‘‘(I) a breakdown of States by the 
size and any type of employers submit-
ting such notification; and 
‘‘(II) a summary of the data re-
ceived under clause (ii). 
‘‘(G) NO IMPACT ON APPLICATION OF STATE 
LAW.—The fact that a plan or coverage is ex-
empt from the provisions of this section under 
subparagraph (A) shall not affect the application 
of State law to such plan or coverage.’’. 
(g) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY-
ERS.—Subsection (c)(1)(B) of such section is amended— 
(1) by inserting ‘‘(or 1 in the case of an em-
ployer residing in a State that permits small groups 
to include a single individual)’’ after ‘‘at least 2’’ the 
first place it appears; and 
(2) by striking ‘‘and who employs at least 2 em-
ployees on the first day of the plan year’’. 
(h) ELIMINATION OF SUNSET PROVISION.—Such sec-
tion is amended by striking subsection (f). 
(i) CLARIFICATION REGARDING PREEMPTION.—Such 
section is further amended by inserting after subsection (e) 
the following new subsection: 
‘‘(f) PREEMPTION, RELATION TO STATE LAWS.— 
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‘‘(1) IN GENERAL.—This part shall not be con-
strued to supersede any provision of State law which 
establishes, implements, or continues in effect any 
consumer protections, benefits, methods of access to 
benefits, rights, external review programs, or remedies 
solely relating to health insurance issuers in connec-
tion with group health insurance coverage (including 
benefit mandates or regulation of group health plans 
of 50 or fewer employees) except to the extent that 
such provision prevents the application of a require-
ment of this part. 
‘‘(2) CONTINUED PREEMPTION WITH RESPECT TO 
GROUP HEALTH PLANS.—Nothing in this section shall 
be construed to affect or modify the provisions of sec-
tion 514 with respect to group health plans. 
‘‘(3) OTHER STATE LAWS.—Nothing in this sec-
tion shall be construed to exempt or relieve any per-
son from any laws of any State not solely related to 
health insurance issuers in connection with group 
health coverage insofar as they may now or hereafter 
relate to insurance, health plans, or health cov-
erage.’ ’’. 
(j) CONFORMING AMENDMENTS TO HEADING.— 
(1) IN GENERAL.—The heading of such section is 
amended to read as follows: 
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‘‘SEC. 712. EQUITY IN MENTAL HEALTH AND SUBSTANCE- 
RELATED DISORDER BENEFITS.’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of such Act is amended by striking 
the item relating to section 712 and inserting the fol-
lowing new item: 
‘‘Sec. 712. Equity in mental health and substance-related disorder benefits.’’. 
(k) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendments made by 
this section shall apply with respect to plan years be-
ginning on or after January 1, 2008. 
(2) SPECIAL RULE FOR COLLECTIVE BARGAINING 
AGREEMENTS.—In the case of a group health plan 
maintained pursuant to one or more collective bar-
gaining agreements between employee representatives 
and one or more employers ratified before 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 collec-
tive 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, 2010. 
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For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining agree-
ment relating to the plan which amends the plan sole-
ly to conform to any requirement imposed under an 
amendment under this section shall not be treated as 
a termination of such collective bargaining agree-
ment. 
(l) DOL ANNUAL SAMPLE COMPLIANCE.—The Sec-
retary of Labor shall annually sample and conduct random 
audits of group health plans (and health insurance coverage 
offered in connection with such plans) in order to determine 
their compliance with the amendments made by this Act 
and shall submit to the appropriate committees of Congress 
an annual report on such compliance with such amend-
ments. 
(m) ASSISTANCE
TO
PARTICIPANTS
AND
BENE-
FICIARIES.—The Secretary of Labor shall provide assist-
ance to participants and beneficiaries of group health plans 
with any questions or problems with compliance with the 
requirements of this Act. The Secretary shall notify partici-
pants and beneficiaries when they can obtain assistance 
from State consumer and insurance agencies and the Sec-
retary shall coordinate with State agencies to ensure that 
participants and beneficiaries are protected and afforded 
the rights provided under this Act. 
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SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE 
ACT RELATING TO THE GROUP MARKET. 
