Report Title:

Income Tax Credit; mental health coverage

 

Description:

Requires all accident and sickness contracts and policies issued by mutual benefit societies and health maintenance organizations to include at the option of the employer mental health parity supplemental coverage; establishes an income tax credit for employers who purchase mental health parity supplemental coverage for their employees.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

2006

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

Relating to supplemental mental illness and alcohol and drug dependence insurance benefits.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Mental health parity supplemental coverage tax credit. (a) Each employer who obtains mental health parity supplemental coverage for an employee in accordance with section 431M- and files an individual or corporate net income tax return for a taxable year may claim an income tax credit under this section against the Hawaii state individual or corporate net income tax.

(b) The tax credit shall be an amount equal to the premium paid for the supplemental coverage by the employer for each employee receiving the mental health parity supplemental coverage during the taxable year.

(c) The tax credit claimed under this section by the employer shall be deductible from the employer's individual or corporate income tax liability, if any, for the tax year in which the credit is properly claimed. If the tax credit claimed by the employer under this section exceeds the eligible taxpayer's income tax liability, the excess of credits over liability shall be refunded to the taxpayer; provided that a tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided further no refunds or payments on account of the tax credit allowed by this section shall be made from amounts less than $1.

(d) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules necessary to effectuate the purpose of this section pursuant to chapter 91.

(e) All claims, including any amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(f) As used in this section, "employer" and "employee" have the same meaning as defined in section 393-3."

SECTION 2. Chapter 431M, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§431M- Optional supplemental coverage. Notwithstanding section 431M-4 or any other law to the contrary, all individual and group accident and sickness insurance policies, individual or group hospital or medical service plan contracts, and nonprofit mutual benefit association and health maintenance organization health plan contracts offering benefits to an employee in accordance with chapter 393, shall include upon written authorization by the employer supplemental coverage for mental illness and alcohol and drug dependence benefits beyond those required under section 431M-4; provided that for the optional supplemental coverage, the health insurance plan shall not impose rates, terms, or conditions, including service limits and financial requirements, on mental illness and alcohol and drug dependence benefits, if similar rates, terms, or conditions are not applied to services for other medical or surgical conditions. For purposes of this section, "employer" has the same meaning as defined in section 393-3."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval, provided that section 1 shall apply to taxable years beginning after June 30, 2004.

INTRODUCED BY:

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