Provides certain coverage for diagnosis and treatment of chemical abuse and chemical dependence

Summary of provisions

Section 1. Converts the current insurance law requirement that group and school blanket policies be made available as an option to provide coverage for benefits comparable to medical benefits for the diagnosis and treatment of chemical abuse and chemical dependence to a requirement for fully insured groups in NYS; conforms this requirement to the requirements made by "Timothy's Law" for mental health benefits, pursuant to Chapter 748 of the Laws of2006 and Chapter 502 of the Laws of2007, and a Chapter of the laws of2009; and requires the Superintendent of Insurance to develop a methodology to fully cover the cost of this requirement to any employer of fifty or fewer employees, to be financed from the General Fund.

Section 2. Makes conforming amendments to the current requirement and comparability standard that group and school blanket policies provide coverage for at least 60 outpatient visits for the diagnosis and treatment of chemical dependence of which up to twenty may be for family members, including provisions relating to policies covering physician services consistent with Chapter 502 of the Laws of 2007.

Section 3. Converts the current insurance law requirement that hospital service corporations or health service corporations which provide group, group remittance or school blanket coverage for inpatient hospital care make available as an option coverage for benefits comparable to medical benefits for the diagnosis and treatment of chemical abuse and chemical dependence to a requirement for fully insured groups in NYS; conforms this requirement to the requirements made by "Timothy's Law" for mental health benefits, pursuant to Chapter 748 of the Laws of 2006 and Chapter 502 of the Laws of 2007, and a Chapter of the laws of 2009; and requires the Superintendent of Insurance to develop a methodology to fully cover the cost of this requirement to any employer of fifty or fewer employees, to be financed from the General Fund.

Section 4. Makes conforming amendments to the current requirement and comparability standard that hospital service corporation or health service corporations which provide group, group remittance or school blanket coverage for inpatient hospital care provide coverage for at least 60 outpatient visits for the diagnosis and treatment of chemical dependence of which up to twenty may be for family members.

Section 5. Requires the Superintendent of Insurance to ensure that insurers' contracts or policies do not contain unreasonable definitions of chemical abuse, alcohol and substance abuse, chemical dependence, alcoholism and substance dependence in their contracts or policies.

Section 6. Provides that this legislation will take effect on the first of January next succeeding the date on which it becomes a law; and that its provisions will apply to policies and contracts issued, renewed, modified, altered or amended on or after the effective date.

Justification

Timothy's Law (Chapter 748 of the Laws of 2006), one of the 42 state mental health parity laws in the US, took effect January 1, 2007 and applies to most insurance policies in New York on the day they are issued, renewed, modified, altered, or amended. Before the law passed, health plans were permitted to discriminate against those with mental health needs by charging much higher co-payments and deductibles for inpatient and outpatient mental health care compared with the fees they charge consumers for regular medical office visits. Top health plans also recently began to restrict coverage for mental health conditions, exclude coverage for chronic mental illnesses, and impose life time limits on inpatient psychiatric care. Timothy's Law remedied many of these barriers to care.

Predating Timothy's Law, insurance coverage for the diagnosis and treatment of chemical abuse and chemical dependence included required coverage of 60 outpatient visits and optional coverage for inpatient detoxification and rehabilitation service which plans were required to offer to employers seeking such coverage.

Further, Federal law recently added mental health parity requirements to the Child Health Insurance plans (effective April 1, 2009) and Medicare (effective on a phased in schedule over the next few years) as well as self-insured plans and other large employers, including parity in coverage for the treatment of chemical dependency (effective with plan years beginning after October 3, 2009 except for certain collectively bargained plans that are subject to special rules regarding effective date).

One remaining gap in the insurance landscape is that health plans are not required to provide coverage for inpatient detoxification or rehabilitation services, but merely to offer such coverage for fully insured employers seeking to purchase it.

This legislation assures that such coverage is required and comparable to that which is provided for other medical conditions under these plans and policies, and does not place greater restrictions on coverage for addictions than apply for other needs.

Recent studies confirm the efficacy and cost effectiveness of such coverage, and, furthermore demonstrate that the costs associated with the enactment of mental health parity legislation are minimal. Actuarial analyses and emerging data from states with parity laws demonstrate that equitable insurance coverage for mental illnesses and chemical dependency is indeed affordable.

Studies demonstrate that the cost of adopting mental health and chemical dependency parity is negligible - often below one per cent. The NYS Insurance Department projected costs for Timothy's Law premium subsidies for small employers to be about one percent for the premium component attributable to the entire mental health benefit among private insurers and Health Maintenance Organizations in NYS.

The comparability required under this legislation would cost a mere fraction of that sum, since most plans already provide some degree of addiction treatment coverage. Further, the cost to the taxpayer will be reduced, since those who may would need benefits otherwise cost employers dearly due to well documented consequences of untreated addiction including absences and low productivity.

Finally, costs are incurred by individuals, employers, all levels of government, and society as a whole as a result of addictions that can also cause or contribute to accidents, job dissatisfaction, interpersonal conflict, turnover, disability, workers' compensation, involvement with the criminal justice system, disrupted lives and families, and increased dependency on public resources. By providing comparable coverage for addictions, such disorders can be diagnosed and treated quickly and thoroughly, thus placing less of a burden on public resources and businesses.

Legislative history

2010: S.7788 (Duane) Died in Insurance

Fiscal implications

Minimal.

Effective date

January 1 of the year next succeeding enactment.