘construed—’’ and 

10 all that follows through ‘‘(1) as requir11 ing’’ and inserting ‘‘construed as re12 quiring’’; 

13 (B) by striking ‘‘; or’’ and insert14 ing a period; and 

15 (C) by striking paragraph (2). 

16 (b) EXPANSION TO SUBSTANCE-RELATED DIS17 ORDER BENEFITS AND REVISION OF DEFINI18 TION.—Such section is further amended—

19 (1) by striking ‘‘mental health bene20 fits’’ and inserting ‘‘mental health and 

21 substance-related disorder benefits’’ each 

22 place it appears; and 

23 (2) in paragraph (4) of subsection 

24 (e)—


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1 (A) by striking ‘‘MENTAL HEALTH

2 BENEFITS’’ and inserting ‘‘MENTAL

3 HEALTH AND SUBSTANCE-RELATED DIS4 ORDER BENEFITS’’; 

5 (B) by striking ‘‘benefits with re6 spect to mental health services’’ and 

7 inserting ‘‘benefits with respect to 

8 services for mental health conditions 

9 or substance-related disorders’’; and 

10 (C) by striking ‘‘, but does not in11 clude benefits with respect to treat12 ment of substances abuse or chemical 

13 dependency’’. 

14 (c) AVAILABILITY OF PLAN INFORMATION

15 ABOUT CRITERIA FOR MEDICAL NECESSITY.—

16 Subsection (a) of such section, as amended by 

17 subsection (a)(1), is further amended by add18 ing at the end the following new paragraph: 

19 ‘‘(5) AVAILABILITY OF PLAN INFORMA20 TION.—The criteria for medical necessity 

21 determinations made under the plan with 

22 respect to mental health and substance23 related disorder benefits (or the health 

24 insurance coverage offered in connection 

25 with the plan with respect to such beneVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 fits) shall be made available by the plan 

2 administrator (or the health insurance 

3 issuer offering such coverage) to any cur4 rent or potential participant, beneficiary, 

5 or contracting provider upon request. 

6 The reason for any denial under the plan 

7 (or coverage) of reimbursement or pay8 ment for services with respect to mental 

9 health and substance-related disorder 

10 benefits in the case of any participant or 

11 beneficiary shall, upon request, be made 

12 available by the plan administrator (or 

13 the health insurance issuer offering such 

14 coverage) to the participant or bene15 ficiary.’’. 

16 (d) MINIMUM BENEFIT REQUIREMENTS.—

17 Subsection (a) of such section is further 

18 amended by adding at the end the following 

19 new paragraph: 

20 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND

21 EQUITY IN OUT-OF-NETWORK BENEFITS.—

22 ‘‘(A) MINIMUM SCOPE OF MENTAL

23 HEALTH AND SUBSTANCE-RELATED DIS24 ORDER BENEFITS.—In the case of a 

25 group health plan (or health insurVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 ance coverage offered in connection 

2 with such a plan) that provides any 

3 mental health and substance-related 

4 disorder benefits, the plan or cov5 erage shall include benefits for any 

6 mental health condition or substance7 related disorder for which benefits 

8 are provided under the benefit plan 

9 option offered under chapter 89 of 

10 title 5, United States Code, with the 

11 highest average enrollment as of the 

12 beginning of the most recent year be13 ginning on or before the beginning of 

14 the plan year involved. 

15 ‘‘(B) EQUITY IN COVERAGE OF OUT16 OF-NETWORK BENEFITS.—

17 ‘‘(i) IN GENERAL.—In the case 

18 of a plan or coverage that pro19 vides both medical and surgical 

20 benefits and mental health and 

21 substance-related disorder bene22 fits, if medical and surgical bene23 fits are provided for substantially 

24 all items and services in a cat25 egory specified in clause (ii) furVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 nished outside any network of 

2 providers established or recog3 nized under such plan or cov4 erage, the mental health and sub5 stance-related disorder benefits 

6 shall also be provided for items 

7 and services in such category fur8 nished outside any network of 

9 providers established or recog10 nized under such plan or cov11 erage in accordance with the re12 quirements of this section. 

13 ‘‘(ii) CATEGORIES OF ITEMS AND

14 SERVICES.—For purposes of clause 

15 (i), there shall be the following 

16 three categories of items and 

17 services for benefits, whether 

18 medical and surgical benefits or 

19 mental health and substance-re20 lated disorder benefits, and all 

21 medical and surgical benefits and 

22 all mental health and substance23 related disorder benefits shall be 

24 classified into one of the fol25 lowing categories: 


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1 ‘‘(I) EMERGENCY.—Items 

2 and services, whether fur3 nished on an inpatient or out4 patient basis, required for the 

5 treatment of an emergency 

6 medical condition (including 

7 an emergency condition relat8 ing to mental health and sub9 stance-related disorders). 

10 ‘‘(II) INPATIENT.—Items 

11 and services not described in 

12 subclause (I) furnished on an 

13 inpatient basis. 

14 ‘‘(III) OUTPATIENT.—Items 

15 and services not described in 

16 subclause (I) furnished on an 

17 outpatient basis.’’. 

18 (e) REVISION OF INCREASED COST EXEMP19 TION.—Paragraph (2) of subsection (c) of such 

20 section is amended to read as follows: 

21 ‘‘(2) INCREASED COST EXEMPTION.—

22 ‘‘(A) IN GENERAL.—With respect to 

23 a group health plan (or health insur24 ance coverage offered in connection 

25 with such a plan), if the application 


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1 of this section to such plan (or cov2 erage) results in an increase for the 

3 plan year involved of the actual total 

4 costs of coverage with respect to med5 ical and surgical benefits and mental 

6 health and substance-related disorder 

7 benefits under the plan (as deter8 mined and certified under subpara9 graph (C)) by an amount that exceeds 

10 the applicable percentage described 

11 in subparagraph (B) of the actual 

12 total plan costs, the provisions of this 

13 section shall not apply to such plan 

14 (or coverage) during the following 

15 plan year, and such exemption shall 

16 apply to the plan (or coverage) for 1 

17 plan year. 

18 ‘‘(B) APPLICABLE PERCENTAGE.—

19 With respect to a plan (or coverage), 

20 the applicable percentage described 

21 in this paragraph shall be—

22 ‘‘(i) 2 percent in the case of 

23 the first plan year which begins 

24 after the date of the enactment of 

25 the Paul Wellstone Mental Health 


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1 and Addiction Equity Act of 2007; 

2 and 

3 ‘‘(ii) 1 percent in the case of 

4 each subsequent plan year. 

5 ‘‘(C) DETERMINATIONS BY ACTU6 ARIES.—Determinations as to in7 creases in actual costs under a plan 

8 (or coverage) for purposes of this sub9 section shall be made by a qualified 

10 actuary who is a member in good 

11 standing of the American Academy of 

12 Actuaries. Such determinations shall 

13 be certified by the actuary and be 

14 made available to the general public. 

15 ‘‘(D) 6-MONTH DETERMINATIONS.—If 

16 a group health plan (or a health in17 surance issuer offering coverage in 

18 connection with such a plan) seeks an 

19 exemption under this paragraph, de20 terminations under subparagraph (A) 

21 shall be made after such plan (or cov22 erage) has complied with this section 

23 for the first 6 months of the plan year 

24 involved. 


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1 ‘‘(E) NOTIFICATION.—An election to 

2 modify coverage of mental health and 

3 substance-related disorder benefits as 

4 permitted under this paragraph shall 

5 be treated as a material modification 

6 in the terms of the plan as described 

7 in section 102(a)(1) and shall be sub8 ject to the applicable notice require9 ments under section 104(b)(1).’’. 

10 (f) CHANGE IN EXCLUSION FOR SMALLEST EM11 PLOYERS.—Subsection (c)(1)(B) of such section 

12 is amended—

13 (1) by inserting ‘‘(or 1 in the case of 

14 an employer residing in a State that per15 mits small groups to include a single indi16 vidual)’’ after ‘‘at least 2’’ the first place it 

17 appears; and 

18 (2) by striking ‘‘and who employs at 

19 least 2 employees on the first day of the 

20 plan year’’. 

21 (g) ELIMINATION OF SUNSET PROVISION.—

22 Such section is amended by striking out sub23 section (f). 

24 (h) CLARIFICATION REGARDING PREEMP25 TION.—Such section is further amended by inVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 serting after subsection (e) the following new 

2 subsection: 

3 ‘‘(f) PREEMPTION, RELATION TO STATE

4 LAWS.—

5 ‘‘(1) IN GENERAL.—Nothing in this sec6 tion shall be construed to preempt any 

7 State law that provides greater consumer 

8 protections, benefits, methods of access 

9 to benefits, rights or remedies that are 

10 greater than the protections, benefits, 

11 methods of access to benefits, rights or 

12 remedies provided under this section. 

13 ‘‘(2) ERISA.—Nothing in this section 

14 shall be construed to affect or modify the 

15 provisions of section 514 with respect to 

16 group health plans.’’. 

17 (i) CONFORMING AMENDMENTS TO HEAD18 ING.—

19 (1) IN GENERAL.—The heading of such 

20 section is amended to read as follows: 

21 ‘‘SEC. 712.’’. 

22 (2) CLERICAL AMENDMENT.—The table 

23 of contents in section 1 of such Act is 

24 amended by striking the item relating to 


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1 section 712 and inserting the following 

2 new item: 

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

3 (j) EFFECTIVE DATE.—The amendments 

4 made by this section shall apply with respect 

5 to plan years beginning on or after January 

6 1, 2008. 

7 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE 

8 ACT RELATING TO THE GROUP MARKET. 

9 (a) EXTENSION OF PARITY TO TREATMENT

10 LIMITS AND BENEFICIARY FINANCIAL REQUIRE11 MENTS.—Section 2705 of the Public Health 

12 Service Act (42 U.S.C. 300gg–5) is amended—

13 (1) in subsection (a), by adding at the 

14 end the following new paragraphs: 

15 ‘‘(3) TREATMENT LIMITS.—

16 ‘‘(A) NO TREATMENT LIMIT.—If the 

17 plan or coverage does not include a 

18 treatment limit (as defined in sub19 paragraph (D)) on substantially all 

20 medical and surgical benefits in any 

21 category of items or services (speci22 fied in subparagraph (C)), the plan or 

23 coverage may not impose any treat24 ment limit on mental health and subVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6202 E:\BILLS\H1424.RH H1424

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1 stance-related disorder benefits that 

2 are classified in the same category of 

3 items or services. 

4 ‘‘(B) TREATMENT LIMIT.—If the plan 

5 or coverage includes a treatment 

6 limit on substantially all medical and 

7 surgical benefits in any category of 

8 items or services, the plan or cov9 erage may not impose such a treat10 ment limit on mental health and sub11 stance-related disorder benefits for 

12 items and services within such cat13 egory that are more restrictive than 

14 the predominant treatment limit that 

15 is applicable to medical and surgical 

16 benefits for items and services within 

17 such category. 

18 ‘‘(C) CATEGORIES OF ITEMS AND

19 SERVICES FOR APPLICATION OF TREAT20 MENT LIMITS AND BENEFICIARY FINAN21 CIAL REQUIREMENTS.—For purposes of 

22 this paragraph and paragraph (4), 

23 there shall be the following four cat24 egories of items and services for ben25 efits, whether medical and surgical 


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1 benefits or mental health and sub2 stance-related disorder benefits, and 

3 all medical and surgical benefits and 

4 all mental health and substance re5 lated benefits shall be classified into 

6 one of the following categories: 

7 ‘‘(i) INPATIENT, IN-NETWORK.—

8 Items and services furnished on 

9 an inpatient basis and within a 

10 network of providers established 

11 or recognized under such plan or 

12 coverage. 

13 ‘‘(ii) INPATIENT, OUT-OF-NET14 WORK.—Items and services fur15 nished on an inpatient basis and 

16 outside any network of providers 

17 established or recognized under 

18 such plan or coverage. 

