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Financial Bailout Bill Includes Mental Health Parity Act

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October 23, 2008

The U.S. Congress passed the Mental Health Parity Act on October 3, 2008, as part of the compromise financial rescue plan intended to address the country's credit crisis. This legislation amends the Mental Health Parity Act of 1996. The amendment applies to group health plans with 50 or more employees that provide treatment for both medical/surgical and mental health/substance use. The Act requires such plans to ensure that financial requirements and treatment limitations applicable to mental health and substance use disorder benefits are no more restrictive than the requirements and limitations placed on medical/surgical benefits. The Act applies to all financial requirements, including copayments, deductibles, coinsurance, and out-of-pocket expenses. It also applies to treatment limitations like frequency of treatment, number of visits and days of coverage.

Under the law, mental health or substance use benefit coverage is not mandated, but if a plan offers these benefits, it must be provided in accordance with the parity requirements of the Act. ERISA plans are encouraged to review their benefits as the Act will apply to plans in the first plan year beginning on or after October 3, 2009. Plans maintained under collective bargaining agreements ratified before the enactment date are not subject to the Act until the collective bargaining agreement terminates.

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