(a) EXTENSION OF PARITY TO TREATMENT LIMITS 
AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 
2705 of the Public Health Service Act (42 U.S.C. 300gg– 
5) is amended— 
(1) in subsection (a), by adding at the end the 
following new paragraphs: 
‘‘(3) TREATMENT LIMITS.— 
‘‘(A) NO TREATMENT LIMIT.—If the plan or 
coverage does not include a treatment limit (as 
defined in subparagraph (D)) on substantially 
all medical and surgical benefits in any category 
of items or services (specified in subparagraph 
(C)), the plan or coverage may not impose any 
treatment limit on mental health and substance- 
related disorder benefits that are classified in the 
same category of items or services. 
‘‘(B) TREATMENT
LIMIT.—If the plan or 
coverage includes a treatment limit on substan-
tially all medical and surgical benefits in any 
category of items or services, the plan or coverage 
may not impose such a treatment limit on men-
tal health and substance-related disorder benefits 
for items and services within such category that 
are more restrictive than the predominant treat-
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ment limit that is applicable to medical and sur-
gical benefits for items and services within such 
category. 
‘‘(C) CATEGORIES OF ITEMS AND SERVICES 
FOR APPLICATION OF TREATMENT LIMITS AND 
BENEFICIARY
FINANCIAL
REQUIREMENTS.—For 
purposes of this paragraph and paragraph (4), 
there shall be the following four categories of 
items and services for benefits, whether medical 
and surgical benefits or mental health and sub-
stance-related disorder benefits, and all medical 
and surgical benefits and all mental health and 
substance related benefits shall be classified into 
one of the following categories: 
‘‘(i) INPATIENT, IN-NETWORK.—Items 
and services furnished on an inpatient basis 
and within a network of providers estab-
lished or recognized under such plan or cov-
erage. 
‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 
Items and services furnished on an inpa-
tient basis and outside any network of pro-
viders established or recognized under such 
plan or coverage. 
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‘‘(iii) 
OUTPATIENT, 
IN-NETWORK.— 
Items and services furnished on an out-
patient basis and within a network of pro-
viders established or recognized under such 
plan or coverage. 
‘‘(iv) 
OUTPATIENT, 
OUT-OF-NET-
WORK.—Items and services furnished on an 
outpatient basis and outside any network of 
providers established or recognized under 
such plan or coverage. 
‘‘(D) TREATMENT
LIMIT
DEFINED.—For 
purposes of this paragraph, the term ‘treatment 
limit’ means, with respect to a plan or coverage, 
limitation on the frequency of treatment, number 
of visits or days of coverage, or other similar 
limit on the duration or scope of treatment 
under the plan or coverage. 
‘‘(E) PREDOMINANCE.—For purposes of this 
subsection, a treatment limit or financial re-
quirement with respect to a category of items 
and services is considered to be predominant if 
it is the most common or frequent of such type 
of limit or requirement with respect to such cat-
egory of items and services. 
‘‘(4) BENEFICIARY FINANCIAL REQUIREMENTS.— 
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‘‘(A) NO BENEFICIARY FINANCIAL REQUIRE-
MENT.—If the plan or coverage does not include 
a beneficiary financial requirement (as defined 
in subparagraph (C)) on substantially all med-
ical and surgical benefits within a category of 
items and services (specified in paragraph 
(3)(C)), the plan or coverage may not impose 
such a beneficiary financial requirement on 
mental health and substance-related disorder 
benefits for items and services within such cat-
egory. 
‘‘(B) BENEFICIARY
FINANCIAL
REQUIRE-
MENT.— 
‘‘(i) TREATMENT
OF
DEDUCTIBLES, 
OUT-OF-POCKET
LIMITS, AND
SIMILAR
FI-
NANCIAL
REQUIREMENTS.—If the plan or 
coverage includes a deductible, a limitation 
on out-of-pocket expenses, or similar bene-
ficiary financial requirement that does not 
apply separately to individual items and 
services on substantially all medical and 
surgical benefits within a category of items 
and services, the plan or coverage shall 
apply such requirement (or, if there is more 
than one such requirement for such category 
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smartinez on PRODPC61 with BILLS
of items and services, the predominant re-
quirement for such category) both to med-
ical and surgical benefits within such cat-
egory and to mental health and substance- 
related disorder benefits within such cat-
egory and shall not distinguish in the ap-
plication of such requirement between such 
medical and surgical benefits and such 
mental health and substance-related dis-
order benefits. 