19 ‘‘(iii) OUTPATIENT, IN-NET20 WORK.—Items and services fur21 nished on an outpatient basis and 

22 within a network of providers es23 tablished or recognized under 

24 such plan or coverage. 


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1 ‘‘(iv) OUTPATIENT, OUT-OF-NET2 WORK.—Items and services fur3 nished on an outpatient basis and 

4 outside any network of providers 

5 established or recognized under 

6 such plan or coverage. 

7 ‘‘(D) TREATMENT LIMIT DEFINED.—

8 For purposes of this paragraph, the 

9 term ‘treatment limit’ means, with re10 spect to a plan or coverage, limitation 

11 on the frequency of treatment, num12 ber of visits or days of coverage, or 

13 other similar limit on the duration or 

14 scope of treatment under the plan or 

15 coverage. 

16 ‘‘(E) PREDOMINANCE.—For pur17 poses of this subsection, a treatment 

18 limit or financial requirement with 

19 respect to a category of items and 

20 services is considered to be predomi21 nant if it is the most common or fre22 quent of such type of limit or require23 ment with respect to such category of 

24 items and services. 


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1 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE2 MENTS.—

3 ‘‘(A) NO BENEFICIARY FINANCIAL RE4 QUIREMENT.—If the plan or coverage 

5 does not include a beneficiary finan6 cial requirement (as defined in sub7 paragraph (C)) on substantially all 

8 medical and surgical benefits within 

9 a category of items and services 

10 (specified in paragraph (3)(C)), the 

11 plan or coverage may not impose 

12 such a beneficiary financial require13 ment on mental health and sub14 stance-related disorder benefits for 

15 items and services within such cat16 egory. 

17 ‘‘(B) BENEFICIARY FINANCIAL RE18 QUIREMENT.—

19 ‘‘(i) TREATMENT OF

20 DEDUCTIBLES, OUT-OF-POCKET LIM21 ITS, AND SIMILAR FINANCIAL RE22 QUIREMENTS.—If the plan or cov23 erage includes a deductible, a lim24 itation on out-of-pocket expenses, 

25 or similar beneficiary financial 


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1 requirement that does not apply 

2 separately to individual items and 

3 services on substantially all med4 ical and surgical benefits within a 

5 category of items and services, 

6 the plan or coverage shall apply 

7 such requirement (or, if there is 

8 more than one such requirement 

9 for such category of items and 

10 services, the predominant re11 quirement for such category) both 

12 to medical and surgical benefits 

13 within such category and to men14 tal health and substance-related 

15 disorder benefits within such cat16 egory and shall not distinguish in 

17 the application of such require18 ment between such medical and 

19 surgical benefits and such mental 

20 health and substance-related dis21 order benefits. 

22 ‘‘(ii) OTHER FINANCIAL REQUIRE23 MENTS.—If the plan or coverage 

24 includes a beneficiary financial 

25 requirement not described in 


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1 clause (i) on substantially all med2 ical and surgical benefits within a 

3 category of items and services, 

4 the plan or coverage may not im5 pose such financial requirement 

6 on mental health and substance7 related disorder benefits for items 

8 and services within such category 

9 in a way that is more costly to the 

10 participant or beneficiary than 

11 the predominant beneficiary fi12 nancial requirement applicable to 

13 medical and surgical benefits for 

14 items and services within such 

15 category. 

16 ‘‘(C) BENEFICIARY FINANCIAL RE17 QUIREMENT DEFINED.—For purposes of 

18 this paragraph, the term ‘beneficiary 

19 financial requirement’ includes, with 

20 respect to a plan or coverage, any de21 ductible, coinsurance, co-payment, 

22 other cost sharing, and limitation on 

23 the total amount that may be paid by 

24 a participant or beneficiary with re25 spect to benefits under the plan or 


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1 coverage, but does not include the ap2 plication of any aggregate lifetime 

3 limit or annual limit.’’; and 

4 (2) in subsection (b)—

5 (A) by striking ‘‘construed—’’ and 

6 all that follows through ‘‘(1) as requir7 ing’’ and inserting ‘‘construed as re8 quiring’’; 

9 (B) by striking ‘‘; or’’ and insert10 ing a period; and 

11 (C) by striking paragraph (2). 

12 (b) EXPANSION TO SUBSTANCE-RELATED DIS13 ORDER BENEFITS AND REVISION OF DEFINI14 TION.—Such section is further amended—

15 (1) by striking ‘‘mental health bene16 fits’’ and inserting ‘‘mental health and 

17 substance-related disorder benefits’’ each 

18 place it appears; and 

19 (2) in paragraph (4) of subsection 

20 (e)—

21 (A) by striking ‘‘MENTAL HEALTH

22 BENEFITS’’ and inserting ‘‘MENTAL

23 HEALTH AND SUBSTANCE-RELATED DIS24 ORDER BENEFITS’’; 


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1 (B) by striking ‘‘benefits with re2 spect to mental health services’’ and 

3 inserting ‘‘benefits with respect to 

4 services for mental health conditions 

5 or substance-related disorders’’; and 

6 (C) by striking ‘‘, but does not in7 clude benefits with respect to treat8 ment of substances abuse or chemical 

9 dependency’’. 

10 (c) AVAILABILITY OF PLAN INFORMATION

11 ABOUT CRITERIA FOR MEDICAL NECESSITY.—

12 Subsection (a) of such section, as amended by 

13 subsection (a)(1), is further amended by add14 ing at the end the following new paragraph: 

15 ‘‘(5) AVAILABILITY OF PLAN INFORMA16 TION.—The criteria for medical necessity 

17 determinations made under the plan with 

18 respect to mental health and substance19 related disorder benefits (or the health 

20 insurance coverage offered in connection 

21 with the plan with respect to such bene22 fits) shall be made available by the plan 

23 administrator (or the health insurance 

24 issuer offering such coverage) to any cur25 rent or potential participant, beneficiary, 


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1 or contracting provider upon request. 

2 The reason for any denial under the plan 

3 (or coverage) of reimbursement or pay4 ment for services with respect to mental 

5 health and substance-related disorder 

6 benefits in the case of any participant or 

7 beneficiary shall, upon request, be made 

8 available by the plan administrator (or 

9 the health insurance issuer offering such 

10 coverage) to the participant or bene11 ficiary.’’. 

12 (d) MINIMUM BENEFIT REQUIREMENTS.—

13 Subsection (a) of such section is further 

14 amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND

17 EQUITY IN OUT-OF-NETWORK BENEFITS.—

18 ‘‘(A) MINIMUM SCOPE OF MENTAL

19 HEALTH AND SUBSTANCE-RELATED DIS20 ORDER BENEFITS.—In the case of a 

21 group health plan (or health insur22 ance coverage offered in connection 

23 with such a plan) that provides any 

24 mental health and substance-related 

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1 erage shall include benefits for any 

2 mental health condition or substance3 related disorder for which benefits 

4 are provided under the benefit plan 

5 option offered under chapter 89 of 

6 title 5, United States Code, with the 

7 highest average enrollment as of the 

8 beginning of the most recent year be9 ginning on or before the beginning of 

10 the plan year involved. 

11 ‘‘(B) EQUITY IN COVERAGE OF OUT12 OF-NETWORK BENEFITS.—

13 ‘‘(i) IN GENERAL.—In the case 

14 of a plan or coverage that pro15 vides both medical and surgical 

16 benefits and mental health and 

17 substance-related disorder bene18 fits, if medical and surgical bene19 fits are provided for substantially 

20 all items and services in a cat21 egory specified in clause (ii) fur22 nished outside any network of 

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1 stance-related disorder benefits 

2 shall also be provided for items 

3 and services in such category fur4 nished outside any network of 

5 providers established or recog6 nized under such plan or cov7 erage in accordance with the re8 quirements of this section. 

9 ‘‘(ii) CATEGORIES OF ITEMS AND

10 SERVICES.—For purposes of clause 

11 (i), there shall be the following 

12 three categories of items and 

13 services for benefits, whether 

14 medical and surgical benefits or 

15 mental health and substance-re16 lated disorder benefits, and all 

17 medical and surgical benefits and 

18 all mental health and substance19 related disorder benefits shall be 

20 classified into one of the fol21 lowing categories: 

22 ‘‘(I) EMERGENCY.—Items 

23 and services, whether fur24 nished on an inpatient or out25 patient basis, required for the 


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1 treatment of an emergency 

2 medical condition (including 

3 an emergency condition relat4 ing to mental health and sub5 stance-related disorders). 

6 ‘‘(II) INPATIENT.—Items 

7 and services not described in 

8 subclause (I) furnished on an 

9 inpatient basis. 

10 ‘‘(III) OUTPATIENT.—Items 

11 and services not described in 

12 subclause (I) furnished on an 

13 outpatient basis.’’. 

14 (e) REVISION OF INCREASED COST EXEMP15 TION.—Paragraph (2) of subsection (c) of such 

16 section is amended to read as follows: 

17 ‘‘(2) INCREASED COST EXEMPTION.—

18 ‘‘(A) IN GENERAL.—With respect to 

19 a group health plan (or health insur20 ance coverage offered in connection 

21 with such a plan), if the application 

22 of this section to such plan (or cov23 erage) results in an increase for the 

24 plan year involved of the actual total 

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1 ical and surgical benefits and mental 

2 health and substance-related disorder 

3 benefits under the plan (as deter4 mined and certified under subpara5 graph (C)) by an amount that exceeds 

6 the applicable percentage described 

7 in subparagraph (B) of the actual 

8 total plan costs, the provisions of this 

9 section shall not apply to such plan 

10 (or coverage) during the following 

11 plan year, and such exemption shall 

12 apply to the plan (or coverage) for 1 

13 plan year. 

14 ‘‘(B) APPLICABLE PERCENTAGE.—

15 With respect to a plan (or coverage), 

16 the applicable percentage described 

17 in this paragraph shall be—

18 ‘‘(i) 2 percent in the case of 

19 the first plan year which begins 

20 after the date of the enactment of 

21 the Paul Wellstone Mental Health 

22 and Addiction Equity Act of 2007; 

23 and 

24 ‘‘(ii) 1 percent in the case of 

25 each subsequent plan year. 


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1 ‘‘(C) DETERMINATIONS BY ACTU2 ARIES.—Determinations as to in3 creases in actual costs under a plan 

4 (or coverage) for purposes of this sub5 section shall be made by a qualified 

6 actuary who is a member in good 

7 standing of the American Academy of 

8 Actuaries. Such determinations shall 

9 be certified by the actuary and be 

10 made available to the general public. 

11 ‘‘(D) 6-MONTH DETERMINATIONS.—If 

12 a group health plan (or a health in13 surance issuer offering coverage in 

14 connection with such a plan) seeks an 

15 exemption under this paragraph, de16 terminations under subparagraph (A) 

17 shall be made after such plan (or cov18 erage) has complied with this section 

19 for the first 6 months of the plan year 

20 involved. 

21 ‘‘(E) NOTIFICATION.—A group 

22 health plan under this part shall com23 ply with the notice requirement 

24 under section 712(c)(2)(E) of the Em25 ployee Retirement Income Security 


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1 Act of 1974 with respect to the a 

2 modification of mental health and 

3 substance-related disorder benefits as 

4 permitted under this paragraph as if 

5 such section applied to such plan.’’. 

6 (f) CHANGE IN EXCLUSION FOR SMALLEST EM7 PLOYERS.—Subsection (c)(1)(B) of such section 

8 is amended—

9 (1) by inserting ‘‘(or 1 in the case of 

10 an employer residing in a State that per11 mits small groups to include a single indi12 vidual)’’ after ‘‘at least 2’’ the first place it 

13 appears; and 

14 (2) by striking ‘‘and who employs at 

15 least 2 employees on the first day of the 

16 plan year’’. 

