Mental Health Parity Act of 1996

Topics: Health insurance, Employee Retirement Income Security Act, Mental disorder Pages: 1 (380 words) Published: October 28, 2012
Mental Health Parity Act of 1996
The Mental Health Parity Act of 1996 is legislation in the United States that required the annual caps and lifetime maximum benefits for mental health insurance to be equal to those for other forms of health insurance. The main goal of this act was to create equal coverage between medical and surgical services and mental healthcare services. The principle beneficiaries of the Mental Health Parity Act would be persons with the most severe, persistent and disabling of brain disorders because they are, on average, more likely to exceed annual and lifetime benefits. President Clinton signed the Mental Health Parity Act of 1996 (P.L. 104-204) into law on September 26, 1997. The law was to take effect on January 1, 1998, and expire on September 30, 2001. The law covered mental illnesses, but it did not cover treatment of substance abuse or chemical dependency. It applied only to employers that offered mental health benefits, both fully insured state-regulated health plans and self-insured plans that are exempt from state laws under the Employee Retirement Income Security Act (ERISA), and also small business exemption which excluded businesses with 50 or less employees. The law allowed an increased cost exemption, which stated that employers that can demonstrate a one percent or more rise in costs due to parity implementation will be allowed to exempt themselves from the law. The Mental Health Parity Act did not include rules for service charges, designations for the number of inpatient hospital days or outpatient visits that must be covered, coverage in connection with Medicare or Medicaid, restrictions on a health insurance plan’s ability to manage care, and coverage for treatment of substance abuse or chemical dependency. I do not think that the Mental Health Parity Act was successful, because there are many people still in this world who don’t have insurance have to pay more than what people with insurance do. Even some people with...
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