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furnished on an inpatient basis and within 
a network of providers established or rec-
ognized under such plan or coverage. 
‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 
Items and services not described in clause 
(v) furnished on an inpatient basis and 
outside any network of providers estab-
lished or recognized under such plan or 
coverage. 
‘‘(iii) OUTPATIENT, 
IN-NETWORK.— 
Items and services not described in clause 
(v) furnished on an outpatient basis and 
within a network of providers established 
or recognized under such plan or coverage. 
‘‘(iv) 
OUTPATIENT, 
OUT-OF-NET-
WORK.—Items and services not described 
in clause (v) furnished on an outpatient 
basis and outside any network of providers 
established or recognized under such plan 
or coverage. 
‘‘(v) EMERGENCY
CARE.—Items and 
services, whether furnished on an inpatient 
or outpatient basis or within or outside 
any network of providers, required for the 
treatment of an emergency medical condi-
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tion (as defined in section 1867(e) of the 
Social Security Act, including an emer-
gency condition relating to mental health 
or substance-related disorders). 
‘‘(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. 
‘‘(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.—In the case of a group health plan that 
provides both medical and surgical benefits and 
mental health or substance-related disorder bene-
fits— 
‘‘(A) NO
BENEFICIARY
FINANCIAL
RE-
QUIREMENT.—If the plan or coverage does not 
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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 or 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 of items and services, the pre-
dominant requirement for such category) 
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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 
coverage may not impose such financial re-
quirement on mental health or substance- 
related disorder benefits for items and 
services within such category in a way that 
results in greater out-of-pocket expenses to 
the participant or beneficiary than the pre-
dominant beneficiary financial requirement 
applicable to medical and surgical benefits 
for items and services within such cat-
egory. 
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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 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’’ each 
place it appears (other than in any provision amend-
ed by paragraph (2)) and inserting ‘‘mental health 
or substance-related disorder benefits’’, 
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(2) by striking ‘‘mental health benefits’’ each 
place 
it 
appears 
in 
subsections 
(a)(1)(B)(i), 
(a)(1)(C), (a)(2)(B)(i), and (a)(2)(C) and inserting 
‘‘mental health and substance-related disorder bene-
fits’’, and 
(3) in subsection (e), by striking paragraph (4) 
and inserting the following new paragraphs: 
‘‘(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 law, but does not include substance-re-
lated disorder benefits. 
‘‘(5) SUBSTANCE-RELATED
DISORDER
BENE-
FITS.—The term ‘substance-related disorder bene-
fits’ means benefits with respect to services for sub-
stance-related disorders, as defined under the terms 
of the plan and in accordance with applicable law.’’. 
(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 
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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) 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 (or 
coverage) of reimbursement or payment for services 
with respect to mental health and substance-related 
disorder benefits in the case of any participant or 
beneficiary shall, on request or as otherwise re-
quired, be made available by the plan administrator 
(or the health insurance issuer offering such cov-
erage) to the participant or beneficiary in accord-
ance with regulations.’’. 
(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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(or health insurance coverage offered in connec-
tion with such a plan) that provides any mental 
health or substance-related disorder benefits, 
the plan or coverage shall include benefits for 
any mental health condition or substance-re-
lated disorder included in the most recent edi-
tion of the Diagnostic and Statistical Manual of 
Mental Disorders published by the American 
Psychiatric Association. 
‘‘(B) EQUITY
IN
COVERAGE
OF
OUT-OF- 
NETWORK BENEFITS.— 
‘‘(i) IN GENERAL.—In the case of a 
group health plan (or health insurance cov-
erage offered in connection with such a 
plan) that provides both medical and sur-
gical benefits and mental health or 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 
disorder benefits shall also be provided for 
items and services in such category fur-
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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 
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 
for the treatment of an emergency 
medical condition (as defined in sec-
tion 1867(e) of the Social Security 
Act, including an emergency condition 
relating to mental health or sub-
stance-related disorders). 
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‘‘(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 
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 
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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 to which this paragraph applies; 
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 in writing and pre-
pared and certified by a qualified and licensed 
actuary who is a member in good standing of 
the American Academy of Actuaries. Such de-
terminations shall be made available by the 
plan administrator (or health insurance issuer, 
as the case may be) 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, 
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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.—A group health plan 
under this part shall comply with the notice re-
quirement under section 712(c)(2)(E) of the 
Employee Retirement Income Security Act of 
1974 with respect to a modification of mental 
health and substance-related disorder benefits 
as permitted under this paragraph as if such 
section applied to such plan. 