‘‘(ii) 
OTHER
FINANCIAL
REQUIRE-
MENTS.—If the plan or coverage includes a 
beneficiary financial requirement not de-
scribed in clause (i) on substantially all 
medical and surgical benefits within a cat-
egory of items and services, the plan or cov-
erage may not impose such financial re-
quirement on mental health and substance- 
related disorder benefits for items and serv-
ices within such category in a way that is 
more costly to the participant or beneficiary 
than the predominant beneficiary financial 
requirement applicable to medical and sur-
gical benefits for items and services within 
such category. 
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‘‘(C) BENEFICIARY
FINANCIAL
REQUIRE-
MENT
DEFINED.—For purposes of this para-
graph, the term ‘beneficiary financial require-
ment’ includes, with respect to a plan or cov-
erage, any deductible, coinsurance, co-payment, 
other cost sharing, and limitation on the total 
amount that may be paid by a participant or 
beneficiary with respect to benefits under the 
plan or coverage, but does not include the appli-
cation of any aggregate lifetime limit or annual 
limit.’’; and 
(2) in subsection (b)— 
(A) by striking ‘‘construed—’’ and all that 
follows through ‘‘(1) as requiring’’ and inserting 
‘‘construed as requiring’’; 
(B) by striking ‘‘; or’’ and inserting a pe-
riod; and 
(C) by striking paragraph (2). 
(b) EXPANSION TO SUBSTANCE-RELATED DISORDER 
BENEFITS AND REVISION OF DEFINITION.—Such section is 
further amended— 
(1) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health and substance-related disorder 
benefits’’ each place it appears; and 
(2) in paragraph (4) of subsection (e)— 
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(A) by striking ‘‘MENTAL HEALTH BENE-
FITS’’ and inserting ‘‘MENTAL
HEALTH
AND 
SUBSTANCE-RELATED DISORDER BENEFITS’’; 
(B) by striking ‘‘benefits with respect to 
mental health services’’ and inserting ‘‘benefits 
with respect to services for mental health condi-
tions or substance-related disorders’’; and 
(C) by striking ‘‘, but does not include bene-
fits with respect to treatment of substances abuse 
or chemical dependency’’. 
(c) AVAILABILITY OF PLAN INFORMATION ABOUT CRI-
TERIA FOR MEDICAL NECESSITY.—Subsection (a) of such 
section, as amended by subsection (a)(1), is further amend-
ed by adding at the end the following new paragraph: 
‘‘(5) AVAILABILITY OF PLAN INFORMATION.—The 
criteria for medical necessity determinations made 
under the plan with respect to mental health and sub-
stance-related disorder benefits (or the health insur-
ance coverage offered in connection with the plan 
with respect to such benefits) shall be made available 
by the plan administrator (or the health insurance 
issuer offering such coverage) to any current or poten-
tial participant, beneficiary, or contracting provider 
upon request. The reason for any denial under the 
plan (or coverage) of reimbursement or payment for 
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services with respect to mental health and substance- 
related disorder benefits in the case of any partici-
pant or beneficiary shall, upon request, be made 
available by the plan administrator (or the health in-
surance issuer offering such coverage) to the partici-
pant or beneficiary.’’. 
(d) MINIMUM BENEFIT REQUIREMENTS.—Subsection 
(a) of such section is further amended by adding at the end 
the following new paragraph: 
‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQUITY 
IN OUT-OF-NETWORK BENEFITS.— 
‘‘(A) MINIMUM SCOPE OF MENTAL HEALTH 
AND
SUBSTANCE-RELATED
DISORDER
BENE-
FITS.—In the case of a group health plan (or 
health insurance coverage offered in connection 
with such a plan) that provides any mental 
health and substance-related disorder benefits, 
the plan or coverage shall include benefits for 
any mental health condition or substance-related 
disorder for which benefits are provided under 
the benefit plan option offered under chapter 89 
of title 5, United States Code, with the highest 
average enrollment as of the beginning of the 
most recent year beginning on or before the be-
ginning of the plan year involved. 
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‘‘(B) EQUITY IN COVERAGE OF OUT-OF-NET-
WORK BENEFITS.— 
‘‘(i) IN GENERAL.—In the case of a 
plan or coverage that provides both medical 
and surgical benefits and mental health and 
substance-related disorder benefits, if med-
ical and surgical benefits are provided for 
substantially all items and services in a 
category specified in clause (ii) furnished 
outside any network of providers established 
or recognized under such plan or coverage, 
the mental health and substance-related dis-
order benefits shall also be provided for 
items and services in such category fur-
nished outside any network of providers es-
tablished or recognized under such plan or 
coverage in accordance with the require-
ments of this section. 