17 (g) ELIMINATION OF SUNSET PROVISION.—

18 Such section is amended by striking out sub19 section (f). 

20 (h) CLARIFICATION REGARDING PREEMP21 TION.—Such section is further amended by in22 serting after subsection (e) the following new 

23 subsection: 

24 ‘‘(f) PREEMPTION, RELATION TO STATE

25 LAWS.—


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1 ‘‘(1) IN GENERAL.—Nothing in this sec2 tion shall be construed to preempt any 

3 State law that provides greater consumer 

4 protections, benefits, methods of access 

5 to benefits, rights or remedies that are 

6 greater than the protections, benefits, 

7 methods of access to benefits, rights or 

8 remedies provided under this section. 

9 ‘‘(2) CONSTRUCTION.—Nothing in this 

10 section shall be construed to affect or 

11 modify the provisions of section 2723 

12 with respect to group health plans.’’. 

13 (i) CONFORMING AMENDMENT TO HEADING.—

14 The heading of such section is amended to 

15 read as follows: 

16 ‘‘SEC. 2705.’’. 

17 (j) EFFECTIVE DATE.—The amendments 

18 made by this section shall apply with respect 

19 to plan years beginning on or after January 

20 1, 2008. 

21 SEC. 4. AMENDMENTS TO THE INTERNAL REVENUE CODE 

22 OF 1986. 

23 (a) EXTENSION OF PARITY TO TREATMENT

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1 MENTS.—Section 9812 of the Internal Revenue 

2 Code of 1986 is amended—

3 (1) in subsection (a), by adding at the 

4 end the following new paragraphs: 

5 ‘‘(3) TREATMENT LIMITS.—In the case of 

6 a group health plan that provides both 

7 medical and surgical benefits and mental 

8 health or substance-related disorder ben9 efits—

10 ‘‘(A) NO TREATMENT LIMIT.—If the 

11 plan does not include a treatment 

12 limit (as defined in subparagraph (D)) 

13 on substantially all medical and sur14 gical benefits in any category of items 

15 or services (specified in subpara16 graph (C)), the plan may not impose 

17 any treatment limit on mental health 

18 or substance-related disorder benefits 

19 that are classified in the same cat20 egory of items or services. 

21 ‘‘(B) TREATMENT LIMIT.—If the plan 

22 includes a treatment limit on sub23 stantially all medical and surgical 

24 benefits in any category of items or 

25 services, the plan may not impose 


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1 such a treatment limit on mental 

2 health or substance-related disorder 

3 benefits for items and services within 

4 such category that is more restrictive 

5 than the predominant treatment limit 

6 that is applicable to medical and sur7 gical benefits for items and services 

8 within such category. 

9 ‘‘(C) CATEGORIES OF ITEMS AND

10 SERVICES FOR APPLICATION OF TREAT11 MENT LIMITS AND BENEFICIARY FINAN12 CIAL REQUIREMENTS.—For purposes of 

13 this paragraph and paragraph (4), 

14 there shall be the following five cat15 egories of items and services for ben16 efits, whether medical and surgical 

17 benefits or mental health and sub18 stance-related disorder benefits, and 

19 all medical and surgical benefits and 

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

22 one of the following categories: 

23 ‘‘(i) INPATIENT, IN-NETWORK.—

24 Items and services not described 

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1 patient basis and within a net2 work of providers established or 

3 recognized under such plan. 

4 ‘‘(ii) INPATIENT, OUT-OF-NET5 WORK.—Items and services not de6 scribed in clause (v) furnished on 

7 an inpatient basis and outside 

8 any network of providers estab9 lished or recognized under such 

10 plan. 

11 ‘‘(iii) OUTPATIENT, IN-NET12 WORK.—Items and services not de13 scribed in clause (v) furnished on 

14 an outpatient basis and within a 

15 network of providers established 

16 or recognized under such plan. 

17 ‘‘(iv) OUTPATIENT, OUT-OF-NET18 WORK.—Items and services not de19 scribed in clause (v) furnished on 

20 an outpatient basis and outside 

21 any network of providers estab22 lished or recognized under such 

23 plan. 

24 ‘‘(v) EMERGENCY CARE.—Items 

25 and services, whether furnished 


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1 on an inpatient or outpatient 

2 basis or within or outside any 

3 network of providers, required 

4 for the treatment of an emer5 gency medical condition (includ6 ing an emergency condition relat7 ing to mental health or substance8 related disorders). 

9 ‘‘(D) TREATMENT LIMIT DEFINED.—

10 For purposes of this paragraph, the 

11 term ‘treatment limit’ means, with re12 spect to a plan, limitation on the fre13 quency of treatment, number of visits 

14 or days of coverage, or other similar 

15 limit on the duration or scope of 

16 treatment under the plan. 

17 ‘‘(E) PREDOMINANCE.—For pur18 poses of this subsection, a treatment 

19 limit or financial requirement with 

20 respect to a category of items and 

21 services is considered to be predomi22 nant if it is the most common or fre23 quent of such type of limit or require24 ment with respect to such category of 

25 items and services. 


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1 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE2 MENTS.—In the case of a group health 

3 plan that provides both medical and sur4 gical benefits and mental health or sub5 stance-related disorder benefits—

6 ‘‘(A) NO BENEFICIARY FINANCIAL RE7 QUIREMENT.—If the plan does not in8 clude a beneficiary financial require9 ment (as defined in subparagraph 

10 (C)) on substantially all medical and 

11 surgical benefits within a category of 

12 items and services (specified in para13 graph (3)(C)), the plan may not im14 pose such a beneficiary financial re15 quirement on mental health or sub16 stance-related disorder benefits for 

17 items and services within such cat18 egory. 

19 ‘‘(B) BENEFICIARY FINANCIAL RE20 QUIREMENT.—

21 ‘‘(i) TREATMENT OF

22 DEDUCTIBLES, OUT-OF-POCKET LIM23 ITS, AND SIMILAR FINANCIAL RE24 QUIREMENTS.—If the plan includes 

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1 of-pocket expenses, or similar 

2 beneficiary financial requirement 

3 that does not apply separately to 

4 individual items and services on 

5 substantially all medical and sur6 gical benefits within a category of 

7 items and services, the plan shall 

8 apply such requirement (or, if 

9 there is more than one such re10 quirement for such category of 

11 items and services, the predomi12 nant requirement for such cat13 egory) both to medical and sur14 gical benefits within such cat15 egory and to mental health and 

16 substance-related disorder bene17 fits within such category and 

18 shall not distinguish in the appli19 cation of such requirement be20 tween such medical and surgical 

21 benefits and such mental health 

22 and substance-related disorder 

23 benefits. 

24 ‘‘(ii) OTHER FINANCIAL REQUIRE25 MENTS.—If the plan includes a 


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1 beneficiary financial requirement 

2 not described in clause (i) on sub3 stantially all medical and surgical 

4 benefits within a category of 

5 items and services, the plan may 

6 not impose such financial re7 quirement on mental health or 

8 substance-related disorder bene9 fits for items and services within 

10 such category in a way that re11 sults in greater out-of-pocket ex12 penses to the participant or bene13 ficiary than the predominant ben14 eficiary financial requirement ap15 plicable to medical and surgical 

16 benefits for items and services 

17 within such category. 

18 ‘‘(iii) CONSTRUCTION.—Nothing 

19 in this subparagraph shall be con20 strued as prohibiting the plan 

21 from waiving the application of 

22 any deductible for mental health 

23 benefits or substance-related dis24 order benefits or both. 


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1 ‘‘(C) BENEFICIARY FINANCIAL RE2 QUIREMENT DEFINED.—For purposes of 

3 this paragraph, the term ‘beneficiary 

4 financial requirement’ includes, with 

5 respect to a plan, any deductible, co6 insurance, co-payment, other cost 

7 sharing, and limitation on the total 

8 amount that may be paid by a partici9 pant or beneficiary with respect to 

10 benefits under the plan, but does not 

11 include the application of any aggre12 gate lifetime limit or annual limit.’’

, 

13 and 

14 (2) in subsection (b)—

15 (A) by striking ‘‘construed—’’ and 

16 all that follows through ‘‘(1) as requir17 ing’’ and inserting ‘‘construed as re18 quiring’’

, 

19 (B) by striking ‘‘; or’’ and insert20 ing a period, and 

21 (C) by striking paragraph (2). 

22 (b) EXPANSION TO SUBSTANCE-RELATED DIS23 ORDER BENEFITS AND REVISION OF DEFINI24 TION.—Section 9812 of such Code is further 

25 amended—


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1 (1) by striking ‘‘mental health bene2 fits’’ each place it appears (other than in 

3 any provision amended by paragraph (2)) 

4 and inserting ‘‘mental health or sub5 stance-related disorder benefits’’

, 

6 (2) by striking ‘‘mental health bene7 fits’’ each place it appears in subsections 

8 (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and 

9 (a)(2)(C) and inserting ‘‘mental health 

10 and substance-related disorder benefits’’, 

11 and 

12 (3) in subsection (e), by striking para13 graph (4) and inserting the following new 

14 paragraphs: 

15 ‘‘(4) MENTAL HEALTH BENEFITS.—The 

16 term ‘mental health benefits’ means bene17 fits with respect to services for mental 

18 health conditions, as defined under the 

19 terms of the plan, but does not include 

20 substance-related disorder benefits. 

21 ‘‘(5) SUBSTANCE-RELATED DISORDER

22 BENEFITS.—The term ‘substance-related 

23 disorder benefits’ means benefits with re24 spect to services for substance-related 


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1 disorders, as defined under the terms of 

2 the plan.’’. 

3 (c) AVAILABILITY OF PLAN INFORMATION

4 ABOUT CRITERIA FOR MEDICAL NECESSITY.—

5 Subsection (a) of section 9812 of such Code, as 

6 amended by subsection (a)(1), is further 

7 amended by adding at the end the following 

8 new paragraph: 

9 ‘‘(5) AVAILABILITY OF PLAN INFORMA10 TION.—The criteria for medical necessity 

11 determinations made under the plan with 

12 respect to mental health and substance13 related disorder benefits shall be made 

14 available by the plan administrator to 

15 any current or potential participant, ben16 eficiary, or contracting provider upon re17 quest. The reason for any denial under 

18 the plan of reimbursement or payment 

19 for services with respect to mental health 

20 and substance-related disorder benefits 

21 in the case of any participant or bene22 ficiary shall, upon request, be made avail23 able by the plan administrator to the par24 ticipant or beneficiary.’’. 


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1 (d) MINIMUM BENEFIT REQUIREMENTS.—

2 Subsection (a) of section 9812 of such Code is 

3 further amended by adding at the end the fol4 lowing new paragraph: 

5 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND

6 EQUITY IN OUT-OF-NETWORK BENEFITS.—

7 ‘‘(A) MINIMUM SCOPE OF MENTAL

8 HEALTH AND SUBSTANCE-RELATED DIS9 ORDER BENEFITS.—In the case of a 

10 group health plan that provides any 

11 mental health or substance-related 

12 disorder benefits, the plan shall in13 clude benefits for any mental health 

14 condition or substance-related dis15 order included in the most recent edi16 tion of the Diagnostic and Statistical 

17 Manual of Mental Disorders pub18 lished by the American Psychiatric 

19 Association. 

20 ‘‘(B) EQUITY IN COVERAGE OF OUT21 OF-NETWORK BENEFITS.—

22 ‘‘(i) IN GENERAL.—In the case 

23 of a group health plan that pro24 vides both medical and surgical 

25 benefits and mental health or 


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1 substance-related disorder bene2 fits, if medical and surgical bene3 fits are provided for substantially 

4 all items and services in a cat5 egory specified in clause (ii) fur6 nished outside any network of 

7 providers established or recog8 nized under such plan, the mental 

9 health and substance-related dis10 order benefits shall also be pro11 vided for items and services in 

12 such category furnished outside 

13 any network of providers estab14 lished or recognized under such 

15 plan in accordance with the re16 quirements of this section. 

