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 (as specified in paragraph 
(3)(C)), the plan or coverage shall apply 
such requirement (or, if there is more than 
one such requirement for such category 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 
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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 
coverage may not impose such financial re-
quirement 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 bene-
ficiary than the predominant beneficiary fi-
nancial requirement applicable to medical 
and surgical benefits for items and services 
within such category. 
‘‘(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 
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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 insert-
ing ‘‘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 dis-
order benefits’’ each place it appears; and 
(2) in paragraph (4) of subsection (e)— 
(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 
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(C) by striking ‘‘, but does not include 
benefits with respect to treatment of substances 
abuse or chemical dependency’’. 
(c) AVAILABILITY OF PLAN INFORMATION ABOUT 
CRITERIA FOR MEDICAL NECESSITY.—Subsection (a) of 
such section, as amended by subsection (a)(1), is further 
amended by adding at the end the following new para-
graph: 
‘‘(5) AVAILABILITY OF PLAN INFORMATION.— 
The criteria for medical necessity determinations 
made under the plan with respect to mental health 
and substance-related disorder benefits (or the 
health insurance coverage offered in connection with 
the plan with respect to such benefits) shall be made 
available by the plan administrator (or the health in-
surance issuer offering such coverage) to any cur-
rent or potential participant, beneficiary, or con-
tracting provider upon request. The reason for any 
denial under the plan (or coverage) of reimburse-
ment or payment for services with respect to mental 
health and substance-related disorder benefits in the 
case of any participant or beneficiary shall, upon re-
quest, be made available by the plan administrator 
(or the health insurance issuer offering such cov-
erage) to the participant or beneficiary.’’. 
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(d) 
MINIMUM
BENEFIT
REQUIREMENTS.—Sub-
section (a) of such section is further amended by adding 
at the end the following new paragraph: 
‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQ-
UITY IN OUT-OF-NETWORK BENEFITS.— 
‘‘(A) 
MINIMUM
SCOPE
OF
MENTAL 
HEALTH AND SUBSTANCE-RELATED DISORDER 
BENEFITS.—In the case of a group health plan 
(or health insurance coverage offered in connec-
tion 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-re-
lated 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 begin-
ning of the most recent year beginning on or 
before the beginning of the plan year involved. 
‘‘(B) EQUITY
IN
COVERAGE
OF
OUT-OF- 
NETWORK BENEFITS.— 
‘‘(i) IN GENERAL.—In the case of a 
plan or coverage that provides both med-
ical and surgical benefits and mental 
health and substance-related disorder bene-
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fits, if medical and surgical benefits are 
provided for substantially all items and 
services in a category specified in clause 
(ii) furnished outside any network of pro-
viders established or recognized under such 
plan or coverage, the mental health and 
substance-related disorder benefits shall 
also be provided for items and services in 
such category furnished outside any net-
work of providers established or recognized 
under such plan or coverage 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 
medical and surgical benefits or mental 
health and substance-related disorder bene-
fits, and all medical and surgical benefits 
and all mental health and substance-re-
lated disorder benefits shall be classified 
into one of the following categories: 
‘‘(I) EMERGENCY.—Items and 
services, whether furnished on an in-
patient or outpatient basis, required 
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for the treatment of an emergency 
medical condition (including an emer-
gency condition relating to mental 
health 
and 
substance-related 
dis-
orders). 
‘‘(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 
application of this section to such plan (or cov-
erage) 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 dis-
order benefits under the plan (as determined 
and certified under subparagraph (C)) by an 
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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 (or coverage) dur-
ing 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 
percentage 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 Men-
tal Health and Addiction Equity Act of 
2007; 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 (or coverage) for purposes of this 
subsection shall be made by a qualified actuary 
who is a member in good standing of the Amer-
ican Academy of Actuaries. Such determina-
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tions 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, 
determinations under subparagraph (A) shall be 
made after such plan (or coverage) has com-
plied with this section for the first 6 months of 
the plan year involved. 
‘‘(E) NOTIFICATION.—An election to mod-
ify coverage of mental health and substance-re-
lated disorder benefits as permitted under this 
paragraph shall be treated as a material modi-
fication in the terms of the plan as described in 
section 102(a)(1) and shall be subject to the 
applicable notice requirements under section 
104(b)(1).’’. 
(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 
to include a single individual)’’ after ‘‘at least 2’’ the 
first place it appears; and 
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(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 sub-
section (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 access to benefits, rights or remedies 
that are greater than the protections, benefits, meth-
ods of access to benefits, rights or remedies provided 
under this section. 