‘‘(ii) CATEGORIES
OF
ITEMS
AND 
SERVICES.—For purposes of clause (i), there 
shall be the following three categories of 
items and services for benefits, whether med-
ical and surgical benefits or mental health 
and substance-related disorder benefits, and 
all medical and surgical benefits and all 
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mental health and substance-related dis-
order benefits shall be classified into one of 
the following categories: 
‘‘(I) 
EMERGENCY.—Items 
and 
services, whether furnished on an inpa-
tient or outpatient basis, required for 
the treatment of an emergency medical 
condition (including an emergency 
condition relating to mental health 
and substance-related disorders). 
‘‘(II) 
INPATIENT.—Items 
and 
services not described in subclause (I) 
furnished on an inpatient basis. 
‘‘(III) OUTPATIENT.—Items and 
services not described in subclause (I) 
furnished on an outpatient basis.’’. 
(e) REVISION
OF INCREASED COST EXEMPTION.— 
Paragraph (2) of subsection (c) of such section is amended 
to read as follows: 
‘‘(2) INCREASED COST EXEMPTION.— 
‘‘(A) IN GENERAL.—With respect to a group 
health plan (or health insurance coverage offered 
in connection with such a plan), if the applica-
tion of this section to such plan (or coverage) re-
sults in an increase for the plan year involved 
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of the actual total costs of coverage with respect 
to medical and surgical benefits and mental 
health and substance-related disorder benefits 
under the plan (as determined and certified 
under subparagraph (C)) by an amount that ex-
ceeds the applicable percentage described in sub-
paragraph (B) of the actual total plan costs, the 
provisions of this section shall not apply to such 
plan (or coverage) during the following plan 
year, and such exemption shall apply to the plan 
(or coverage) for 1 plan year. 
‘‘(B) APPLICABLE PERCENTAGE.—With re-
spect to a plan (or coverage), the applicable per-
centage described in this paragraph shall be— 
‘‘(i) 2 percent in the case of the first 
plan year which begins after the date of the 
enactment of the Paul Wellstone Mental 
Health and Addiction Equity Act of 2007; 
and 
‘‘(ii) 1 percent in the case of each sub-
sequent plan year. 
‘‘(C) DETERMINATIONS
BY
ACTUARIES.— 
Determinations as to increases in actual costs 
under a plan (or coverage) for purposes of this 
subsection shall be made by a qualified actuary 
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who is a member in good standing of the Amer-
ican Academy of Actuaries. Such determinations 
shall be certified by the actuary and be made 
available to the general public. 
‘‘(D) 6-MONTH
DETERMINATIONS.—If a 
group health plan (or a health insurance issuer 
offering coverage in connection with such a plan) 
seeks an exemption under this paragraph, deter-
minations 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.—A group health plan 
under this part shall comply with the notice re-
quirement under section 712(c)(2)(E) of the Em-
ployee Retirement Income Security Act of 1974 
with respect to the a modification of mental 
health and substance-related disorder benefits as 
permitted under this paragraph as if such sec-
tion applied to such plan.’’. 
(f) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY-
ERS.—Subsection (c)(1)(B) of such section is amended— 
(1) by inserting ‘‘(or 1 in the case of an em-
ployer residing in a State that permits small groups 
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to include a single individual)’’ after ‘‘at least 2’’ the 
first place it appears; and 
(2) by striking ‘‘and who employs at least 2 em-
ployees on the first day of the plan year’’. 
(g) ELIMINATION OF SUNSET PROVISION.—Such sec-
tion is amended by striking out subsection (f). 
(h) CLARIFICATION REGARDING PREEMPTION.—Such 
section is further amended by inserting after subsection (e) 
the following new subsection: 
‘‘(f) PREEMPTION, RELATION TO STATE LAWS.— 
‘‘(1) IN GENERAL.—Nothing in this section shall 
be construed to preempt any State law that provides 
greater consumer protections, benefits, methods of ac-
cess to benefits, rights or remedies that are greater 
than the protections, benefits, methods of access to 
benefits, rights or remedies provided under this sec-
tion. 
‘‘(2) CONSTRUCTION.—Nothing in this section 
shall be construed to affect or modify the provisions 
of section 2723 with respect to group health plans.’’. 
(i) CONFORMING AMENDMENT
TO HEADING.—The 
heading of such section is amended to read as follows: 
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smartinez on PRODPC61 with BILLS
‘‘SEC. 2705.’’. 