17 ‘‘(ii) CATEGORIES OF ITEMS AND

18 SERVICES.—For purposes of clause 

19 (i), there shall be the following 

20 three categories of items and 

21 services for benefits, whether 

22 medical and surgical benefits or 

23 mental health and substance-re24 lated disorder benefits, and all 

25 medical and surgical benefits and 


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1 all mental health and substance2 related disorder benefits shall be 

3 classified into one of the fol4 lowing categories: 

5 ‘‘(I) EMERGENCY.—Items 

6 and services, whether fur7 nished on an inpatient or out8 patient basis, required for the 

9 treatment of an emergency 

10 medical condition (including 

11 an emergency condition relat12 ing to mental health or sub13 stance-related disorders). 

14 ‘‘(II) INPATIENT.—Items 

15 and services not described in 

16 subclause (I) furnished on an 

17 inpatient basis. 

18 ‘‘(III) OUTPATIENT.—Items 

19 and services not described in 

20 subclause (I) furnished on an 

21 outpatient basis.’’. 

22 (e) REVISION OF INCREASED COST EXEMP23 TION.—Paragraph (2) of section 9812(c) of such 

24 Code is amended to read as follows: 

25 ‘‘(2) INCREASED COST EXEMPTION.—


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1 ‘‘(A) IN GENERAL.—With respect to 

2 a group health plan, if the application 

3 of this section to such plan results in 

4 an increase for the plan year involved 

5 of the actual total costs of coverage 

6 with respect to medical and surgical 

7 benefits and mental health and sub8 stance-related disorder benefits 

9 under the plan (as determined and 

10 certified under subparagraph (C)) by 

11 an amount that exceeds the applica12 ble percentage described in subpara13 graph (B) of the actual total plan 

14 costs, the provisions of this section 

15 shall not apply to such plan during 

16 the following plan year, and such ex17 emption shall apply to the plan for 1 

18 plan year. 

19 ‘‘(B) APPLICABLE PERCENTAGE.—

20 With respect to a plan, the applicable 

21 percentage described in this para22 graph shall be—

23 ‘‘(i) 2 percent in the case of 

24 the first plan year to which this 

25 paragraph applies, and 


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1 ‘‘(ii) 1 percent in the case of 

2 each subsequent plan year. 

3 ‘‘(C) DETERMINATIONS BY ACTU4 ARIES.—Determinations as to in5 creases in actual costs under a plan 

6 for purposes of this subsection shall 

7 be made by a qualified and licensed 

8 actuary who is a member in good 

9 standing of the American Academy of 

10 Actuaries. Such determinations shall 

11 be certified by the actuary and be 

12 made available to the general public. 

13 ‘‘(D) 6-MONTH DETERMINATIONS.—If 

14 a group health plan seeks an exemp15 tion under this paragraph, deter16 minations under subparagraph (A) 

17 shall be made after such plan has 

18 complied with this section for the 

19 first 6 months of the plan year in20 volved.’’. 

21 (f) CHANGE IN EXCLUSION FOR SMALLEST EM22 PLOYERS.—Paragraph (1) of section 9812(c) of 

23 such Code is amended to read as follows: 

24 ‘‘(1) SMALL EMPLOYER EXEMPTION.—


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1 ‘‘(A) IN GENERAL.—This section 

2 shall not apply to any group health 

3 plan for any plan year of a small em4 ployer. 

5 ‘‘(B) SMALL EMPLOYER.—For pur6 poses of subparagraph (A), the term 

7 ‘small employer’ means, with respect 

8 to a calendar year and a plan year, an 

9 employer who employed an average 

10 of at least 2 (or 1 in the case of an em11 ployer residing in a State that per12 mits small groups to include a single 

13 individual) but not more than 50 em14 ployees on business days during the 

15 preceding calendar year. For pur16 poses of the preceding sentence, all 

17 persons treated as a single employer 

18 under subsection (b), (c), (m), or (o) of 

19 section 414 shall be treated as 1 em20 ployer and rules similar to rules of 

21 subparagraphs (B) and (C) of section 

22 4980D(d)(2) shall apply.’’. 

23 (g) ELIMINATION OF SUNSET PROVISION.—

24 Section 9812 of such Code is amended by 

25 striking subsection (f). 


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1 (h) CONFORMING AMENDMENTS TO HEAD2 ING.—

3 (1) IN GENERAL.—The heading of sec4 tion 9812 of such Code is amended to 

5 read as follows: 

6 ‘‘SEC. 9812. EQUITY IN MENTAL HEALTH AND SUBSTANCE7 RELATED DISORDER BENEFITS.’’. 

8 (2) CLERICAL AMENDMENT.—The table 

9 of sections for subchapter B of chapter 

10 100 of such Code is amended by striking 

11 the item relating to section 9812 and in12 serting the following new item: 

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

13 (i) EFFECTIVE DATE.—

14 (1) IN GENERAL.—Except as otherwise 

15 provided in this subsection, the amend16 ments made by this section shall apply 

17 with respect to plan years beginning on 

18 or after January 1, 2008. 

19 (2) ELIMINATION OF SUNSET.—The 

20 amendment made by subsection (g) shall 

21 apply to benefits for services furnished 

22 after December 31, 2007. 

23 (3) SPECIAL RULE FOR COLLECTIVE BAR24 GAINING AGREEMENTS.—In the case of a 


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1 group health plan maintained pursuant 

2 to one or more collective bargaining 

3 agreements between employee represent4 atives and one or more employers ratified 

5 before the date of the enactment of this 

6 Act, the amendments made by this sec7 tion (other than subsection (g)) shall not 

8 apply to plan years beginning before the 

9 later of—

10 (A) the date on which the last of 

11 the collective bargaining agreements 

12 relating to the plan terminates (deter13 mined without regard to any exten14 sion thereof agreed to after the date 

15 of the enactment of this Act), or 

16 (B) January 1, 2010. 

17 For purposes of subparagraph (A), any 

18 plan amendment made pursuant to a col19 lective bargaining agreement relating to 

20 the plan which amends the plan solely to 

21 conform to any requirement imposed 

22 under an amendment under this section 

23 shall not be treated as a termination of 

24 such collective bargaining agreement. 


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1 SEC. 5. GOVERNMENT ACCOUNTABILITY OFFICE STUDIES 

2 AND REPORTS. 

3 (a) IMPLEMENTATION OF ACT.—

4 (1) STUDY.—The Comptroller General 

5 of the United States shall conduct a study 

6 that evaluates the effect of the implemen7 tation of the amendments made by this 

8 Act on—

9 (A) the cost of health insurance 

10 coverage; 

11 (B) access to health insurance 

12 coverage (including the availability of 

13 in-network providers); 

14 (C) the quality of health care; 

15 (D) Medicare, Medicaid, and State 

16 and local mental health and sub17 stance abuse treatment spending; 

18 (E) the number of individuals 

19 with private insurance who received 

20 publicly funded health care for men21 tal health and substance-related dis22 orders; 

23 (F) spending on public services, 

24 such as the criminal justice system, 

25 special education, and income assist26 ance programs; 


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1 (G) the use of medical manage2 ment of mental health and substance3 related disorder benefits and medical 

4 necessity determinations by group 

5 health plans (and health insurance 

6 issuers offering health insurance cov7 erage in connection with such plans) 

8 and timely access by participants and 

9 beneficiaries to clinically-indicated 

10 care for mental health and substance11 use disorders; and 

12 (H) other matters as determined 

13 appropriate by the Comptroller Gen14 eral. 

15 (2) REPORT.—Not later than 2 years 

16 after the date of enactment of this Act, 

17 the Comptroller General shall prepare 

18 and submit to the appropriate commit19 tees of the Congress a report containing 

20 the results of the study conducted under 

21 paragraph (1). 

22 (b) BIANNUAL REPORT ON OBSTACLES IN OB23 TAINING COVERAGE.—Every two years, the 

24 Comptroller General shall submit to each 

25 House of the Congress a report on obstacles 


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1 that individuals face in obtaining mental 

2 health and substance-related disorder care 

3 under their health plans. 

4 (c) UNIFORM PATIENT PLACEMENT CRI5 TERIA.—Not later than 18 months after the 

6 date of the enactment of this Act, the Comp7 troller General shall submit to each House of 

8 the Congress a report on availability of uni9 form patient placement criteria for mental 

10 health and substance-related disorders that 

11 could be used by group health plans and 

12 health insurance issuers to guide determina13 tions of medical necessity and the extent to 

14 which health plans utilize such critiera. If 

15 such criteria do not exist, the report shall in16 clude recommendations on a process for de17 veloping such criteria. 

18 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

20 the ‘‘Paul Wellstone Mental Health and Addic21 tion Equity Act of 2007’’. 

22 (b) TABLE OF CONTENTS.—The table of con23 tents of 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. 


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Sec. 4. Amendments to the Internal Revenue Code of 1986. 

Sec. 5. Government Accountability Office studies and reports. 

1 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN2 COME SECURITY ACT OF 1974. 

3 (a) EXTENSION OF PARITY TO TREATMENT

4 LIMITS AND BENEFICIARY FINANCIAL REQUIRE5 MENTS.—Section 712 of the Employee Retire6 ment Income Security Act of 1974 (29 U.S.C. 

7 1185a) is amended—

8 (1) in subsection (a), by adding at the 

9 end the following new paragraphs: 

10 ‘‘(3) TREATMENT LIMITS.—

11 ‘‘(A) NO TREATMENT LIMIT.—If the 

12 plan or coverage does not include a 

13 treatment limit (as defined in sub14 paragraph (D)) on substantially all 

15 medical and surgical benefits in any 

16 category of items or services, the plan 

17 or coverage may not impose any treat18 ment limit on mental health and sub19 stance-related disorder benefits that 

20 are classified in the same category of 

21 items or services. 

22 ‘‘(B) TREATMENT LIMIT.—If the plan 

23 or coverage includes a treatment limit 

24 on substantially all medical and surVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00106 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 gical benefits in any category of items 

2 or services, the plan or coverage may 

3 not impose such a treatment limit on 

4 mental health and substance-related 

5 disorder benefits for items and serv6 ices within such category that are 

7 more restrictive than the predominant 

8 treatment limit that is applicable to 

9 medical and surgical benefits for 

10 items and services within such cat11 egory. 

12 ‘‘(C) CATEGORIES OF ITEMS AND

13 SERVICES FOR APPLICATION OF TREAT14 MENT LIMITS AND BENEFICIARY FINAN15 CIAL REQUIREMENTS.—For purposes of 

16 this paragraph and paragraph (4), 

17 there shall be the following four cat18 egories of items and services for bene19 fits, whether medical and surgical 

20 benefits or mental health and sub21 stance-related disorder benefits, and 

22 all medical and surgical benefits and 

23 all mental health and substance re24 lated benefits shall be classified into 

25 one of the following categories: 


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1 ‘‘(i) INPATIENT, IN-NETWORK.—

2 Items and services furnished on 

3 an inpatient basis and within a 

4 network of providers established 

5 or recognized under such plan or 

6 coverage. 

7 ‘‘(ii) INPATIENT, OUT-OF-NET8 WORK.—Items and services fur9 nished on an inpatient basis and 

10 outside any network of providers 

11 established or recognized under 

12 such plan or coverage. 

13 ‘‘(iii) OUTPATIENT, IN-NET14 WORK.—Items and services fur15 nished on an outpatient basis and 

16 within a network of providers es17 tablished or recognized under 

18 such plan or coverage. 

19 ‘‘(iv) OUTPATIENT, OUT-OF-NET20 WORK.—Items and services fur21 nished on an outpatient basis and 

22 outside any network of providers 

23 established or recognized under 

24 such plan or coverage. 


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1 ‘‘(D) TREATMENT LIMIT DEFINED.—

2 For purposes of this paragraph, the 

3 term ‘treatment limit’ means, with re4 spect to a plan or coverage, limitation 

5 on the frequency of treatment, number 

6 of visits or days of coverage, or other 

7 similar limit on the duration or scope 

8 of treatment under the plan or cov9 erage. 

10 ‘‘(E) PREDOMINANCE.—For purposes 

11 of this subsection, a treatment limit or 

12 financial requirement with respect to 

13 a category of items and services is 

14 considered to be predominant if it is 

15 the most common or frequent of such 

16 type of limit or requirement with re17 spect to such category of items and 

18 services. 

