H.57

AN ACT RELATING TO HEALTH INSURANCE FOR MENTAL HEALTH AND SUBSTANCE ABUSE DISORDERS

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 8 V.S.A. § 4089b is added to read:

§ 4089b. HEALTH INSURANCE COVERAGE; MENTAL HEALTH AND

SUBSTANCE ABUSE

(a) As used in this section,

(1) "Health insurance plan" means any health insurance policy or health benefit plan offered by a health insurer, as defined in 18 V.S.A. § 9402(7). Health insurance plan includes any health benefit plan offered or administered by the state, by any subdivision or instrumentality of the state or by any employer doing business in this state that receives more than 50 percent of its annual gross revenues from state revenue sources.

(2) "Mental health condition" means any condition or disorder involving mental illness or alcohol or substance abuse that falls under any of the diagnostic categories listed in the mental disorders section of the international classification of disease, as periodically revised.

(3) "Rate, term or condition" means any lifetime or annual payment limits, deductibles, copayments, coinsurance and any other cost-sharing requirements, out-of-pocket limits, visit limits and any other financial component of health insurance coverage that affects the insured.

(b) A health insurance plan shall not establish any rate, term or condition that places a greater financial burden on an insured for access to treatment for a mental health condition than for access to treatment for a physical health condition. Any deductible or out-of-pocket limits required under a health insurance plan shall be comprehensive for coverage of both mental health and physical health conditions.

(c) A health insurance plan may provide coverage for treatment of mental health conditions through a managed care organization provided that the managed care organization is in compliance with the rules adopted by the commissioner that assure that the system for delivery of treatment for mental health conditions does not diminish or negate the purpose of this section. The rules adopted by the commissioner shall assure that timely and appropriate access to care is available; that the quantity, location and specialty distribution of health care providers is adequate and that administrative or clinical protocols do not serve to reduce access to medically necessary treatment for any insured.

(d) A health insurance plan shall be construed to be in compliance with this section if the plan provides or offers a choice for the insured for access to treatment for a mental health condition for which the financial burden on an insured is no greater than for access to treatment for a physical health condition.

(e) To be eligible for coverage under this section the service shall be rendered:

(1) For treatment of mental illness,

(A) by a licensed or certified mental health professional, or (B) in a mental health facility qualified pursuant to rules adopted by the secretaryof human services. A nonprofit hospital or a medical service corporation may require a mental health facility or licensed or certified mental health professional to enter into a contract as a condition of providing benefits.

(2) For treatment of alcohol or substance abuse,

(A) by a substance abuse counselor or other person approved by the secretary of human services based on rules adopted by the secretary that establish standards and criteria for determining eligibility under this subdivision, or

(B) in an institution, approved by the secretary of human services, that provides a program for the treatment of alcohol or substance dependency pursuant to a written plan.

Sec. 2. REPORT

On or before January 15, 1998, the Department of Banking, Insurance, Securities, and Health Care Administration shall report to the general assembly on the following:

(1) An estimate of the impact of this act on health insurance costs.

(2) Actions taken by the department to assure that health insurance plans are in compliance with this act and that quality and access to treatment for mental health conditions provided by the plans are not compromised by providing financial parity for such coverage.

Sec. 3. CONSTRUCTION; TRANSITIONAL PROVISIONS

(a) The provisions of this bill shall not be construed to:

(1) Limit the provision of specialized Medicaid covered services for individuals withmental health or substance disorders.

(2) Supersede the provisions of federal law, federal Medicaid policy or the terms and conditions imposed on any Medicaid waiver granted to the state with respect to the provision of services to individuals with mental health or substance abuse disorders.

(3) Affect any annual health insurance plan until its date of renewal or any health insurance plan governed by a collective bargaining agreement or employment contract until the expiration of that contract.

(b) The rules of the secretary of human services adopted under 8 V.S.A. § 4089, relating to eligibility for payment for treatment of mental illness, and adopted under 8 V.S.A. § 4099, relating to eligibility for payment for treatment of alcoholism, shall remain in effect until the effective date of this act and thereafter shall be deemed to be the rules adopted by the secretary under 8 V.S.A. § 4089b(e), to the extent that they are consistent with the provisions of this act and until amended or repealed by the secretary.

Sec. 4. REPEAL

8 V.S.A. § 4089 (mental illness) and §§ 4097-4099b (alcoholism) are repealed in regard to any health insurance plan only after the provisions of this act take effect in accordance with Sec. 5 of this act.

Sec. 5. EFFECTIVE DATE

This act shall take effect on passage and shall apply to any health insurance plan offered or renewed on and after January 1, 1998.