Relates to the expiration of Timothy's law

Section 2 of the bill would provide for an immediate effective date.

Existing law

Chapter 748 of the Laws of 2006 contains the provisions of Timothy's Law, which requires most fully insured group health insurance plans to provide a level of parity in the coverage of mental health insurance benefits as compared to physical health (medical) insurance benefits. Section 7 of Chapter 748 of the Laws of 2006 requires the Insurance Department and the Office of Mental Health to study the effectiveness of mental health parity, to be delivered on or before April 1, 2009. Timothy's Law took effect on January 1, 2007, and sunsets on December 31, 2009.

Chapter 502 of the Laws of 2007 made technical amendments to Timothy's Law to correct certain deficiencies of the original law, including: (1) unintended limitations on mental health benefits; (2) use of terminology that does not reflect insurance industry standards; and (3) inconsistent application to the various types of entities writing health insurance coverage.

Legislative history

This is a new proposal.

Statement in support

Timothy's Law requires group health insurance policies to provide a minimum of 30 inpatient days and 20 outpatient visits for the treatment of mental, nervous or emotional disorders or ailments. Timothy's Law also requires large group health insurance policies (more than 50 employees or members) that provide medical/physical health coverage for insured beneficiaries to provide "comparable" mental health coverage (i.e., the same benefits, co-pays, deductibles, limits, etc.) for two categories of insured persons with psychiatric diagnosis (adults and children diagnosed with "biologically based mental illness" and children diagnosed with "serious emotional disturbances" accompanied by specific behaviors). Timothy's Law defines the term "biologically based mental illness" and specifically references certain biologically based mental illnesses, including schizophrenia/psychotic disorders, major depression, bipolar disorder, delusional disorders, panic disorder, obsessive compulsive disorder, bulimia and anorexia.

On October 3, 2008, as part of the Emergency Economic Stabilization Act of 2008 (H.R. 1424) Congress enacted and the President signed into law the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. The federal parity legislation does not mandate that employers provide coverage for mental health benefits. However, those large employer groups (more than 50 employees) that do provide mental health benefits must do so in full parity with other medical benefits.

Timothy's Law mandates a minimum set of mental health benefits. The federal parity legislation does not provide equivalent benefits since it does not mandate mental health coverage; it only mandates parity if mental health benefits are provided. If Timothy's Law is allowed to sunset, many New Yorkers could be left without any mental health coverage as employers may choose not to provide that benefit.

The provisions of the federal mental health parity law will apply with respect to group health plans for plan years beginning after October 3, 2009. The law also sets forth a special rule for collective bargaining agreements which allows any collective bargaining agreement, in effect on October 3, 2008, to terminate prior to making any changes required by the federal law. If Timothy's Law sunsets on December 31, 2009, New York State fully insured group health plans that renew any time after that date will not be required to offer mental health benefits. This would significantly diminish the impact of the federal mental health parity requirements since the employer group would only be required to manage the benefit in parity with other benefits if mental health benefits are already included in the health plan.

In addition, the federal law allows mental health and substance abuse benefits to be defined by the plan as long as the definition is consistent with state and federal law. Timothy's Law does not specifically define "mental health benefits." Timothy's Law states that coverage must be provided for the diagnoses and treatment of mental, nervous or emotional disorders, "however defined in such policy." Timothy's Law charges the Superintendent of Insurance with ensuring that the plan definition is not "unreasonable" and ties the test of whether a definition is reasonable to consistency with the coverage provided to public officers and employees pursuant through the Empire Plan. If Timothy's Law is allowed to sunset, New York's regulatory oversight over an employer group plan's definition of "mental health benefits" will be greatly diminished. This would allow group health plans to significantly limit their mental health benefit by defining narrowly mental health benefits.

Timothy's Law requires the Superintendent of Insurance and the Office of Mental Health to issue the results of a study on or after April 1, 2009, evaluating the costs of providing coverage, the number of policyholders and group contract holders which have elected to purchase other mental health coverage and a comparison of the type and number of illnesses for which coverage has been provided. This bill would extend Timothy's Law for one year while the results of the study are evaluated and changes can be proposed which reflect the findings of the study.

Budget implications

This proposal would have no fiscal implications as costs associated with Timothy's Law are already accounted for in the State's Financial Plan.

Effective date

This proposal would take effect immediately.