(j) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to plan years beginning on 
or after January 1, 2008. 
SEC. 4. AMENDMENTS TO THE INTERNAL REVENUE CODE 
OF 1986. 
(a) EXTENSION OF PARITY TO TREATMENT LIMITS 
AND BENEFICIARY FINANCIAL REQUIREMENTS.—Section 
9812 of the Internal Revenue Code of 1986 is amended— 
(1) in subsection (a), by adding at the end the 
following new paragraphs: 
‘‘(3) TREATMENT LIMITS.— 
‘‘(A) NO TREATMENT LIMIT.—If the plan 
does not include a treatment limit (as defined in 
subparagraph (D)) on substantially all medical 
and surgical benefits in any category of items or 
services (specified in subparagraph (C)), the 
plan may not impose any treatment limit on 
mental health and substance-related disorder 
benefits that are classified in the same category 
of items or services. 
‘‘(B) TREATMENT LIMIT.—If the plan in-
cludes a treatment limit on substantially all 
medical and surgical benefits in any category of 
items or services, the plan may not impose such 
a treatment limit on mental health and sub-
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stance-related disorder benefits for items and 
services within such category that are more re-
strictive than the predominant treatment limit 
that is applicable to medical and surgical bene-
fits for items and services within such category. 
‘‘(C) CATEGORIES OF ITEMS AND SERVICES 
FOR APPLICATION OF TREATMENT LIMITS AND 
BENEFICIARY
FINANCIAL
REQUIREMENTS.—For 
purposes of this paragraph and paragraph (4), 
there shall be the following four categories of 
items and services for benefits, whether medical 
and surgical benefits or mental health and sub-
stance-related disorder benefits, and all medical 
and surgical benefits and all mental health and 
substance related benefits shall be classified into 
one of the following categories: 
‘‘(i) INPATIENT, IN-NETWORK.—Items 
and services furnished on an inpatient basis 
and within a network of providers estab-
lished or recognized under such plan or cov-
erage. 
‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 
Items and services furnished on an inpa-
tient basis and outside any network of pro-
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smartinez on PRODPC61 with BILLS
viders established or recognized under such 
plan or coverage. 
‘‘(iii) 
OUTPATIENT, 
IN-NETWORK.— 
Items and services furnished on an out-
patient basis and within a network of pro-
viders established or recognized under such 
plan or coverage. 
‘‘(iv) 
OUTPATIENT, 
OUT-OF-NET-
WORK.—Items and services furnished on an 
outpatient basis and outside any network of 
providers established or recognized under 
such plan or coverage. 
‘‘(D) TREATMENT
LIMIT
DEFINED.—For 
purposes of this paragraph, the term ‘treatment 
limit’ means, with respect to a plan, limitation 
on the frequency of treatment, number of visits 
or days of coverage, or other similar limit on the 
duration or scope of treatment under the plan. 
‘‘(E) PREDOMINANCE.—For purposes of this 
subsection, a treatment limit or financial re-
quirement with respect to a category of items 
and services is considered to be predominant if 
it is the most common or frequent of such type 
of limit or requirement with respect to such cat-
egory of items and services. 
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‘‘(4) BENEFICIARY FINANCIAL REQUIREMENTS.— 
‘‘(A) NO BENEFICIARY FINANCIAL REQUIRE-
MENT.—If the plan does not include a bene-
ficiary financial requirement (as defined in sub-
paragraph (C)) on substantially all medical and 
surgical benefits within a category of items and 
services (specified in paragraph (3)(C)), the plan 
may not impose such a beneficiary financial re-
quirement on mental health and substance-re-
lated disorder benefits for items and services 
within such category. 
‘‘(B) BENEFICIARY
FINANCIAL
REQUIRE-
MENT.— 
‘‘(i) TREATMENT
OF
DEDUCTIBLES, 
OUT-OF-POCKET
LIMITS, AND
SIMILAR
FI-
NANCIAL
REQUIREMENTS.—If the plan or 
coverage includes a deductible, a limitation 
on out-of-pocket expenses, or similar bene-
ficiary financial requirement that does not 
apply separately to individual items and 
services on substantially all medical and 
surgical benefits within a category of items 
and services, the plan or coverage shall 
apply such requirement (or, if there is more 
than one such requirement for such category 
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smartinez on PRODPC61 with BILLS
of items and services, the predominant re-
quirement for such category) both to med-
ical and surgical benefits within such cat-
egory and to mental health and substance- 
related disorder benefits within such cat-
egory and shall not distinguish in the ap-
plication of such requirement between such 
medical and surgical benefits and such 
mental health and substance-related dis-
order benefits. 
