Mental Health Parity Act:

Employers' Mental Health Benefits Remain Limited Despite New Federal Standards

T-HEHS-00-113: Published: May 18, 2000. Publicly Released: May 18, 2000.

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GAO discussed the implementation and effects of the Mental Health Parity Act of 1996, focusing on: (1) employers' compliance with the law and the changes they have made to their health benefit plans, (2) what is known about the costs of complying with the law, and (3) the oversight roles of the Departments of Health and Human Services (HHS) and Labor (DOL) in enforcing this law.

GAO noted that: (1) most, but not all, employers that GAO surveyed reported that they comply with the law by having parity in mental health and medical and surgical annual and lifetime dollar limits; (2) among the 863 employers responding to the GAO's survey that offered mental health benefits in the 26 states and the District of Columbia with laws no more comprehensive than the federal law, the percentage reporting parity in dollar limits grew from 55 percent in 1996, before the law went into effect, to 86 percent in 1999; (3) however, most of these newly compliant employers reported that they also made changes to make their plans more restrictive in the number of hospital days or outpatient visits covered for mental health than for other medical and surgical benefits; (4) very few employers reported that the law resulted in higher claims costs; (5) the Mental Health Parity Act and other recent federal health insurance standards have expanded DOL's role in regulating health benefits and have created a regulatory role for the Health Care Financing Administration (HCFA) that entails federal enforcement of the law when states do not adopt conforming insurance regulations; and (6) while HCFA has begun to review state conformance, it has not completely determined the full extent of its required oversight role or specific time periods for making this determination.

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