19 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE20 MENTS.—

21 ‘‘(A) NO BENEFICIARY FINANCIAL RE22 QUIREMENT.—If the plan or coverage 

23 does not include a beneficiary finan24 cial requirement (as defined in sub25 paragraph (C)) on substantially all 


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1 medical and surgical benefits within 

2 a category of items and services (spec3 ified under paragraph (3)(C)), the 

4 plan or coverage may not impose such 

5 a beneficiary financial requirement 

6 on mental health and substance-re7 lated disorder benefits for items and 

8 services within such category. 

9 ‘‘(B) BENEFICIARY FINANCIAL RE10 QUIREMENT.—

11 ‘‘(i) TREATMENT OF

12 DEDUCTIBLES, OUT-OF-POCKET LIM13 ITS, AND SIMILAR FINANCIAL RE14 QUIREMENTS.—If the plan or cov15 erage includes a deductible, a lim16 itation on out-of-pocket expenses, 

17 or similar beneficiary financial 

18 requirement that does not apply 

19 separately to individual items and 

20 services on substantially all med21 ical and surgical benefits within a 

22 category of items and services (as 

23 specified in paragraph (3)(C)), the 

24 plan or coverage shall apply such 

25 requirement (or, if there is more 


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1 than one such requirement for 

2 such category of items and serv3 ices, the predominant requirement 

4 for such category) both to medical 

5 and surgical benefits within such 

6 category and to mental health and 

7 substance-related disorder bene8 fits within such category and 

9 shall not distinguish in the appli10 cation of such requirement be11 tween such medical and surgical 

12 benefits and such mental health 

13 and substance-related disorder 

14 benefits. 

15 ‘‘(ii) OTHER FINANCIAL REQUIRE16 MENTS.—If the plan or coverage in17 cludes a beneficiary financial re18 quirement not described in clause 

19 (i) on substantially all medical 

20 and surgical benefits within a cat21 egory of items and services, the 

22 plan or coverage may not impose 

23 such financial requirement on 

24 mental health and substance-re25 lated disorder benefits for items 


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1 and services within such category 

2 in a way that is more costly to the 

3 participant or beneficiary than 

4 the predominant beneficiary fi5 nancial requirement applicable to 

6 medical and surgical benefits for 

7 items and services within such 

8 category. 

9 ‘‘(C) BENEFICIARY FINANCIAL RE10 QUIREMENT DEFINED.—For purposes of 

11 this paragraph, the term ‘beneficiary 

12 financial requirement’ includes, with 

13 respect to a plan or coverage, any de14 ductible, coinsurance, co-payment, 

15 other cost sharing, and limitation on 

16 the total amount that may be paid by 

17 a participant or beneficiary with re18 spect to benefits under the plan or 

19 coverage, but does not include the ap20 plication of any aggregate lifetime 

21 limit or annual limit.’’; and 

22 (2) in subsection (b)—

23 (A) by striking ‘‘construed—’’ and 

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1 quiring’’ and inserting ‘‘construed as 

2 requiring’’; 

3 (B) by striking ‘‘; or’’ and inserting 

4 a period; and 

5 (C) by striking paragraph (2). 

6 (b) EXPANSION TO SUBSTANCE-RELATED DIS7 ORDER BENEFITS AND REVISION OF DEFINITION.—

8 Such section is further amended—

9 (1) by striking ‘‘mental health bene10 fits’’ and inserting ‘‘mental health and 

11 substance-related disorder benefits’’ each 

12 place it appears; and 

13 (2) in paragraph (4) of subsection 

14 (e)—

15 (A) by striking ‘‘MENTAL HEALTH

16 BENEFITS’’ and inserting ‘‘MENTAL

17 HEALTH AND SUBSTANCE-RELATED DIS18 ORDER BENEFITS’’; 

19 (B) by striking ‘‘benefits with re20 spect to mental health services’’ and 

21 inserting ‘‘benefits with respect to 

22 services for mental health conditions 

23 or substance-related disorders’’; and 

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1 ment of substances abuse or chemical 

2 dependency’’. 

3 (c) AVAILABILITY OF PLAN INFORMATION

4 ABOUT CRITERIA FOR MEDICAL NECESSITY.—Sub5 section (a) of such section, as amended by sub6 section (a)(1), is further amended by adding at 

7 the end the following new paragraph: 

8 ‘‘(5) AVAILABILITY OF PLAN INFORMA9 TION.—The criteria for medical necessity 

10 determinations made under the plan with 

11 respect to mental health and substance12 related disorder benefits (or the health in13 surance coverage offered in connection 

14 with the plan with respect to such bene15 fits) shall be made available by the plan 

16 administrator (or the health insurance 

17 issuer offering such coverage) to any cur18 rent or potential participant, beneficiary, 

19 or contracting provider upon request. The 

20 reason for any denial under the plan (or 

21 coverage) of reimbursement or payment 

22 for services with respect to mental health 

23 and substance-related disorder benefits in 

24 the case of any participant or beneficiary 

25 shall, upon request, be made available by 


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1 the plan administrator (or the health in2 surance issuer offering such coverage) to 

3 the participant or beneficiary.’’. 

4 (d) MINIMUM BENEFIT REQUIREMENTS.—Sub5 section (a) of such section is further amended 

6 by adding at the end the following new para7 graph: 

8 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND

9 EQUITY IN OUT-OF-NETWORK BENEFITS.—

10 ‘‘(A) MINIMUM SCOPE OF MENTAL

11 HEALTH AND SUBSTANCE-RELATED DIS12 ORDER BENEFITS.—In the case of a 

13 group health plan (or health insur14 ance coverage offered in connection 

15 with such a plan) that provides any 

16 mental health and substance-related 

17 disorder benefits, the plan or coverage 

18 shall include benefits for any mental 

19 health condition or substance-related 

20 disorder for which benefits are pro21 vided under the benefit plan option of22 fered under chapter 89 of title 5, 

23 United States Code, with the highest 

24 average enrollment as of the begin25 ning of the most recent year beginning 


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1 on or before the beginning of the plan 

2 year involved. 

3 ‘‘(B) EQUITY IN COVERAGE OF OUT4 OF-NETWORK BENEFITS.—

5 ‘‘(i) IN GENERAL.—In the case of 

6 a plan or coverage that provides 

7 both medical and surgical bene8 fits and mental health and sub9 stance-related disorder benefits, if 

10 medical and surgical benefits are 

11 provided for substantially all 

12 items and services in a category 

13 specified in clause (ii) furnished 

14 outside any network of providers 

15 established or recognized under 

16 such plan or coverage, the mental 

17 health and substance-related dis18 order benefits shall also be pro19 vided for items and services in 

20 such category furnished outside 

21 any network of providers estab22 lished or recognized under such 

23 plan or coverage in accordance 

24 with the requirements of this sec25 tion. 


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1 ‘‘(ii) CATEGORIES OF ITEMS AND

2 SERVICES.—For purposes of clause 

3 (i), there shall be the following 

4 three categories of items and serv5 ices for benefits, whether medical 

6 and surgical benefits or mental 

7 health and substance-related dis8 order benefits, and all medical 

9 and surgical benefits and all men10 tal health and substance-related 

11 disorder benefits shall be classi12 fied into one of the following cat13 egories: 

14 ‘‘(I) EMERGENCY.—Items 

15 and services, whether fur16 nished on an inpatient or out17 patient basis, required for the 

18 treatment of an emergency 

19 medical condition (including 

20 an emergency condition relat21 ing to mental health and sub22 stance-related disorders). 

23 ‘‘(II) INPATIENT.—Items 

24 and services not described in 


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1 subclause (I) furnished on an 

2 inpatient basis. 

3 ‘‘(III) OUTPATIENT.—Items 

4 and services not described in 

5 subclause (I) furnished on an 

6 outpatient basis.’’. 

7 (e) REVISION OF INCREASED COST EXEMP8 TION.—Paragraph (2) of subsection (c) of such 

9 section is amended to read as follows: 

10 ‘‘(2) INCREASED COST EXEMPTION.—

11 ‘‘(A) IN GENERAL.—With respect to 

12 a group health plan (or health insur13 ance coverage offered in connection 

14 with such a plan), if the application 

15 of this section to such plan (or cov16 erage) results in an increase for the 

17 plan year involved of the actual total 

18 costs of coverage with respect to med19 ical and surgical benefits and mental 

20 health and substance-related disorder 

21 benefits under the plan (as deter22 mined and certified under subpara23 graph (C)) by an amount that exceeds 

24 the applicable percentage described 

25 in subparagraph (B) of the actual 


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1 total plan costs, the provisions of this 

2 section shall not apply to such plan 

3 (or coverage) during the following 

4 plan year, and such exemption shall 

5 apply to the plan (or coverage) for 1 

6 plan year. 

7 ‘‘(B) APPLICABLE PERCENTAGE.—

8 With respect to a plan (or coverage), 

9 the applicable percentage described 

10 in this paragraph shall be—

11 ‘‘(i) 2 percent in the case of the 

12 first plan year which begins after 

13 the date of the enactment of the 

14 Paul Wellstone Mental Health and 

15 Addiction Equity Act of 2007; and 

16 ‘‘(ii) 1 percent in the case of 

17 each subsequent plan year. 

18 ‘‘(C) DETERMINATIONS BY ACTU19 ARIES.—Determinations as to increases 

20 in actual costs under a plan (or cov21 erage) for purposes of this subsection 

22 shall be made by a qualified actuary 

23 who is a member in good standing of 

24 the American Academy of Actuaries. 

25 Such determinations shall be certified 


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1 by the actuary and be made available 

2 to the general public. 

3 ‘‘(D) 6-MONTH DETERMINATIONS.—If 

4 a group health plan (or a health in5 surance issuer offering coverage in 

6 connection with such a plan) seeks an 

7 exemption under this paragraph, de8 terminations under subparagraph (A) 

9 shall be made after such plan (or cov10 erage) has complied with this section 

11 for the first 6 months of the plan year 

12 involved. 

13 ‘‘(E) NOTIFICATION.—An election to 

14 modify coverage of mental health and 

15 substance-related disorder benefits as 

16 permitted under this paragraph shall 

17 be treated as a material modification 

18 in the terms of the plan as described 

19 in section 102(a)(1) and shall be sub20 ject to the applicable notice require21 ments under section 104(b)(1).’’. 

22 (f) CHANGE IN EXCLUSION FOR SMALLEST EM23 PLOYERS.—Subsection (c)(1)(B) of such section 

24 is amended—


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1 (1) by inserting ‘‘(or 1 in the case of an 

2 employer residing in a State that permits 

3 small groups to include a single indi4 vidual)’’ after ‘‘at least 2’’ the first place it 

5 appears; and 

6 (2) by striking ‘‘and who employs at 

7 least 2 employees on the first day of the 

8 plan year’’. 

9 (g) ELIMINATION OF SUNSET PROVISION.—

10 Such section is amended by striking out sub11 section (f). 

12 (h) CLARIFICATION REGARDING PREEMP13 TION.—Such section is further amended by in14 serting after subsection (e) the following new 

15 subsection: 

16 ‘‘(f) PREEMPTION, RELATION TO STATE

17 LAWS.—

18 ‘‘(1) IN GENERAL.—Nothing in this sec19 tion shall be construed to preempt any 

20 State law that provides greater consumer 

21 protections, benefits, methods of access to 

22 benefits, rights or remedies that are great23 er than the protections, benefits, methods 

24 of access to benefits, rights or remedies 

25 provided under this section. 


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1 ‘‘(2) ERISA.—Nothing in this section 

2 shall be construed to affect or modify the 

3 provisions of section 514 with respect to 

4 group health plans.’’. 

5 (i) CONFORMING AMENDMENTS TO HEAD6 ING.—

7 (1) IN GENERAL.—The heading of such 

8 section is amended to read as follows: 

9 ‘‘SEC. 712. Equity in mental health and substance-related dis10 order benefits.’’. 

