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health plan) seeks an exemption under this 
paragraph, determinations under subparagraph 
(A) shall be made after such plan (or coverage) 
has complied with this section for the first 6 
months of the plan year involved. 
‘‘(E) NOTIFICATION.— 
‘‘(i) IN
GENERAL.—A group health 
plan (or a health insurance issuer offering 
coverage in connection with a group health 
plan) that, based upon a certification de-
scribed under subparagraph (C), qualifies 
for an exemption under this paragraph, 
and elects to implement the exemption, 
shall promptly notify the Secretary, the ap-
propriate State agencies, and participants 
and beneficiaries in the plan of such elec-
tion. 
‘‘(ii) REQUIREMENT.—A notification 
to the Secretary under clause (i) shall in-
clude— 
‘‘(I) a description of the number 
of covered lives under the plan (or 
coverage) involved at the time of the 
notification, and as applicable, at the 
time of any prior election of the cost- 
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exemption under this paragraph by 
such plan (or coverage); 
‘‘(II) for both the plan year upon 
which a cost exemption is sought and 
the year prior, a description of the ac-
tual total costs of coverage with re-
spect to medical and surgical benefits 
and mental health and substance use 
disorder benefits under the plan; and 
‘‘(III) for both the plan year 
upon which a cost exemption is sought 
and the year prior, the actual total 
costs of coverage with respect to men-
tal health and substance use disorder 
benefits under the plan. 
‘‘(iii) CONFIDENTIALITY.—A notifica-
tion to the Secretary under clause (i) shall 
be confidential. The Secretary shall make 
available, upon request and on not more 
than an annual basis, an anonymous 
itemization of such notifications, that in-
cludes— 
‘‘(I) a breakdown of States by 
the size and type of employers submit-
ting such notification; and 
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‘‘(II) a summary of the data re-
ceived under clause (ii). 
‘‘(F) AUDITS
BY
APPROPRIATE
AGEN-
CIES.—To determine compliance with this para-
graph, the Secretary may audit the books and 
records of a group health plan or health insur-
ance issuer relating to an exemption, including 
any actuarial reports prepared pursuant to sub-
paragraph (C), during the 6-year period fol-
lowing the notification of such exemption under 
subparagraph (E). A State agency receiving a 
notification under subparagraph (E) may also 
conduct such an audit with respect to an ex-
emption covered by such notification.’’; 
(4) in subsection (e), by striking paragraph (4) 
and inserting the following: 
‘‘(4) MENTAL HEALTH BENEFITS.—The term 
‘mental health benefits’ means benefits with respect 
to services for mental health conditions, as defined 
under the terms of the plan and in accordance with 
applicable Federal and State law. 
‘‘(5) SUBSTANCE USE DISORDER BENEFITS.— 
The term ‘substance use disorder benefits’ means 
benefits with respect to services for substance use 
disorders, as defined under the terms of the plan 
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and in accordance with applicable Federal and State 
law.’’; 
(5) by striking subsection (f); 
(6) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health and substance use disorder 
benefits’’ each place it appears in subsections 
(a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 
and 
(7) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health or substance use disorder 
benefits’’ each place it appears (other than in any 
provision amended by the previous paragraph). 
(c) AMENDMENTS TO INTERNAL REVENUE CODE.— 
Section 9812 of the Internal Revenue Code of 1986 is 
amended— 
(1) in subsection (a), by adding at the end the 
following: 
‘‘(3) FINANCIAL REQUIREMENTS AND TREAT-
MENT LIMITATIONS.— 
‘‘(A) IN GENERAL.—In the case of a group 
health plan that provides both medical and sur-
gical benefits and mental health or substance 
use disorder benefits, such plan shall ensure 
that— 
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‘‘(i) the financial requirements appli-
cable to such mental health or substance 
use disorder benefits are no more restric-
tive than the predominant financial re-
quirements applied to substantially all 
medical and surgical benefits covered by 
the plan, and there are no separate cost 
sharing requirements that are applicable 
only with respect to mental health or sub-
stance use disorder benefits; and 
‘‘(ii) the treatment limitations applica-
ble to such mental health or substance use 
disorder benefits are no more restrictive 
than the predominant treatment limita-
tions applied to substantially all medical 
and surgical benefits covered by the plan 
and there are no separate treatment limi-
tations that are applicable only with re-
spect to mental health or substance use 
disorder benefits. 
