To provide for equal coverage of mental health benefits with respect to health insurance coverage unless comparable limitations are imposed on medical and surgical benefits.

SECTION 1. SHORT TITLE.

     This Act may be cited as the ``Paul Wellstone Mental Health 
Equitable Treatment Act of 2005''.

SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) In General.--Section 712 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1185a) is amended to read as follows:

``SEC. 712. MENTAL HEALTH PARITY.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and mental health benefits, 
such plan or coverage shall not impose any treatment limitations or 
financial requirements with respect to the coverage of benefits for 
mental illnesses unless comparable treatment limitations or financial 
requirements are imposed on medical and surgical benefits.
    ``(b) Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        mental health benefits.
            ``(2) Medical management of mental health benefits.--
        Consistent with subsection (a), nothing in this section shall 
        be construed to prevent the medical management of mental health 
        benefits, including through concurrent and retrospective 
        utilization review and utilization management practices, 
        preauthorization, and the application of medical necessity and 
        appropriateness criteria applicable to behavioral health and 
        the contracting and use of a network of participating 
        providers.
            ``(3) No requirement of specific services.--Nothing in this 
        section shall be construed as requiring a group health plan (or 
        health insurance coverage offered in connection with such a 
        plan) to provide coverage for specific mental health services, 
        except to the extent that the failure to cover such services 
        would result in a disparity between the coverage of mental 
        health and medical and surgical benefits.
    ``(c) Small Employer Exemption.--
            ``(1) In general.--This section shall not apply to any 
        group health plan (and group health insurance coverage offered 
        in connection with a group health plan) for any plan year of 
        any employer who employed an average of at least 2 but not more 
        than 50 employees on business days during the preceding 
        calendar year.
            ``(2) Application of certain rules in determination of 
        employer size.--For purposes of this subsection--
                    ``(A) Application of aggregation rule for 
                employers.--Rules similar to the rules under 
                subsections (b), (c), (m), and (o) of section 414 of 
                the Internal Revenue Code of 1986 shall apply for 
                purposes of treating persons as a single employer.
                    ``(B) Employers not in existence in preceding 
                year.--In the case of an employer which was not in 
                existence throughout the preceding 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 calendar 
                year.
                    ``(C) Predecessors.--Any reference in this 
                paragraph to an employer shall include a reference to 
                any predecessor of such employer.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) In-Network and Out-of-Network Rules.--In the case of a plan 
or coverage option that provides in-network mental health benefits, 
out-of-network mental health benefits may be provided using treatment 
limitations or financial requirements that are not comparable to the 
limitations and requirements applied to medical and surgical benefits 
if the plan or coverage provides such in-network mental health benefits 
in accordance with subsection (a) and provides reasonable access to in-
network providers and facilities.
    ``(f) Definitions.--For purposes of this section--
            ``(1) Financial requirements.--The term `financial 
        requirements' includes deductibles, coinsurance, co-payments, 
        other cost sharing, and limitations on the total amount that 
        may be paid by a participant or beneficiary with respect to 
        benefits under the plan or health insurance coverage and shall 
        include the application of annual and lifetime limits.
            ``(2) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include mental 
        health benefits.
            ``(3) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to services, as defined 
        under the terms and conditions of the plan or coverage (as the 
        case may be), for all categories of mental health conditions 
        listed in the Diagnostic and Statistical Manual of Mental 
        Disorders, Fourth Edition (DSM IV-TR), or the most recent 
        edition if different than the Fourth Edition, if such services 
        are included as part of an authorized treatment plan that is in 
        accordance with standard protocols and such services meet the 
        plan or issuer's medical necessity criteria.
            ``(4) Treatment limitations.--The term `treatment 
        limitations' means limitations on the frequency of treatment, 
        number of visits or days of coverage, or other similar limits 
        on the duration or scope of treatment under the plan or 
        coverage.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act is amended by striking the item relating to section 712 and 
inserting the following new item:

``Sec. 712. Mental health parity.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning on or after January 1, 2006.

SEC. 3. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE 
              GROUP MARKET.

    (a) In General.--Section 2705 of the Public Health Service Act (42 
U.S.C. 300gg-5) is amended to read as follows:

``SEC. 2705. MENTAL HEALTH PARITY.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and mental health benefits, 
such plan or coverage shall not impose any treatment limitations or 
financial requirements with respect to the coverage of benefits for 
mental illnesses unless comparable treatment limitations or financial 
requirements are imposed on medical and surgical benefits.
    ``(b) Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        mental health benefits.
            ``(2) Medical management of mental health benefits.--
        Consistent with subsection (a), nothing in this section shall 
        be construed to prevent the medical management of mental health 
        benefits, including through concurrent and retrospective 
        utilization review and utilization management practices, 
        preauthorization, and the application of medical necessity and 
        appropriateness criteria applicable to behavioral health and 
        the contracting and use of a network of participating 
        providers.
            ``(3) No requirement of specific services.--Nothing in this 
        section shall be construed as requiring a group health plan (or 
        health insurance coverage offered in connection with such a 
        plan) to provide coverage for specific mental health services, 
        except to the extent that the failure to cover such services 
        would result in a disparity between the coverage of mental 
        health and medical and surgical benefits.
    ``(c) Small Employer Exemption.--
            ``(1) In general.--This section shall not apply to any 
        group health plan (and group health insurance coverage offered 
        in connection with a group health plan) for any plan year of 
        any employer who employed an average of at least 2 but not more 
        than 50 employees on business days during the preceding 
        calendar year.
            ``(2) Application of certain rules in determination of 
        employer size.--For purposes of this subsection--
                    ``(A) Application of aggregation rule for 
                employers.--Rules similar to the rules under 
                subsections (b), (c), (m), and (o) of section 414 of 
                the Internal Revenue Code of 1986 shall apply for 
                purposes of treating persons as a single employer.
                    ``(B) Employers not in existence in preceding 
                year.--In the case of an employer which was not in 
                existence throughout the preceding 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 calendar 
                year.
                    ``(C) Predecessors.--Any reference in this 
                paragraph to an employer shall include a reference to 
                any predecessor of such employer.
    ``(d) Separate Application to Each Option Offered.--In the case of 
a group health plan that offers a participant or beneficiary two or 
more benefit package options under the plan, the requirements of this 
section shall be applied separately with respect to each such option.
    ``(e) In-Network and Out-of-Network Rules.--In the case of a plan 
or coverage option that provides in-network mental health benefits, 
out-of-network mental health benefits may be provided using treatment 
limitations or financial requirements that are not comparable to the 
limitations and requirements applied to medical and surgical benefits 
if the plan or coverage provides such in-network mental health benefits 
in accordance with subsection (a) and provides reasonable access to in-
network providers and facilities.
    ``(f) Definitions.--For purposes of this section--
            ``(1) Financial requirements.--The term `financial 
        requirements' includes deductibles, coinsurance, co-payments, 
        other cost sharing, and limitations on the total amount that 
        may be paid by a participant, beneficiary or enrollee with 
        respect to benefits under the plan or health insurance coverage 
        and shall include the application of annual and lifetime 
        limits.
            ``(2) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to medical or 
        surgical services, as defined under the terms of the plan or 
        coverage (as the case may be), but does not include mental 
        health benefits.
            ``(3) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to services, as defined 
        under the terms and conditions of the plan or coverage (as the 
        case may be), for all categories of mental health conditions 
        listed in the Diagnostic and Statistical Manual of Mental 
        Disorders, Fourth Edition (DSM IV-TR), or the most recent 
        edition if different than the Fourth Edition, if such services 
        are included as part of an authorized treatment plan that is in 
        accordance with standard protocols and such services meet the 
        plan or issuer's medical necessity criteria.
            ``(4) Treatment limitations.--The term `treatment 
        limitations' means limitations on the frequency of treatment, 
        number of visits or days of coverage, or other similar limits 
        on the duration or scope of treatment under the plan or 
        coverage.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to plan years beginning on or after January 1, 2006.

SEC. 4. PREEMPTION.

     Nothing in the amendments made by this Act shall be construed to 
preempt any provision of State law, with respect to health insurance 
coverage offered by a health insurance issuer in connection with a 
group health plan, that provides protections to enrollees that are 
greater than the protections provided under such amendments. Nothing in 
the amendments made by this Act shall be construed to affect or modify 
section 514 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1144).

SEC. 5. GOVERNMENT ACCOUNTABILITY OFFICE STUDY.

    (a) Study.--The Comptroller General shall conduct a study that 
evaluates the effect of the implementation of the amendments made by 
this Act on the cost of health insurance coverage, access to health 
insurance coverage (including the availability of in-network 
providers), the quality of health care, and other issues as determined 
appropriate by the Comptroller General. Such study also shall include 
an estimation of the costs of extending the provisions of such 
amendments to treatment of substance abuse and chemical dependency.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Comptroller General shall prepare and submit to the 
appropriate committees of Congress a report containing the results of 
the study conducted under subsection (a).

Summary: Paul Wellstone Mental Health Equitable Treatment Act of 2005 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service Act to prohibit a group health plan or group health coverage that provides both medical and surgical benefits and mental health benefits from imposing treatment limitations or financial requirements on the mental health benefits unless comparable limitations or requirements are imposed on medical and surgical benefits. Excludes such requirements for plans and coverage for small employers.

Allows a plan or coverage that provides in-network mental health benefits to provide out-of-network mental health benefits using treatment limitations or financial requirements that are not comparable to those applied to medical-surgical benefits if the in-network mental health benefits are provided at parity with medical-surgical benefits and with reasonable access.

 Requires the Government Accountability Office (GAO) to: (1) study the effects of this Act on health insurance costs and access and quality of health care; and (2) provide a cost estimation of extending such requirements to the treatment of substance abuse and chemical dependency.