11 (2) CLERICAL AMENDMENT.—The table 

12 of contents in section 1 of such Act is 

13 amended by striking the item relating to 

14 section 712 and inserting the following 

15 new item: 

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

16 (j) EFFECTIVE DATE.—The amendments 

17 made by this section shall apply with respect 

18 to plan years beginning on or after January 1, 

19 2008. 

20 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE 

21 ACT RELATING TO THE GROUP MARKET. 

22 (a) EXTENSION OF PARITY TO TREATMENT

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1 MENTS.—Section 2705 of the Public Health 

2 Service Act (42 U.S.C. 300gg–5) is amended—

3 (1) in subsection (a), by adding at the 

4 end the following new paragraphs: 

5 ‘‘(3) TREATMENT LIMITS.—

6 ‘‘(A) NO TREATMENT LIMIT.—If the 

7 plan or coverage does not include a 

8 treatment limit (as defined in sub9 paragraph (D)) on substantially all 

10 medical and surgical benefits in any 

11 category of items or services (specified 

12 in subparagraph (C)), the plan or cov13 erage may not impose any treatment 

14 limit on mental health or substance15 related disorder benefits that are clas16 sified in the same category of items or 

17 services. 

18 ‘‘(B) TREATMENT LIMIT.—If the plan 

19 or coverage includes a treatment limit 

20 on substantially all medical and sur21 gical benefits in any category of items 

22 or services, the plan or coverage may 

23 not impose such a treatment limit on 

24 mental health or substance-related 

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1 ices within such category that is more 

2 restrictive than the predominant 

3 treatment limit that is applicable to 

4 medical and surgical benefits for 

5 items and services within such cat6 egory. 

7 ‘‘(C) CATEGORIES OF ITEMS AND

8 SERVICES FOR APPLICATION OF TREAT9 MENT LIMITS AND BENEFICIARY FINAN10 CIAL REQUIREMENTS.—For purposes of 

11 this paragraph and paragraph (4), 

12 there shall be the following five cat13 egories of items and services for bene14 fits, whether medical and surgical 

15 benefits or mental health and sub16 stance-related disorder benefits, and 

17 all medical and surgical benefits and 

18 all mental health and substance re19 lated benefits shall be classified into 

20 one of the following categories: 

21 ‘‘(i) INPATIENT, IN-NETWORK.—

22 Items and services not described 

23 in clause (v) furnished on an in24 patient basis and within a net25 work of providers established or 


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1 recognized under such plan or 

2 coverage. 

3 ‘‘(ii) INPATIENT, OUT-OF-NET4 WORK.—Items and services not de5 scribed in clause (v) furnished on 

6 an inpatient basis and outside 

7 any network of providers estab8 lished or recognized under such 

9 plan or coverage. 

10 ‘‘(iii) OUTPATIENT, IN-NET11 WORK.—Items and services not de12 scribed in clause (v) furnished on 

13 an outpatient basis and within a 

14 network of providers established 

15 or recognized under such plan or 

16 coverage. 

17 ‘‘(iv) OUTPATIENT, OUT-OF-NET18 WORK.—Items and services not de19 scribed in clause (v) furnished on 

20 an outpatient basis and outside 

21 any network of providers estab22 lished or recognized under such 

23 plan or coverage. 

24 ‘‘(v) EMERGENCY CARE.—Items 

25 and services, whether furnished 


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1 on an inpatient or outpatient 

2 basis or within or outside any net3 work of providers, required for the 

4 treatment of an emergency med5 ical condition (as defined in sec6 tion 1867(e) of the Social Security 

7 Act, including an emergency con8 dition relating to mental health 

9 and substance-related disorders). 

10 ‘‘(D) TREATMENT LIMIT DEFINED.—

11 For purposes of this paragraph, the 

12 term ‘treatment limit’ means, with re13 spect to a plan or coverage, limitation 

14 on the frequency of treatment, number 

15 of visits or days of coverage, or other 

16 similar limit on the duration or scope 

17 of treatment under the plan or cov18 erage. 

19 ‘‘(E) PREDOMINANCE.—For purposes 

20 of this subsection, a treatment limit or 

21 financial requirement with respect to 

22 a category of items and services is 

23 considered to be predominant if it is 

24 the most common or frequent of such 

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1 spect to such category of items and 

2 services. 

3 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE4 MENTS.—

5 ‘‘(A) NO BENEFICIARY FINANCIAL RE6 QUIREMENT.—If the plan or coverage 

7 does not include a beneficiary finan8 cial requirement (as defined in sub9 paragraph (C)) on substantially all 

10 medical and surgical benefits within 

11 a category of items and services (spec12 ified in paragraph (3)(C)), the plan or 

13 coverage may not impose such a bene14 ficiary financial requirement on men15 tal health or substance-related dis16 order benefits for items and services 

17 within such category. 

18 ‘‘(B) BENEFICIARY FINANCIAL RE19 QUIREMENT.—

20 ‘‘(i) TREATMENT OF

21 DEDUCTIBLES, OUT-OF-POCKET LIM22 ITS, AND SIMILAR FINANCIAL RE23 QUIREMENTS.—If the plan or cov24 erage includes a deductible, a lim25 itation on out-of-pocket expenses, 


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1 or similar beneficiary financial 

2 requirement that does not apply 

3 separately to individual items and 

4 services on substantially all med5 ical and surgical benefits within a 

6 category of items and services, the 

7 plan or coverage shall apply such 

8 requirement (or, if there is more 

9 than one such requirement for 

10 such category of items and serv11 ices, the predominant requirement 

12 for such category) both to medical 

13 and surgical benefits within such 

14 category and to mental health and 

15 substance-related disorder bene16 fits within such category and 

17 shall not distinguish in the appli18 cation of such requirement be19 tween such medical and surgical 

20 benefits and such mental health 

21 and substance-related disorder 

22 benefits. 

23 ‘‘(ii) OTHER FINANCIAL REQUIRE24 MENTS.—If the plan or coverage in25 cludes a beneficiary financial reVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00128 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 quirement not described in clause 

2 (i) on substantially all medical 

3 and surgical benefits within a cat4 egory of items and services, the 

5 plan or coverage may not impose 

6 such financial requirement on 

7 mental health or substance-re8 lated disorder benefits for items 

9 and services within such category 

10 in a way that is more costly to the 

11 participant or beneficiary than 

12 the predominant beneficiary fi13 nancial requirement applicable to 

14 medical and surgical benefits for 

15 items and services within such 

16 category. 

17 ‘‘(C) BENEFICIARY FINANCIAL RE18 QUIREMENT DEFINED.—For purposes of 

19 this paragraph, the term ‘beneficiary 

20 financial requirement’ includes, with 

21 respect to a plan or coverage, any de22 ductible, coinsurance, co-payment, 

23 other cost sharing, and limitation on 

24 the total amount that may be paid by 

25 a participant or beneficiary with reVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00129 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 spect to benefits under the plan or 

2 coverage, but does not include the ap3 plication of any aggregate lifetime 

4 limit or annual limit.’’; and 

5 (2) in subsection (b)—

6 (A) by striking ‘‘construed—’’ and 

7 all that follows through ‘‘(1) as re8 quiring’’ and inserting ‘‘construed as 

9 requiring’’; 

10 (B) by striking ‘‘; or’’ and inserting 

11 a period; and 

12 (C) by striking paragraph (2). 

13 (b) EXPANSION TO SUBSTANCE-RELATED DIS14 ORDER BENEFITS AND REVISION OF DEFINITION.—

15 Such section is further amended—

16 (1) by striking ‘‘mental health bene17 fits’’ and inserting ‘‘mental health or sub18 stance-related disorder benefits’’ each 

19 place it appears; and 

20 (2) in paragraph (4) of subsection 

21 (e)—

22 (A) by striking ‘‘MENTAL HEALTH

23 BENEFITS’’ and inserting ‘‘MENTAL

24 HEALTH AND SUBSTANCE-RELATED DIS25 ORDER BENEFITS’’; 


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1 (B) by striking ‘‘benefits with re2 spect to mental health services’’ and 

3 inserting ‘‘benefits with respect to 

4 services for mental health conditions 

5 or substance-related disorders’’; and 

6 (C) by striking ‘‘, but does not in7 clude benefits with respect to treat8 ment of substance abuse or chemical 

9 dependency’’. 

10 (c) AVAILABILITY OF PLAN INFORMATION

11 ABOUT CRITERIA FOR MEDICAL NECESSITY.—Sub12 section (a) of such section, as amended by sub13 section (a)(1), is further amended by adding at 

14 the end the following new paragraph: 

15 ‘‘(5) AVAILABILITY OF PLAN INFORMA16 TION.—The criteria for medical necessity 

17 determinations made under the plan with 

18 respect to mental health and substance19 related disorder benefits (or the health in20 surance coverage offered in connection 

21 with the plan with respect to such bene22 fits) shall be made available by the plan 

23 administrator (or the health insurance 

24 issuer offering such coverage) to any cur25 rent or potential participant, beneficiary, 


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1 or contracting provider upon request. The 

2 reason for any denial under the plan (or 

3 coverage) of reimbursement or payment 

4 for services with respect to mental health 

5 and substance-related disorder benefits in 

6 the case of any participant or beneficiary 

7 shall, upon request, be made available by 

8 the plan administrator (or the health in9 surance issuer offering such coverage) to 

10 the participant or beneficiary.’’. 

11 (d) MINIMUM BENEFIT REQUIREMENTS.—Sub12 section (a) of such section is further amended 

13 by adding at the end the following new para14 graph: 

15 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND

16 EQUITY IN OUT-OF-NETWORK BENEFITS.—

17 ‘‘(A) MINIMUM SCOPE OF MENTAL

18 HEALTH AND SUBSTANCE-RELATED DIS19 ORDER BENEFITS.—In the case of a 

20 group health plan (or health insur21 ance coverage offered in connection 

22 with such a plan) that provides any 

23 mental health or substance-related 

24 disorder benefits, the plan or coverage 

25 shall include benefits for any mental 


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1 health condition or substance-related 

2 disorder included in the most recent 

3 edition of the Diagnostic and Statis4 tical Manual of Mental Disorders pub5 lished by the American Psychiatric As6 sociation. 

7 ‘‘(B) EQUITY IN COVERAGE OF OUT8 OF-NETWORK BENEFITS.—

9 ‘‘(i) IN GENERAL.—In the case of 

10 a group health plan (or health in11 surance coverage offered in con12 nection with such a plan) that 

13 provides both medical and sur14 gical benefits and mental health 

15 or substance-related disorder ben16 efits, if medical and surgical bene17 fits are provided for substantially 

18 all items and services in a cat19 egory specified in clause (ii) fur20 nished outside any network of pro21 viders established or recognized 

22 under such plan or coverage, the 

23 mental health and substance-re24 lated disorder benefits shall also 

25 be provided for items and services 


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1 in such category furnished outside 

2 any network of providers estab3 lished or recognized under such 

4 plan or coverage in accordance 

5 with the requirements of this sec6 tion. 

7 ‘‘(ii) CATEGORIES OF ITEMS AND

8 SERVICES.—For purposes of clause 

9 (i), there shall be the following 

10 three categories of items and serv11 ices for benefits, whether medical 

12 and surgical benefits or mental 

13 health and substance-related dis14 order benefits, and all medical 

15 and surgical benefits and all men16 tal health and substance-related 

17 disorder benefits shall be classi18 fied into one of the following cat19 egories: 

20 ‘‘(I) EMERGENCY.—Items 

21 and services, whether fur22 nished on an inpatient or out23 patient basis, required for the 

24 treatment of an emergency 

25 medical condition (including 


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1 an emergency condition relat2 ing to mental health or sub3 stance-related disorders). 

4 ‘‘(II) INPATIENT.—Items 

5 and services not described in 

6 subclause (I) furnished on an 

7 inpatient basis. 

8 ‘‘(III) OUTPATIENT.—Items 

9 and services not described in 

10 subclause (I) furnished on an 

11 outpatient basis.’’. 