‘‘(F) 
NOTIFICATION
OF
APPROPRIATE 
AGENCY.— 
‘‘(i) IN
GENERAL.—A group health 
plan that, based on a certification de-
scribed under subparagraph (C), qualifies 
for an exemption under this paragraph, 
and elects to implement the exemption, 
shall notify the Secretary of Health and 
Human Services of such election. 
‘‘(ii) REQUIREMENT.—A notification 
under clause (i) shall include— 
‘‘(I) a description of the number 
of covered lives under the plan (or 
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coverage) involved 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 (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-re-
lated 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-related dis-
order benefits under the plan. 
‘‘(iii) CONFIDENTIALITY.—A notifica-
tion under clause (i) shall be confidential. 
The Secretary of Health and Human Serv-
ices shall make available, upon request to 
the appropriate committees of Congress 
and on not more than an annual basis, an 
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anonymous itemization of such notifica-
tions, that includes— 
‘‘(I) a breakdown of States by 
the size and any type of employers 
submitting such notification; and 
‘‘(II) a summary of the data re-
ceived under clause (ii). 
‘‘(G) CONSTRUCTION.—Nothing in this 
paragraph shall be construed as preventing a 
group health plan (or health insurance coverage 
offered in connection with such a plan) from 
complying with the provisions of this section 
notwithstanding that the plan or coverage is not 
required to comply with such provisions due to 
the application of subparagraph (A).’’. 
(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 
(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). 
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(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) 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: 
‘‘SEC. 2705. EQUITY IN MENTAL HEALTH AND SUBSTANCE- 
RELATED DISORDER BENEFITS.’’. 
(j) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply with respect to plan years be-
ginning on or after January 1, 2009. 
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(2) ELIMINATION
OF
SUNSET.—The amend-
ment made by subsection (g) shall apply to benefits 
for services furnished after December 31, 2007. 
(3) 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. 
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. 
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SEC. 104. 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.—In the case of a 
group health plan that provides both medical and 
surgical benefits and mental health or substance-re-
lated disorder benefits— 
‘‘(A) NO TREATMENT LIMIT.—If the plan 
does not include a treatment limit (as defined 
in subparagraph (D)) on substantially all med-
ical 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 or substance-related dis-
order 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 or sub-
stance-related disorder benefits for items and 
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services within such category that is 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
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 five 
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 not described in clause (v) 
furnished on an inpatient basis and within 
a network of providers established or rec-
ognized under such plan. 
‘‘(ii) INPATIENT, OUT-OF-NETWORK.— 
Items and services not described in clause 
(v) furnished on an inpatient basis and 
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outside any network of providers estab-
lished or recognized under such plan. 
‘‘(iii) OUTPATIENT, 
IN-NETWORK.— 
Items and services not described in clause 
(v) furnished on an outpatient basis and 
within a network of providers established 
or recognized under such plan. 
‘‘(iv) 
OUTPATIENT, 
OUT-OF-NET-
WORK.—Items and services not described 
in clause (v) furnished on an outpatient 
basis and outside any network of providers 
established or recognized under such plan. 
‘‘(v) EMERGENCY
CARE.—Items and 
services, whether furnished on an inpatient 
or outpatient basis or within or outside 
any network of providers, required for the 
treatment of an emergency medical condi-
tion (as defined in section 1867(e) of the 
Social Security Act, including an emer-
gency condition relating to mental health 
or substance-related disorders). 
‘‘(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 
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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 
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.—In the case of a group health plan that 
provides both medical and surgical benefits and 
mental health or substance-related disorder bene-
fits— 
‘‘(A) NO
BENEFICIARY
FINANCIAL
RE-
QUIREMENT.—If the plan does not include a 
beneficiary financial requirement (as defined in 
subparagraph (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 fi-
nancial requirement on mental health or sub-
stance-related disorder benefits for items and 
services within such category. 