‘‘(B) DEFINITIONS.—In this paragraph: 
‘‘(i) FINANCIAL REQUIREMENT.—The 
term 
‘financial 
requirement’ 
includes 
deductibles, copayments, coinsurance, and 
out-of-pocket expenses, but excludes an ag-
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gregate lifetime limit and an annual limit 
subject to paragraphs (1) and (2), 
‘‘(ii) PREDOMINANT.—A financial re-
quirement or treatment limit is considered 
to be predominant if it is the most com-
mon or frequent of such type of limit or 
requirement. 
‘‘(iii) TREATMENT LIMITATION.—The 
term ‘treatment limitation’ includes limits 
on the frequency of treatment, number of 
visits, days of coverage, or other similar 
limits on the scope or duration of treat-
ment. 
‘‘(4) AVAILABILITY OF PLAN INFORMATION.— 
The criteria for medical necessity determinations 
made under the plan with respect to mental health 
or substance use disorder benefits shall be made 
available by the plan administrator in accordance 
with regulations to any current or potential partici-
pant, beneficiary, or contracting provider upon re-
quest. The reason for any denial under the plan of 
reimbursement or payment for services with respect 
to mental health or substance use disorder benefits 
in the case of any participant or beneficiary shall, on 
request or as otherwise required, be made available 
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by the plan administrator to the participant or bene-
ficiary in accordance with regulations. 
‘‘(5) OUT-OF-NETWORK
PROVIDERS.—In the 
case of a plan that provides both medical and sur-
gical benefits and mental health or substance use 
disorder benefits, if the plan provides coverage for 
medical or surgical benefits provided by out-of-net-
work providers, the plan shall provide coverage for 
mental health or substance use disorder benefits pro-
vided by out-of-network providers in a manner that 
is consistent with the requirements of this section.’’; 
(2) in subsection (b), by amending paragraph 
(2) to read as follows: 
‘‘(2) in the case of a group health plan that 
provides mental health or substance use disorder 
benefits, as affecting the terms and conditions of the 
plan relating to such benefits under the plan, except 
as provided in subsection (a).’’; 
(3) in subsection (c)— 
(A) by amending paragraph (1) to read as 
follows: 
‘‘(1) SMALL EMPLOYER EXEMPTION.— 
‘‘(A) IN GENERAL.—This section shall not 
apply to any group health plan for any plan 
year of a small employer. 
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‘‘(B) SMALL EMPLOYER.—For purposes of 
subparagraph (A), the term ‘small employer’ 
means, with respect to a calendar year and a 
plan year, an employer who employed an aver-
age of at least 2 (or 1 in the case of an em-
ployer residing in a State that permits small 
groups to include a single individual) but not 
more than 50 employees on business days dur-
ing the preceding calendar year. For purposes 
of the preceding sentence, all persons treated as 
a single employer under subsection (b), (c), 
(m), or (o) of section 414 shall be treated as 1 
employer and rules similar to rules of subpara-
graphs (B) and (C) of section 4980D(d)(2) 
shall apply.’’; and 
(B) by striking paragraph (2) and insert-
ing the following: 
‘‘(2) COST EXEMPTION.— 
‘‘(A) IN
GENERAL.—With respect to a 
group health plan, if the application of this sec-
tion to such plan results in an increase for the 
plan year involved of the actual total costs of 
coverage with respect to medical and surgical 
benefits and mental health and substance use 
disorder benefits under the plan (as determined 
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and certified under subparagraph (C)) by an 
amount that exceeds the applicable percentage 
described in subparagraph (B) of the actual 
total plan costs, the provisions of this section 
shall not apply to such plan during the fol-
lowing plan year, and such exemption shall 
apply to the plan for 1 plan year. An employer 
may elect to continue to apply mental health 
and substance use disorder parity pursuant to 
this section with respect to the group health 
plan involved regardless of any increase in total 
costs. 
‘‘(B) APPLICABLE PERCENTAGE.—With re-
spect to a plan, the applicable percentage de-
scribed in this subparagraph shall be— 
‘‘(i) 2 percent in the case of the first 
plan year in which this section is applied; 
and 
‘‘(ii) 1 percent in the case of each 
subsequent plan year. 