12 (e) REVISION OF INCREASED COST EXEMP13 TION.—Paragraph (2) of subsection (c) of such 

14 section is amended to read as follows: 

15 ‘‘(2) INCREASED COST EXEMPTION.—

16 ‘‘(A) IN GENERAL.—With respect to 

17 a group health plan (or health insur18 ance coverage offered in connection 

19 with such a plan), if the application 

20 of this section to such plan (or cov21 erage) results in an increase for the 

22 plan year involved of the actual total 

23 costs of coverage with respect to med24 ical and surgical benefits and mental 

25 health and substance-related disorder 


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1 benefits under the plan (as deter2 mined and certified under subpara3 graph (C)) by an amount that exceeds 

4 the applicable percentage described 

5 in subparagraph (B) of the actual 

6 total plan costs, the provisions of this 

7 section shall not apply to such plan 

8 (or coverage) during the following 

9 plan year, and such exemption shall 

10 apply to the plan (or coverage) for 1 

11 plan year. 

12 ‘‘(B) APPLICABLE PERCENTAGE.—

13 With respect to a plan (or coverage), 

14 the applicable percentage described 

15 in this paragraph shall be—

16 ‘‘(i) 2 percent in the case of the 

17 first plan year to which this para18 graph applies; and 

19 ‘‘(ii) 1 percent in the case of 

20 each subsequent plan year. 

21 ‘‘(C) DETERMINATIONS BY ACTU22 ARIES.—Determinations as to increases 

23 in actual costs under a plan (or cov24 erage) for purposes of this subsection 

25 shall be made by a qualified and liVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00136 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 censed actuary who is a member in 

2 good standing of the American Acad3 emy of Actuaries. Such determinations 

4 shall be certified by the actuary and 

5 be made available to the general pub6 lic. 

7 ‘‘(D) 6-MONTH DETERMINATIONS.—If 

8 a group health plan (or a health in9 surance issuer offering coverage in 

10 connection with such a plan) seeks an 

11 exemption under this paragraph, de12 terminations under subparagraph (A) 

13 shall be made after such plan (or cov14 erage) has complied with this section 

15 for the first 6 months of the plan year 

16 involved. 

17 ‘‘(E) NOTIFICATION.—A group 

18 health plan under this part shall com19 ply with the notice requirement under 

20 section 712(c)(2)(E) of the Employee 

21 Retirement Income Security Act of 

22 1974 with respect to a modification of 

23 mental health and substance-related 

24 disorder benefits as permitted under 


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1 this paragraph as if such section ap2 plied to such plan.’’. 

3 (f) CHANGE IN EXCLUSION FOR SMALLEST EM4 PLOYERS.—Subsection (c)(1)(B) of such section 

5 is amended—

6 (1) by inserting ‘‘(or 1 in the case of an 

7 employer residing in a State that permits 

8 small groups to include a single indi9 vidual)’’ after ‘‘at least 2’’ the first place it 

10 appears; and 

11 (2) by striking ‘‘and who employs at 

12 least 2 employees on the first day of the 

13 plan year’’. 

14 (g) ELIMINATION OF SUNSET PROVISION.—

15 Such section is amended by striking out sub16 section (f). 

17 (h) CLARIFICATION REGARDING PREEMP18 TION.—Such section is further amended by in19 serting after subsection (e) the following new 

20 subsection: 

21 ‘‘(f) PREEMPTION, RELATION TO STATE

22 LAWS.—

23 ‘‘(1) IN GENERAL.—Nothing in this sec24 tion shall be construed to preempt any 

25 State law that provides greater consumer 


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1 protections, benefits, methods of access to 

2 benefits, rights or remedies that are great3 er than the protections, benefits, methods 

4 of access to benefits, rights or remedies 

5 provided under this section. 

6 ‘‘(2) CONSTRUCTION.—Nothing in this 

7 section shall be construed to affect or 

8 modify the provisions of section 2723 with 

9 respect to group health plans.’’. 

10 (i) CONFORMING AMENDMENT TO HEADING.—

11 The heading of such section is amended to 

12 read as follows: 

13 ‘‘SEC. 2705. EQUITY IN MENTAL HEALTH AND SUBSTANCE14 RELATED DISORDER BENEFITS.’’. 

15 (j) EFFECTIVE DATE.—

16 (1) IN GENERAL.—Except as otherwise 

17 provided in this subsection, the amend18 ments made by this section shall apply 

19 with respect to plan years beginning on or 

20 after January 1, 2008. 

21 (2) ELIMINATION OF SUNSET.—The 

22 amendment made by subsection (g) shall 

23 apply to benefits for services furnished 

24 after December 31, 2007. 


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1 (3) SPECIAL RULE FOR COLLECTIVE BAR2 GAINING AGREEMENTS.—In the case of a 

3 group health plan maintained pursuant 

4 to one or more collective bargaining 

5 agreements between employee representa6 tives and one or more employers ratified 

7 before the date of the enactment of this 

8 Act, the amendments made by this section 

9 shall not apply to plan years beginning 

10 before the later of—

11 (A) the date on which the last of 

12 the collective bargaining agreements 

13 relating to the plan terminates (deter14 mined without regard to any exten15 sion thereof agreed to after the date of 

16 the enactment of this Act), or 

17 (B) January 1, 2010. 

18 For purposes of subparagraph (A), any 

19 plan amendment made pursuant to a col20 lective bargaining agreement relating to 

21 the plan which amends the plan solely to 

22 conform to any requirement imposed 

23 under an amendment under this section 

24 shall not be treated as a termination of 

25 such collective bargaining agreement. 


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1 (k) CONSTRUCTION REGARDING USE OF MED2 ICAL MANAGEMENT TOOLS.—Nothing in this Act 

3 shall be construed to prohibit a group health 

4 plan or health insurance issuer from using 

5 medical management tools as long as such 

6 management tools are based on valid medical 

7 evidence and are relevant to the patient whose 

8 medical treatment is under review. 

9 SEC. 4. AMENDMENTS TO THE INTERNAL REVENUE CODE 

10 OF 1986. 

11 (a) EXTENSION OF PARITY TO TREATMENT

12 LIMITS AND BENEFICIARY FINANCIAL REQUIRE13 MENTS.—Section 9812 of the Internal Revenue 

14 Code of 1986 is amended—

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

16 end the following new paragraphs: 

17 ‘‘(3) TREATMENT LIMITS.—

18 ‘‘(A) NO TREATMENT LIMIT.—If the 

19 plan does not include a treatment 

20 limit (as defined in subparagraph 

21 (D)) on substantially all medical and 

22 surgical benefits in any category of 

23 items or services (specified in sub24 paragraph (C)), the plan may not im25 pose any treatment limit on mental 


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1 health and substance-related disorder 

2 benefits that are classified in the 

3 same category of items or services. 

4 ‘‘(B) TREATMENT LIMIT.—If the plan 

5 includes a treatment limit on substan6 tially all medical and surgical bene7 fits in any category of items or serv8 ices, the plan may not impose such a 

9 treatment limit on mental health and 

10 substance-related disorder benefits for 

11 items and services within such cat12 egory that are more restrictive than 

13 the predominant treatment limit that 

14 is applicable to medical and surgical 

15 benefits for items and services within 

16 such category. 

17 ‘‘(C) CATEGORIES OF ITEMS AND

18 SERVICES FOR APPLICATION OF TREAT19 MENT LIMITS AND BENEFICIARY FINAN20 CIAL REQUIREMENTS.—For purposes of 

21 this paragraph and paragraph (4), 

22 there shall be the following four cat23 egories of items and services for bene24 fits, whether medical and surgical 

25 benefits or mental health and subVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00142 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 stance-related disorder benefits, and 

2 all medical and surgical benefits and 

3 all mental health and substance re4 lated benefits shall be classified into 

5 one of the following categories: 

6 ‘‘(i) INPATIENT, IN-NETWORK.—

7 Items and services furnished on 

8 an inpatient basis and within a 

9 network of providers established 

10 or recognized under such plan or 

11 coverage. 

12 ‘‘(ii) INPATIENT, OUT-OF-NET13 WORK.—Items and services fur14 nished on an inpatient basis and 

15 outside any network of providers 

16 established or recognized under 

17 such plan or coverage. 

18 ‘‘(iii) OUTPATIENT, IN-NET19 WORK.—Items and services fur20 nished on an outpatient basis and 

21 within a network of providers es22 tablished or recognized under 

23 such plan or coverage. 

24 ‘‘(iv) OUTPATIENT, OUT-OF-NET25 WORK.—Items and services furVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00143 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 nished on an outpatient basis and 

2 outside any network of providers 

3 established or recognized under 

4 such plan or coverage. 

5 ‘‘(D) TREATMENT LIMIT DEFINED.—

6 For purposes of this paragraph, the 

7 term ‘treatment limit’ means, with re8 spect to a plan, limitation on the fre9 quency of treatment, number of visits 

10 or days of coverage, or other similar 

11 limit on the duration or scope of treat12 ment under the plan. 

13 ‘‘(E) PREDOMINANCE.—For purposes 

14 of this subsection, a treatment limit or 

15 financial requirement with respect to 

16 a category of items and services is 

17 considered to be predominant if it is 

18 the most common or frequent of such 

19 type of limit or requirement with re20 spect to such category of items and 

21 services. 

22 ‘‘(4) BENEFICIARY FINANCIAL REQUIRE23 MENTS.—

24 ‘‘(A) NO BENEFICIARY FINANCIAL RE25 QUIREMENT.—If the plan does not inVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00144 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 clude a beneficiary financial require2 ment (as defined in subparagraph 

3 (C)) on substantially all medical and 

4 surgical benefits within a category of 

5 items and services (specified in para6 graph (3)(C)), the plan may not im7 pose such a beneficiary financial re8 quirement on mental health and sub9 stance-related disorder benefits for 

10 items and services within such cat11 egory. 

12 ‘‘(B) BENEFICIARY FINANCIAL RE13 QUIREMENT.—

14 ‘‘(i) TREATMENT OF

15 DEDUCTIBLES, OUT-OF-POCKET LIM16 ITS, AND SIMILAR FINANCIAL RE17 QUIREMENTS.—If the plan or cov18 erage includes a deductible, a lim19 itation on out-of-pocket expenses, 

20 or similar beneficiary financial 

21 requirement that does not apply 

22 separately to individual items and 

23 services on substantially all med24 ical and surgical benefits within a 

25 category of items and services, the 


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1 plan or coverage shall apply such 

2 requirement (or, if there is more 

3 than one such requirement for 

4 such category of items and serv5 ices, the predominant requirement 

6 for such category) both to medical 

7 and surgical benefits within such 

8 category and to mental health and 

9 substance-related disorder bene10 fits within such category and 

11 shall not distinguish in the appli12 cation of such requirement be13 tween such medical and surgical 

14 benefits and such mental health 

15 and substance-related disorder 

16 benefits. 

17 ‘‘(ii) OTHER FINANCIAL REQUIRE18 MENTS.—If the plan includes a 

19 beneficiary financial requirement 

20 not described in clause (i) on sub21 stantially all medical and sur22 gical benefits within a category of 

23 items and services, the plan may 

24 not impose such financial require25 ment on mental health and subVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00146 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 stance-related disorder benefits 

2 for items and services within such 

3 category in a way that is more 

4 costly to the participant or bene5 ficiary than the predominant ben6 eficiary financial requirement ap7 plicable to medical and surgical 

8 benefits for items and services 

9 within such category. 

10 ‘‘(C) BENEFICIARY FINANCIAL RE11 QUIREMENT DEFINED.—For purposes of 

12 this paragraph, the term ‘beneficiary 

13 financial requirement’ includes, with 

14 respect to a plan, any deductible, coin15 surance, co-payment, other cost shar16 ing, and limitation on the total 

17 amount that may be paid by a partici18 pant or beneficiary with respect to 

19 benefits under the plan, but does not 

20 include the application of any aggre21 gate lifetime limit or annual limit.’’; 

22 and 

23 (2) in subsection (b)—

24 (A) by striking ‘‘construed—’’ and 

25 all that follows through ‘‘(1) as reVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00147 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 quiring’’ and inserting ‘‘construed as 

2 requiring’’; 

3 (B) by striking ‘‘; or’’ and inserting 

4 a period; and 

5 (C) by striking paragraph (2). 