‘‘(ii) 
OTHER
FINANCIAL
REQUIRE-
MENTS.—If the plan includes a beneficiary 
financial requirement not described in 
clause (i) on substantially all medical and 
surgical benefits within a category of items 
and services, the plan may not impose such 
financial requirement on mental health and 
substance-related disorder benefits for items 
and services within such category in a way 
that is more costly to the participant or 
beneficiary than the predominant bene-
ficiary financial requirement applicable to 
medical and surgical benefits for items and 
services within such category. 
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‘‘(C) BENEFICIARY
FINANCIAL
REQUIRE-
MENT
DEFINED.—For purposes of this para-
graph, the term ‘beneficiary financial require-
ment’ includes, with respect to a plan, any de-
ductible, coinsurance, co-payment, other cost 
sharing, and limitation on the total amount that 
may be paid by a participant or beneficiary 
with respect to benefits under the plan, but does 
not include the application of any aggregate life-
time limit or annual limit.’’; and 
(2) in subsection (b)— 
(A) by striking ‘‘construed—’’ and all that 
follows through ‘‘(1) as requiring’’ and inserting 
‘‘construed as requiring’’; 
(B) by striking ‘‘; or’’ and inserting a pe-
riod; and 
(C) by striking paragraph (2). 
(b) EXPANSION TO SUBSTANCE-RELATED DISORDER 
BENEFITS AND REVISION OF DEFINITION.—Such section is 
further amended— 
(1) by striking ‘‘mental health benefits’’ and in-
serting ‘‘mental health and substance-related disorder 
benefits’’ each place it appears; and 
(2) in paragraph (4) of subsection (e)— 
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(A) by striking ‘‘MENTAL HEALTH BENE-
FITS’’ in the heading and inserting ‘‘MENTAL 
HEALTH
AND
SUBSTANCE-RELATED
DISORDER 
BENEFITS’’; 
(B) by striking ‘‘benefits with respect to 
mental health services’’ and inserting ‘‘benefits 
with respect to services for mental health condi-
tions or substance-related disorders’’; and 
(C) by striking ‘‘, but does not include bene-
fits with respect to treatment of substances abuse 
or chemical dependency’’. 
(c) AVAILABILITY OF PLAN INFORMATION ABOUT CRI-
TERIA FOR MEDICAL NECESSITY.—Subsection (a) of such 
section, as amended by subsection (a)(1), is further amend-
ed by adding at the end the following new paragraph: 
‘‘(5) AVAILABILITY OF PLAN INFORMATION.—The 
criteria for medical necessity determinations made 
under the plan with respect to mental health and sub-
stance-related disorder benefits shall be made avail-
able by the plan administrator to any current or po-
tential participant, beneficiary, or contracting pro-
vider upon request. The reason for any denial under 
the plan of reimbursement or payment for services 
with respect to mental health and substance-related 
disorder benefits in the case of any participant or 
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beneficiary shall, upon request, be made available by 
the plan administrator to the participant or bene-
ficiary.’’. 
(d) MINIMUM BENEFIT REQUIREMENTS.—Subsection 
(a) of such section is further amended by adding at the end 
the following new paragraph: 
‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQUITY 
IN OUT-OF-NETWORK BENEFITS.— 
‘‘(A) MINIMUM SCOPE OF MENTAL HEALTH 
AND
SUBSTANCE-RELATED
DISORDER
BENE-
FITS.—In the case of a group health plan (or 
health insurance coverage offered in connection 
with such a plan) that provides any mental 
health and substance-related disorder benefits, 
the plan or coverage shall include benefits for 
any mental health condition or substance-related 
disorder for which benefits are provided under 
the benefit plan option offered under chapter 89 
of title 5, United States Code, with the highest 
average enrollment as of the beginning of the 
most recent year beginning on or before the be-
ginning of the plan year involved. 