‘‘(C) DETERMINATIONS BY ACTUARIES.— 
Determinations as to increases in actual costs 
under a plan for purposes of this section shall 
be made and certified by a qualified and li-
censed actuary who is a member in good stand-
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ing of the American Academy of Actuaries. All 
such determinations shall be in a written report 
prepared by the actuary. The report, and all 
underlying documentation relied upon by the 
actuary, shall be maintained by the group 
health plan for a period of 6 years following the 
notification made under subparagraph (E). 
‘‘(D) 6-MONTH
DETERMINATIONS.—If a 
group health plan seeks an exemption under 
this paragraph, determinations under subpara-
graph (A) shall be made after such plan has 
complied with this section for the first 6 
months of the plan year involved. 
‘‘(E) NOTIFICATION.— 
‘‘(i) IN
GENERAL.—A group health 
plan that, based upon a certification de-
scribed under subparagraph (C), qualifies 
for an exemption under this paragraph, 
and elects to implement the exemption, 
shall promptly notify the Secretary, the ap-
propriate State agencies, and participants 
and beneficiaries in the plan of such elec-
tion. 
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‘‘(ii) REQUIREMENT.—A notification 
to the Secretary under clause (i) shall in-
clude— 
‘‘(I) a description of the number 
of covered lives under the plan in-
volved at the time of the notification, 
and as applicable, at the time of any 
prior election of the cost-exemption 
under this paragraph by such plan; 
‘‘(II) for both the plan year upon 
which a cost exemption is sought and 
the year prior, a description of the ac-
tual total costs of coverage with re-
spect to medical and surgical benefits 
and mental health and substance use 
disorder benefits under the plan; and 
‘‘(III) for both the plan year 
upon which a cost exemption is sought 
and the year prior, the actual total 
costs of coverage with respect to men-
tal health and substance use disorder 
benefits under the plan. 
‘‘(iii) CONFIDENTIALITY.—A notifica-
tion to the Secretary under clause (i) shall 
be confidential. The Secretary shall make 
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available, upon request and on not more 
than an annual basis, an anonymous 
itemization of such notifications, that in-
cludes— 
‘‘(I) a breakdown of States by 
the size and type of employers submit-
ting such notification; and 
‘‘(II) a summary of the data re-
ceived under clause (ii). 
‘‘(F) AUDITS
BY
APPROPRIATE
AGEN-
CIES.—To determine compliance with this para-
graph, the Secretary may audit the books and 
records of a group health plan relating to an 
exemption, including any actuarial reports pre-
pared pursuant to subparagraph (C), during 
the 6-year period following the notification of 
such exemption under subparagraph (E). A 
State agency receiving a notification under sub-
paragraph (E) may also conduct such an audit 
with respect to an exemption covered by such 
notification.’’; 
(4) in subsection (e), by striking paragraph (4) 
and inserting the following: 
‘‘(4) MENTAL HEALTH BENEFITS.—The term 
‘mental health benefits’ means benefits with respect 
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to services for mental health conditions, as defined 
under the terms of the plan and in accordance with 
applicable Federal and State law. 
‘‘(5) SUBSTANCE USE DISORDER BENEFITS.— 
The term ‘substance use disorder benefits’ means 
benefits with respect to services for substance use 
disorders, as defined under the terms of the plan 
and in accordance with applicable Federal and State 
law.’’; 
(5) by striking subsection (f); 
(6) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health and substance use disorder 
benefits’’ each place it appears in subsections 
(a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and (a)(2)(C); 
and 
(7) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health or substance use disorder 
benefits’’ each place it appears (other than in any 
provision amended by the previous paragraph). 
(d) REGULATIONS.—Not later than 1 year after the 
date of enactment of this Act, the Secretaries of Labor, 
Health and Human Services, and the Treasury shall issue 
regulations to carry out the amendments made by sub-
sections (a), (b), and (c), respectively. 
(e) EFFECTIVE DATE.— 
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(1) IN GENERAL.—The amendments made by 
this section shall apply with respect to group health 
plans for plan years beginning after the date that is 
1 year after the date of enactment of this Act, re-
gardless of whether regulations have been issued to 
carry out such amendments by such effective date, 
except that the amendments made by subsections 
(a)(5), (b)(5), and (c)(5), relating to striking of cer-
tain sunset provisions, shall take effect on January 
1, 2009. 
