I
104TH CONGRESS
2D SESSION
H. R. 4058
To provide for parity for mental health benefits under group health plans.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 11, 1996
Mrs. ROUKEMA (for herself, Mr. DEFAZIO, Mr. WISE, Mrs. JOHNSON of Con-
necticut, Mrs. MORELLA, Ms. NORTON, Ms. KAPTUR, Mr. MCCOLLUM,
Mr. KASICH, and Mr. HUTCHINSON) introduced the following bill; which
was referred to the Committee on Commerce, and in addition to the Com-
mittees on Economic and Educational Opportunities, and Government
Reform and Oversight, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To provide for parity for mental health benefits under group
health plans.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Mental Health Parity
Act of 1996’’.
SEC. 2. PLAN PROTECTIONS FOR INDIVIDUALS WITH A
MENTAL ILLNESS.
(a) PERMISSIBLE
COVERAGE
LIMITS
UNDER
A
GROUP HEALTH PLAN.—
(1) AGGREGATE LIFETIME LIMITS.—
(A) IN
GENERAL.—With respect to a
group health plan offered by a health insurance
issuer, that applies an aggregate lifetime limit
to plan payments for medical or surgical serv-
ices covered under the plan, if such plan also
provides a mental health benefit such plan
shall—
(i) include plan payments made for
mental health services under the plan in
such aggregate lifetime limit; or
(ii) establish a separate aggregate life-
time limit applicable to plan payments for
mental health services under which the dol-
lar amount of such limit (with respect to
mental health services) is equal to or
greater than the dollar amount of the ag-
gregate lifetime limit on plan payments for
medical or surgical services.
(B) NO LIFETIME LIMIT.—With respect to
a group health plan offered by a health insur-
ance issuer, that does not apply an aggregate
lifetime limit to plan payments for medical or
surgical services covered under the plan, such
plan may not apply an aggregate lifetime limit
to plan payments for mental health services
covered under the plan.
(2) ANNUAL LIMITS.—
(A) IN
GENERAL.—With respect to a
group health plan offered by a health insurance
issuer, that applies an annual limit to plan pay-
ments for medical or surgical services covered
under the plan, if such plan also provides a
mental health benefit such plan shall—
(i) include plan payments made for
mental health services under the plan in
such annual limit; or
(ii) establish a separate annual limit
applicable to plan payments for mental
health services under which the dollar
amount of such limit (with respect to men-
tal health services) is equal to or greater
than the dollar amount of the annual limit
on plan payments for medical or surgical
services.
(B) NO ANNUAL LIMIT.—With respect to a
group health plan offered by a health insurance
issuer, that does not apply an annual limit to
plan payments for medical or surgical services
covered under the plan, such plan may not
apply an annual limit to plan payments for
mental health services covered under the plan.
(b) RULE OF CONSTRUCTION.—
(1) IN GENERAL.—Nothing in this section shall
be construed as prohibiting a group health plan of-
fered by a health insurance issuer, from—
(A) utilizing other forms of cost contain-
ment not prohibited under subsection (a); or
(B) applying requirements that make dis-
tinctions between acute care and chronic care.
(2) NONAPPLICABILITY.—This section shall not
apply to—
(A) substance abuse or chemical depend-
ency benefits; or
(B) health benefits or health plans paid for
under title XVIII or XIX of the Social Security
Act.
(3) STATE LAW.—Nothing in this section shall
be construed to preempt any State law that provides
for greater parity with respect to mental health ben-
efits than that required under this section.
(c) SMALL EMPLOYER EXEMPTION.—
(1) IN GENERAL.—This section shall not apply
to plans maintained by employers that employ less
than 26 employees.
(2) APPLICATION OF CERTAIN RULES IN DE-
TERMINATION OF EMPLOYER SIZE.—For purposes of
this subsection—
(A) APPLICATION OF AGGREGATION RULE
FOR EMPLOYERS.—All persons treated as a sin-
gle employer under subsection (b), (c), (m), or
(o) of section 414 of the Internal Revenue Code
of 1986 shall be treated as 1 employer.
(B) EMPLOYERS
NOT
IN
EXISTENCE
IN
PRECEDING YEAR.—In the case of an employer
which was not in existence throughout the pre-
ceding calendar year, the determination of
whether such employer is a small employer shall
be based on the average number of employees
that it is reasonably expected such employer
will employ on business days in the current cal-
endar year.
(C) PREDECESSORS.—Any reference in
this subsection to an employer shall include a
reference to any predecessor of such employer.
SEC. 3. DEFINITIONS.
For purposes of this Act:
(1) GROUP HEALTH PLAN.—
(A) IN
GENERAL.—The term ‘‘group
health plan’’ means an employee welfare benefit
plan (as defined in section 3(1) of the Em-
ployee Retirement Income Security Act of
1974) to the extent that the plan provides med-
ical care (as defined in paragraph (2)) and in-
cluding items and services paid for as medical
care) to employees or their dependents (as de-
fined under the terms of the plan) directly or
through insurance, reimbursement, or other-
wise.
(B) MEDICAL CARE.—The term ‘‘medical
care’’ means amounts paid for—
(i) the diagnosis, cure, mitigation,
treatment, or prevention of disease, or
amounts paid for the purpose of affecting
any structure or function of the body,
(ii) amounts paid for transportation
primarily for and essential to medical care
referred to in clause (i), and
(iii) amounts paid for insurance cover-
ing medical care referred to in clauses (i)
and (ii).
(2) HEALTH INSURANCE COVERAGE.—The term
‘‘health insurance coverage’’ means benefits consist-
ing of medical care (provided directly, through insur-
ance or reimbursement, or otherwise and including
items and services paid for as medical care) under
any hospital or medical service policy or certificate,
hospital or medical service plan contract, or health
maintenance organization contract offered by a
health insurance issuer.
(3) HEALTH
INSURANCE
ISSUER.—The term
‘‘health insurance issuer’’ means an insurance com-
pany, insurance service, or insurance organization
(including a health maintenance organization, as de-
fined in paragraph (4)) which is licensed to engage
in the business of insurance in a State and which is
subject to State law which regulates insurance (with-
in the meaning of section 514(b)(2) of the Employee
Retirement Income Security Act of 1974), and in-
cludes a plan sponsor described in section 3(16)(B)
of the Employee Retirement Income Security Act of
1974 in the case of a group health plan which is an
employee welfare benefit plan (as defined in section
3(1) of such Act). Such term does not include a
group health plan.
(4) HEALTH
MAINTENANCE
ORGANIZATION.—
The 
term 
‘‘health 
maintenance 
organization’’
means—
(A) a federally qualified health mainte-
nance organization (as defined in section
1301(a) of the Public Health Service Act),
(B) an organization recognized under State
law as a health maintenance organization, or
(C) a similar organization regulated under
State law for solvency in the same manner and
to the same extent as such a health mainte-
nance organization.
(5) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, Puerto
Rico, the Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands.
SEC. 4. SUNSET.
Section 2 shall cease to be effective on September 30,
2001.
SEC. 5. FEDERAL EMPLOYEE HEALTH BENEFIT PROGRAM.
For the Federal Employee Health Benefit Program,
sections 2 and 3 will take effect on October 1, 1997.
SEC. 6. EXEMPTION.
Notwithstanding the provisions of this Act, if the pro-
visions of this Act result in a 1 percent or greater increase
in the cost of a group health plan’s premiums, the pur-
chaser is exempt from the provisions of this Act.
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