6 (b) EXPANSION TO SUBSTANCE-RELATED DIS7 ORDER BENEFITS AND REVISION OF DEFINITION.—

8 Such section is further amended—

9 (1) by striking ‘‘mental health bene10 fits’’ and inserting ‘‘mental health and 

11 substance-related disorder benefits’’ each 

12 place it appears; and 

13 (2) in paragraph (4) of subsection 

14 (e)—

15 (A) by striking ‘‘MENTAL HEALTH

16 BENEFITS’’ in the heading and insert17 ing ‘‘MENTAL HEALTH AND SUBSTANCE18 RELATED DISORDER BENEFITS’’; 

19 (B) by striking ‘‘benefits with re20 spect to mental health services’’ and 

21 inserting ‘‘benefits with respect to 

22 services for mental health conditions 

23 or substance-related disorders’’; and 

24 (C) by striking ‘‘, but does not in25 clude benefits with respect to treatVerDate Aug 31 2005 03:33 Mar 05, 2008 Jkt 069200 PO 00000 Frm 00148 Fmt 6652 Sfmt 6204 E:\BILLS\H1424.RH H1424

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1 ment of substances abuse or chemical 

2 dependency’’. 

3 (c) AVAILABILITY OF PLAN INFORMATION

4 ABOUT CRITERIA FOR MEDICAL NECESSITY.—Sub5 section (a) of such section, as amended by sub6 section (a)(1), is further amended by adding at 

7 the end the following new paragraph: 

8 ‘‘(5) AVAILABILITY OF PLAN INFORMA9 TION.—The criteria for medical necessity 

10 determinations made under the plan with 

11 respect to mental health and substance12 related disorder benefits shall be made 

13 available by the plan administrator to 

14 any current or potential participant, ben15 eficiary, or contracting provider upon re16 quest. The reason for any denial under 

17 the plan of reimbursement or payment for 

18 services with respect to mental health and 

19 substance-related disorder benefits in the 

20 case of any participant or beneficiary 

21 shall, upon request, be made available by 

22 the plan administrator to the participant 

23 or beneficiary.’’. 

24 (d) MINIMUM BENEFIT REQUIREMENTS.—Sub25 section (a) of such section is further amended 


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1 by adding at the end the following new para2 graph: 

3 ‘‘(6) MINIMUM SCOPE OF COVERAGE AND

4 EQUITY IN OUT-OF-NETWORK BENEFITS.—

5 ‘‘(A) MINIMUM SCOPE OF MENTAL

6 HEALTH AND SUBSTANCE-RELATED DIS7 ORDER BENEFITS.—In the case of a 

8 group health plan (or health insur9 ance coverage offered in connection 

10 with such a plan) that provides any 

11 mental health and substance-related 

12 disorder benefits, the plan or coverage 

13 shall include benefits for any mental 

14 health condition or substance-related 

15 disorder for which benefits are pro16 vided under the benefit plan option of17 fered under chapter 89 of title 5, 

18 United States Code, with the highest 

19 average enrollment as of the begin20 ning of the most recent year beginning 

21 on or before the beginning of the plan 

22 year involved. 

23 ‘‘(B) EQUITY IN COVERAGE OF OUT24 OF-NETWORK BENEFITS.—


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1 ‘‘(i) IN GENERAL.—In the case of 

2 a plan that provides both medical 

3 and surgical benefits and mental 

4 health and substance-related dis5 order benefits, if medical and sur6 gical benefits are provided for 

7 substantially all items and serv8 ices in a category specified in 

9 clause (ii) furnished outside any 

10 network of providers established 

11 or recognized under such plan or 

12 coverage, the mental health and 

13 substance-related disorder bene14 fits shall also be provided for 

15 items and services in such cat16 egory furnished outside any net17 work of providers established or 

18 recognized under such plan in ac19 cordance with the requirements of 

20 this section. 

21 ‘‘(ii) CATEGORIES OF ITEMS AND

22 SERVICES.—For purposes of clause 

23 (i), there shall be the following 

24 three categories of items and serv25 ices for benefits, whether medical 


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1 and surgical benefits or mental 

2 health and substance-related dis3 order benefits, and all medical 

4 and surgical benefits and all men5 tal health and substance-related 

6 disorder benefits shall be classi7 fied into one of the following cat8 egories: 

9 ‘‘(I) EMERGENCY.—Items 

10 and services, whether fur11 nished on an inpatient or out12 patient basis, required for the 

13 treatment of an emergency 

14 medical condition (including 

15 an emergency condition relat16 ing to mental health and sub17 stance-related disorders). 

18 ‘‘(II) INPATIENT.—Items 

19 and services not described in 

20 subclause (I) furnished on an 

21 inpatient basis. 

22 ‘‘(III) OUTPATIENT.—Items 

23 and services not described in 

24 subclause (I) furnished on an 

25 outpatient basis.’’. 


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1 (e) REVISION OF INCREASED COST EXEMP2 TION.—Paragraph (2) of subsection (c) of such 

3 section is amended to read as follows: 

4 ‘‘(2) INCREASED COST EXEMPTION.—

5 ‘‘(A) IN GENERAL.—With respect to 

6 a group health plan, if the applica7 tion of this section to such plan re8 sults in an increase for the plan year 

9 involved of the actual total costs of 

10 coverage with respect to medical and 

11 surgical benefits and mental health 

12 and substance-related disorder bene13 fits under the plan (as determined 

14 and certified under subparagraph 

15 (C)) by an amount that exceeds the ap16 plicable percentage described in sub17 paragraph (B) of the actual total plan 

18 costs, the provisions of this section 

19 shall not apply to such plan during 

20 the following plan year, and such ex21 emption shall apply to the plan for 1 

22 plan year. 

23 ‘‘(B) APPLICABLE PERCENTAGE.—

24 With respect to a plan, the applicable 


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1 percentage described in this para2 graph shall be—

3 ‘‘(i) 2 percent in the case of the 

4 first plan year which begins after 

5 the date of the enactment of the 

6 Paul Wellstone Mental Health and 

7 Addiction Equity Act of 2007; and 

8 ‘‘(ii) 1 percent in the case of 

9 each subsequent plan year. 

10 ‘‘(C) DETERMINATIONS BY ACTU11 ARIES.—Determinations as to increases 

12 in actual costs under a plan for pur13 poses of this subsection shall be made 

14 by a qualified actuary who is a mem15 ber in good standing of the American 

16 Academy of Actuaries. Such deter17 minations shall be certified by the ac18 tuary and be made available to the 

19 general public. 

20 ‘‘(D) 6-MONTH DETERMINATIONS.—If 

21 a group health plan seeks an exemp22 tion under this paragraph, determina23 tions under subparagraph (A) shall be 

24 made after such plan has complied 


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1 with this section for the first 6 months 

2 of the plan year involved.’’. 

3 (f) CHANGE IN EXCLUSION FOR SMALLEST EM4 PLOYERS.—Subsection (c)(1) of such section is 

5 amended to read as follows: 

6 ‘‘(1) SMALL EMPLOYER EXEMPTION.—

7 ‘‘(A) IN GENERAL.—This section 

8 shall not apply to any group health 

9 plan for any plan year of a small em10 ployer. 

11 ‘‘(B) SMALL EMPLOYER.—For pur12 poses of subparagraph (A), the term 

13 ‘small employer’ means, with respect 

14 to a calendar year and a plan year, 

15 an employer who employed an average 

16 of at least 2 (or 1 in the case of an em17 ployer residing in a State that permits 

18 small groups to include a single indi19 vidual) but not more than 50 employ20 ees on business days during the pre21 ceding calendar year. For purposes of 

22 the preceding sentence, all persons 

23 treated as a single employer under 

24 subsection (b), (c), (m), or (o) of sec25 tion 414 shall be treated as 1 employer 


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1 and rules similar to rules of subpara2 graphs (B) and (C) of section 

3 4980D(d)(2) shall apply.’’. 

4 (g) ELIMINATION OF SUNSET PROVISION.—

5 Such section is amended by striking subsection 

6 (f). 

7 (h) CONFORMING AMENDMENTS TO HEAD8 ING.—

9 (1) IN GENERAL.—The heading of such 

10 section is amended to read as follows: 

11 ‘‘SEC. 9812. Equity in mental health and substance-related dis12 order benefits.’’. 

13 (2) CLERICAL AMENDMENT.—The table 

14 of sections for subchapter B of chapter 

15 100 of the Internal Revenue Code of 1986 

16 is amended by striking the item relating 

17 to section 9812 and inserting the following 

18 new item: 

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

19 (i) EFFECTIVE DATE.—The amendments 

20 made by this section shall apply with respect 

21 to plan years beginning on or after January 1, 

22 2008. 


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1 SEC. 5. GOVERNMENT ACCOUNTABILITY OFFICE STUDIES 

2 AND REPORTS. 

3 (a) IMPLEMENTATION OF ACT.—

4 (1) STUDY.—The Comptroller General 

5 of the United States shall conduct a study 

6 that evaluates the effect of the implemen7 tation of the amendments made by this 

8 Act on—

9 (A) the cost of health insurance 

10 coverage; 

11 (B) access to health insurance cov12 erage (including the availability of in13 network providers); 

14 (C) the quality of health care; 

15 (D) Medicare, Medicaid, and State 

16 and local mental health and sub17 stance abuse treatment spending; 

18 (E) the number of individuals 

19 with private insurance who received 

20 publicly funded health care for men21 tal health and substance-related dis22 orders; 

23 (F) spending on public services, 

24 such as the criminal justice system, 

25 special education, and income assist26 ance programs; 


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1 (G) the use of medical manage2 ment of mental health and substance3 related disorder benefits and medical 

4 necessity determinations by group 

5 health plans (and health insurance 

6 issuers offering health insurance cov7 erage in connection with such plans) 

8 and timely access by participants and 

9 beneficiaries to clinically-indicated 

10 care for mental health and substance11 use disorders; and 

12 (H) other matters as determined 

13 appropriate by the Comptroller Gen14 eral. 

15 (2) REPORT.—Not later than 2 years 

16 after the date of enactment of this Act, the 

17 Comptroller General shall prepare and 

18 submit to the appropriate committees of 

19 the Congress a report containing the re20 sults of the study conducted under para21 graph (1). 

22 (b) BIANNUAL REPORT ON OBSTACLES IN OB23 TAINING COVERAGE.—Every two years, the 

24 Comptroller General shall submit to each 

25 House of the Congress a report on obstacles 


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1 that individuals face in obtaining mental 

2 health and substance-related disorder care 

3 under their health plans. 

4 (c) UNIFORM PATIENT PLACEMENT CRI5 TERIA.—Not later than 18 months after the 

6 date of the enactment of this Act, the Comp7 troller General shall submit to each House of 

8 the Congress a report on availability of uni9 form patient placement criteria for mental 

10 health and substance-related disorders that 

11 could be used by group health plans and 

12 health insurance issuers to guide determina13 tions of medical necessity and the extent to 

14 which health plans utilize such criteria. If 

15 such criteria do not exist, the report shall in16 clude recommendations on a process for devel17 oping such criteria. 


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Union Calendar No. 328 

110TH CONGRESS 

2D SESSION H. R. 1424 

[Report No. 110

–374, Parts I, II, and III] 

A BILL 

To amend section 712 of the Employee Retirement 

health plans. stance-related disorder benefits under group uity in the provision of mental health and subthe Internal Revenue Code of 1986 to require eqPublic Health Service Act, and section 9812 of Income Security Act of 1974, section 2705 of the 

MARCH 4, 2008 

Reported from the Committee on Energy and Commerce 

dered to be printed the Whole House on the State of the Union and orwith an amendment; committed to the Committee of 


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