‘‘(B) EQUITY IN COVERAGE OF OUT-OF-NET-
WORK BENEFITS.— 
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‘‘(i) IN GENERAL.—In the case of a 
plan that provides both medical and sur-
gical benefits and mental health and sub-
stance-related disorder benefits, if medical 
and surgical benefits are provided for sub-
stantially all items and services in a cat-
egory specified in clause (ii) furnished out-
side any network of providers established or 
recognized under such plan or coverage, the 
mental health and substance-related dis-
order benefits shall also be provided for 
items and services in such category fur-
nished outside any network of providers es-
tablished or recognized under such plan in 
accordance with the requirements of this 
section. 
‘‘(ii) CATEGORIES
OF
ITEMS
AND 
SERVICES.—For purposes of clause (i), there 
shall be the following three categories of 
items and services for benefits, whether med-
ical and surgical benefits or mental health 
and substance-related disorder benefits, and 
all medical and surgical benefits and all 
mental health and substance-related dis-
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order benefits shall be classified into one of 
the following categories: 
‘‘(I) 
EMERGENCY.—Items 
and 
services, whether furnished on an inpa-
tient or outpatient basis, required for 
the treatment of an emergency medical 
condition (including an emergency 
condition relating to mental health 
and substance-related disorders). 
‘‘(II) 
INPATIENT.—Items 
and 
services not described in subclause (I) 
furnished on an inpatient basis. 
‘‘(III) OUTPATIENT.—Items and 
services not described in subclause (I) 
furnished on an outpatient basis.’’. 
(e) REVISION
OF INCREASED COST EXEMPTION.— 
Paragraph (2) of subsection (c) of such section is amended 
to read as follows: 
‘‘(2) INCREASED COST EXEMPTION.— 
‘‘(A) IN GENERAL.—With respect to a group 
health plan, if the application of this section 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-related disorder 
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benefits under the plan (as determined and cer-
tified 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 following plan 
year, and such exemption shall apply to the plan 
for 1 plan year. 
‘‘(B) APPLICABLE PERCENTAGE.—With re-
spect to a plan, the applicable percentage de-
scribed in this paragraph shall be— 
‘‘(i) 2 percent in the case of the first 
plan year which begins after the date of the 
enactment of the Paul Wellstone Mental 
Health and Addiction Equity Act of 2007; 
and 
‘‘(ii) 1 percent in the case of each sub-
sequent plan year. 
‘‘(C) DETERMINATIONS
BY
ACTUARIES.— 
Determinations as to increases in actual costs 
under a plan for purposes of this subsection shall 
be made by a qualified actuary who is a member 
in good standing of the American Academy of 
Actuaries. Such determinations shall be certified 
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smartinez on PRODPC61 with BILLS
by the actuary and be made available to the gen-
eral public. 
‘‘(D) 6-MONTH
DETERMINATIONS.—If a 
group health plan seeks an exemption under this 
paragraph, determinations under subparagraph 
(A) shall be made after such plan has complied 
with this section for the first 6 months of the 
plan year involved.’’. 
(f) CHANGE IN EXCLUSION FOR SMALLEST EMPLOY-
ERS.—Subsection (c)(1) of such section is amended 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. 
‘‘(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 employer 
residing in a State that permits small groups to 
include a single individual) but not more than 
50 employees on business days during the pre-
ceding calendar year. For purposes of the pre-
ceding sentence, all persons treated as a single 
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smartinez on PRODPC61 with BILLS
employer under subsection (b), (c), (m), or (o) of 
section 414 shall be treated as 1 employer and 
rules similar to rules of subparagraphs (B) and 
(C) of section 4980D(d)(2) shall apply.’’. 
(g) ELIMINATION OF SUNSET PROVISION.—Such sec-
tion is amended by striking subsection (f). 
(h) CONFORMING AMENDMENTS TO HEADING.— 
(1) IN GENERAL.—The heading of such section is 
amended to read as follows: 
‘‘SEC. 9812.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 100 of the Internal 
Revenue Code of 1986 is amended by striking the item 
relating to section 9812 and inserting the following 
new item: 
‘‘Sec. 9812. Equity in mental health and substance-related disorder benefits.’’. 
(i) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to plan years beginning on 
or after January 1, 2008. 
SEC. 5. STUDIES AND REPORTS. 