‘‘(2) ERISA.—Nothing in this section shall be 
construed to affect or modify the provisions of sec-
tion 514 with respect to group health plans.’’. 
(i) CONFORMING AMENDMENTS TO HEADING.— 
(1) IN GENERAL.—The heading of such section 
is amended to read as follows: 
‘‘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 
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the item relating to section 712 and inserting the 
following new item: 
‘‘Sec. 712. Equity in mental health and substance-related disorder benefits.’’. 
(j) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan years begin-
ning on or after January 1, 2008. 
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 substan-
tially all medical and surgical benefits in any 
category of items or services (specified in sub-
paragraph (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 serv-
ices. 
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‘‘(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 cov-
erage may not impose such a treatment limit on 
mental health and substance-related disorder 
benefits for items and services within such cat-
egory that are more restrictive than the pre-
dominant treatment limit that is applicable to 
medical and surgical benefits for items and 
services within such category. 
‘‘(C) CATEGORIES
OF
ITEMS
AND
SERV-
ICES FOR APPLICATION OF TREATMENT LIMITS 
AND
BENEFICIARY
FINANCIAL
REQUIRE-
MENTS.—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 substance-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 cat-
egories: 
‘‘(i) INPATIENT, IN-NETWORK.—Items 
and services furnished on an inpatient 
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basis and within a network of providers es-
tablished or recognized under such plan or 
coverage. 
‘‘(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. 
‘‘(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 net-
work 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, num-
ber of visits or days of coverage, or other simi-
lar limit on the duration or scope of treatment 
under the plan or coverage. 
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‘‘(E) PREDOMINANCE.—For purposes of 
this subsection, a treatment limit or financial 
requirement 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
REQUIRE-
MENTS.— 
‘‘(A) NO
BENEFICIARY
FINANCIAL
RE-
QUIREMENT.—If the plan or coverage does not 
include a beneficiary financial requirement (as 
defined in subparagraph (C)) on substantially 
all medical and surgical benefits within a cat-
egory of items and services (specified in para-
graph (3)(C)), the plan or coverage may not im-
pose 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 
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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 of items and services, the pre-
dominant requirement for such category) 
both to medical and surgical benefits with-
in such category and to mental health and 
substance-related disorder benefits within 
such category and shall not distinguish in 
the application of such requirement be-
tween such medical and surgical benefits 
and such mental health and substance-re-
lated disorder 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 
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coverage may not impose such financial re-
quirement 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 bene-
ficiary than the predominant beneficiary fi-
nancial requirement applicable to medical 
and surgical benefits for items and services 
within such category. 
‘‘(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 insert-
ing ‘‘construed as requiring’’; 
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(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 dis-
order benefits’’ each place it appears; and 
(2) in paragraph (4) of subsection (e)— 
(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 
benefits with respect to treatment of substances 
abuse or chemical dependency’’. 
(c) AVAILABILITY OF PLAN INFORMATION ABOUT 
CRITERIA FOR MEDICAL NECESSITY.—Subsection (a) of 
such section, as amended by subsection (a)(1), is further 
amended by adding at the end the following new para-
graph: 
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‘‘(5) AVAILABILITY OF PLAN INFORMATION.— 
The criteria for medical necessity determinations 
made under the plan with respect to mental health 
and substance-related disorder benefits (or the 
health insurance coverage offered in connection with 
the plan with respect to such benefits) shall be made 
available by the plan administrator (or the health in-
surance issuer offering such coverage) to any cur-
rent or potential participant, beneficiary, or con-
tracting provider upon request. The reason for any 
denial under the plan (or coverage) of reimburse-
ment or payment for services with respect to mental 
health and substance-related disorder benefits in the 
case of any participant or beneficiary shall, upon re-
quest, be made available by the plan administrator 
(or the health insurance issuer offering such cov-
erage) to the participant or beneficiary.’’. 
(d) 
MINIMUM
BENEFIT
REQUIREMENTS.—Sub-
section (a) of such section is further amended by adding 
at the end the following new paragraph: 
‘‘(6) MINIMUM SCOPE OF COVERAGE AND EQ-
UITY IN OUT-OF-NETWORK BENEFITS.— 
‘‘(A) 
MINIMUM
SCOPE
OF
MENTAL 
HEALTH AND SUBSTANCE-RELATED DISORDER 
BENEFITS.—In the case of a group health plan 
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