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‘‘(B) BENEFICIARY
FINANCIAL
REQUIRE-
MENT.— 
‘‘(i) TREATMENT
OF
DEDUCTIBLES, 
OUT-OF-POCKET LIMITS, AND SIMILAR FI-
NANCIAL REQUIREMENTS.—If the plan in-
cludes a deductible, a limitation on out-of- 
pocket expenses, or similar beneficiary fi-
nancial 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 shall apply such require-
ment (or, if there is more than one such 
requirement for such category of items and 
services, the predominant requirement for 
such category) both to medical and sur-
gical benefits within such category and to 
mental health and substance-related dis-
order benefits within such category and 
shall not distinguish in the application of 
such requirement between such medical 
and surgical benefits and such mental 
health and substance-related disorder bene-
fits. 
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‘‘(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 or 
substance-related 
disorder 
benefits 
for 
items and services within such category in 
a way that results in greater out-of-pocket 
expenses 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. 
‘‘(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 aggre-
gate lifetime limit or annual limit.’’, and 
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(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.—Section 9812 
of such Code is further amended— 
(1) by striking ‘‘mental health benefits’’ each 
place it appears (other than in any provision amend-
ed by paragraph (2)) and inserting ‘‘mental health 
or substance-related disorder benefits’’, 
(2) by striking ‘‘mental health benefits’’ each 
place 
it 
appears 
in 
subsections 
(a)(1)(B)(i), 
(a)(1)(C), (a)(2)(B)(i), and (a)(2)(C) and inserting 
‘‘mental health and substance-related disorder bene-
fits’’, and 
(3) in subsection (e), by striking paragraph (4) 
and inserting the following new paragraphs: 
‘‘(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 
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applicable law, but does not include substance-re-
lated disorder benefits. 
‘‘(5) SUBSTANCE-RELATED
DISORDER
BENE-
FITS.—The term ‘substance-related disorder bene-
fits’ means benefits with respect to services for sub-
stance-related disorders, as defined under the terms 
of the plan and in accordance with applicable law.’’. 
(c) AVAILABILITY OF PLAN INFORMATION ABOUT 
CRITERIA FOR MEDICAL NECESSITY.—Subsection (a) of 
section 9812 of such Code, as amended by subsection 
(a)(1), is further amended by adding at the end the fol-
lowing new paragraph: 
‘‘(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 shall be 
made available by the plan administrator in accord-
ance with regulations to any current or potential 
participant, beneficiary, or contracting provider 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 ben-
efits in the case of any participant or beneficiary 
shall, on request or as otherwise required, be made 
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available by the plan administrator to the partici-
pant or beneficiary in accordance with regulations.’’. 
(d) 
MINIMUM
BENEFIT
REQUIREMENTS.—Sub-
section (a) of section 9812 of such Code is further amend-
ed 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 
that provides any mental health or substance- 
related disorder benefits, the plan shall include 
benefits for any mental health condition or sub-
stance-related disorder included in the most re-
cent edition of the Diagnostic and Statistical 
Manual of Mental Disorders published by the 
American Psychiatric Association. 
‘‘(B) EQUITY
IN
COVERAGE
OF
OUT-OF- 
NETWORK BENEFITS.— 
‘‘(i) IN GENERAL.—In the case of a 
group health plan that provides both med-
ical and surgical benefits and mental 
health or substance-related disorder bene-
fits, if medical and surgical benefits are 
provided for substantially all items and 
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services in a category specified in clause 
(ii) furnished outside any network of pro-
viders established or recognized under such 
plan, the mental health and substance-re-
lated disorder benefits shall also be pro-
vided for items and services in such cat-
egory furnished outside any network of 
providers established or recognized under 
such plan 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 
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 
for the treatment of an emergency 
medical condition (as defined in sec-
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tion 1867(e) of the Social Security 
Act, including an emergency condition 
relating to mental health or sub-
stance-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 section 9812(c) of such Code 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 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-re-
lated disorder benefits under the plan (as deter-
mined and certified under subparagraph (C)) by 
an amount that exceeds the applicable percent-
age described in subparagraph (B) of the actual 
total plan costs, the provisions of this section 
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shall not apply to such plan during the fol-
lowing 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 to which this paragraph applies, 
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 subsection 
shall be made in writing and prepared and cer-
tified by a qualified and licensed actuary who is 
a member in good standing of the American 
Academy of Actuaries. Such determinations 
shall be made available by the plan adminis-
trator to the general public. 
‘‘(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 
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