(a) IMPLEMENTATION OF ACT.— 
(1) GAO STUDY.—The Comptroller General of 
the United States shall conduct a study that evaluates 
the effect of the implementation of the amendments 
made by this Act on— 
(A) the cost of health insurance coverage; 
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smartinez on PRODPC61 with BILLS
(B) access to health insurance coverage (in-
cluding the availability of in-network providers); 
(C) the quality of health care; 
(D) Medicare, Medicaid, and State and 
local mental health and substance abuse treat-
ment spending; 
(E) the number of individuals with private 
insurance who received publicly funded health 
care for mental health and substance-related dis-
orders; 
(F) spending on public services, such as the 
criminal justice system, special education, and 
income assistance programs; 
(G) the use of medical management of men-
tal health and substance-related disorder benefits 
and medical necessity determinations by group 
health plans (and health insurance issuers offer-
ing health insurance coverage in connection with 
such plans) and timely access by participants 
and beneficiaries to clinically-indicated care for 
mental health and substance-use disorders; and 
(H) other matters as determined appro-
priate by the Comptroller General. 
(2) REPORT.—Not later than 2 years after the 
date of enactment of this Act, the Comptroller General 
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shall prepare and submit to the appropriate commit-
tees of the Congress a report containing the results of 
the study conducted under paragraph (1). 
(b) GAO REPORT ON UNIFORM PATIENT PLACEMENT 
CRITERIA.—Not later than 18 months after the date of the 
enactment of this Act, the Comptroller General shall submit 
to the appropriate committees of each House of the Congress 
a report on availability of uniform patient placement cri-
teria for mental health and substance-related disorders that 
could be used by group health plans and health insurance 
issuers to guide determinations of medical necessity and the 
extent to which health plans utilize such criteria. If such 
criteria do not exist, the report shall include recommenda-
tions on a process for developing such criteria. 
(c) DOL BIANNUAL REPORT ON OBSTACLES IN OB-
TAINING COVERAGE.—Every two years, the Secretary of 
Labor, in consultation with the Secretaries of Health and 
Human Services and the Treasury, shall submit to the ap-
propriate committees of each House of the Congress a report 
on obstacles that individuals face in obtaining mental 
health and substance-related disorder care under their 
health plans. 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as 
the ‘‘Paul Wellstone Mental Health and Addic-
tion Equity Act of 2007’’. 
(b) TABLE OF CONTENTS.—The table of con-
tents of this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Amendments to the Employee Retirement Income Secu-
rity 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. 
SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974. 
(a) EXTENSION
OF PARITY
TO TREATMENT 
LIMITS AND BENEFICIARY FINANCIAL REQUIRE-
MENTS.—Section 712 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1185a) is amended— 
(1) in subsection (a), by adding at the 
end the following new paragraphs: 
‘‘(3) TREATMENT LIMITS.— 
‘‘(A) NO TREATMENT LIMIT.—If the 
plan or coverage does not include a 
treatment limit (as defined in sub-
paragraph (D)) on substantially all 
medical and surgical benefits in any 
category of items or services, the plan 
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or coverage may not impose any 
treatment limit on mental health and 
substance-related disorder benefits 
that are classified in the same cat-
egory of items or services. 
‘‘(B) TREATMENT LIMIT.—If the plan 
or coverage includes a treatment 
limit on substantially all medical and 
surgical benefits in any category of 
items or services, the plan or cov-
erage may not impose such a treat-
ment limit on mental health and sub-
stance-related disorder benefits for 
items and services within such cat-
egory that are more restrictive than 
the predominant treatment limit that 
is applicable to medical and surgical 
benefits for items and services within 
such category. 
‘‘(C) CATEGORIES
OF
ITEMS
AND 
SERVICES
FOR
APPLICATION
OF
TREAT-
MENT
LIMITS
AND
BENEFICIARY
FINAN-
CIAL REQUIREMENTS.—For purposes of 
this paragraph and paragraph (4), 
there shall be the following four cat-
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egories of items and services for ben-
efits, whether medical and surgical 
benefits or mental health and sub-
stance-related disorder benefits, and 
all medical and surgical benefits and 
all mental health and substance re-
lated benefits shall be classified into 
one of the following categories: 
‘‘(i) INPATIENT, IN-NETWORK.— 
Items and services furnished on 
an inpatient basis and within a 
network of providers established 
or recognized under such plan or 
coverage. 
‘‘(ii) 
INPATIENT, 
OUT-OF-NET-
WORK.—Items and services fur-
nished on an inpatient basis and 
outside any network of providers 
established or recognized under 
such plan or coverage. 
‘‘(iii) 
OUTPATIENT, 
IN-NET-
WORK.—Items and services fur-
nished on an outpatient basis and 
within a network of providers es-
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