(2) SPECIAL
RULE
FOR
COLLECTIVE
BAR-
GAINING
AGREEMENTS.—In the case of a group 
health plan maintained pursuant to one or more col-
lective bargaining agreements between employee rep-
resentatives and one or more employers ratified be-
fore the date of the enactment of this Act, the 
amendments made by this section shall not apply to 
plan years beginning before the later of— 
(A) the date on which the last of the col-
lective bargaining agreements relating to the 
plan terminates (determined without regard to 
any extension thereof agreed to after the date 
of the enactment of this Act), or 
(B) January 1, 2009. 
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For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining 
agreement relating to the plan which amends the 
plan solely to conform to any requirement added by 
this section shall not be treated as a termination of 
such collective bargaining agreement. 
(f) ASSURING COORDINATION.—The Secretary of 
Health and Human Services, the Secretary of Labor, and 
the Secretary of the Treasury may ensure, through the 
execution or revision of an interagency memorandum of 
understanding among such Secretaries, that— 
(1) regulations, rulings, and interpretations 
issued by such Secretaries relating to the same mat-
ter over which two or more such Secretaries have re-
sponsibility under this section (and the amendments 
made by this section) are administered so as to have 
the same effect at all times; and 
(2) coordination of policies relating to enforcing 
the same requirements through such Secretaries in 
order to have a coordinated enforcement strategy 
that avoids duplication of enforcement efforts and 
assigns priorities in enforcement. 
(g) CONFORMING CLERICAL AMENDMENTS.— 
(1) ERISA HEADING.— 
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(A) IN GENERAL.—The heading of section 
712 of the Employee Retirement Income Secu-
rity Act of 1974 is amended to read as follows: 
‘‘SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE 
USE DISORDER BENEFITS.’’. 
(B) CLERICAL AMENDMENT.—The table of 
contents in section 1 of such Act is amended by 
striking the item relating to section 712 and in-
serting the following new item: 
‘‘Sec. 712. Parity in mental health and substance use disorder benefits.’’. 
(2) PHSA HEADING.—The heading of section 
2705 of the Public Health Service Act is amended 
to read as follows: 
‘‘SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE 
USE DISORDER BENEFITS.’’. 
(3) IRC HEADING.— 
(A) IN GENERAL.—The heading of section 
9812 of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE 
USE DISORDER BENEFITS.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for subchapter B of chapter 100 of 
such Code is amended by striking the item re-
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lating to section 9812 and inserting the fol-
lowing new item: 
‘‘Sec. 9812. Parity in mental health and substance use disorder benefits.’’. 
(h) GAO STUDY ON COVERAGE AND EXCLUSION OF 
MENTAL HEALTH AND SUBSTANCE USE DISORDER DIAG-
NOSES.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study that ana-
lyzes the specific rates, patterns, and trends in cov-
erage and exclusion of specific mental health and 
substance use disorder diagnoses by health plans 
and health insurance. The study shall include an 
analysis of— 
(A) specific coverage rates for all mental 
health conditions and substance use disorders; 
(B) which diagnoses are most commonly 
covered or excluded; 
(C) whether implementation of this Act 
has affected trends in coverage or exclusion of 
such diagnoses; and 
(D) the impact of covering or excluding 
specific diagnoses on participants’ and enroll-
ees’ health, their health care coverage, and the 
costs of delivering health care. 
(2) REPORTS.—Not later than 3 years after the 
date of the enactment of this Act, and 2 years after 
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the date of submission the first report under this 
paragraph, the Comptroller General shall submit to 
Congress a report on the results of the study con-
ducted under paragraph (1). 
SEC. 3. DELAY IN APPLICATION OF WORLDWIDE ALLOCA-
TION OF INTEREST. 
(a) IN GENERAL.—Paragraphs (5)(D) and (6) of sec-
tion 864(f) of the Internal Revenue Code of 1986 are each 
amended by striking ‘‘December 31, 2010’’ and inserting 
‘‘December 31, 2012’’. 
(b) TRANSITION.—Paragraph (7) of section 864(f) of 
such Code is amended by striking ‘‘30 percent’’ and in-
serting ‘‘85 percent’’. 
Passed the House of Representatives September 23, 
2008. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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