Report Title:

Health Insurance; Mental Health Parity

Description:

Provides parity by removing all limits on mental illness and alcohol or drug dependence benefits coverage. Requires insurance commissioner to report on effects by 1/15/2005. Grants employers tax credit of 50% or $500 for payment of such coverage. Requires services and benefits provided by health insurance plans for abuse and dependency on crystal methamphetamine be equal to coverage for physical diseases and illnesses. (HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

2102

TWENTY-SECOND LEGISLATURE, 2004

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to mental health and alcohol and drug abuse insurance.

 

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

PART I

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-A 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 fifty per cent of the premium paid for the supplemental coverage by the employer for each employee receiving the mental health parity supplemental coverage during the taxable year or a maximum of $500 per employee, whichever is less.

(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:

(1) A tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and

(2) 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 two new sections to be appropriately designated and to read as follows:

"§431M-A Optional supplemental coverage. 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.

§431M-B Parity of coverage and rates. (a) An insurer subject to section 431M-2 shall provide a covered benefit under this chapter without imposing any rate, term, or condition, including but not limited to deductibles, copayment plans, and other limitations on payment, that places a greater financial burden on an insured for access to a covered benefit under this chapter than for access to treatment for a physical health condition or disease. Any deductible or out-of-pocket limits required under any policy coverage under section 431M-2 shall be comprehensive for coverage of both a covered benefit under this chapter and a physical health condition or disease.

(b) A policy coverage under section 431M-2 shall be construed to be in compliance with subsection (a) if at least one choice for treatment under this chapter provided to the insured within the plan has rates, terms, and conditions that place no greater financial burden on the insured than for access to treatment for a physical health condition or disease.

(c) A policy coverage under section 431M-2 shall provide treatment benefits to the same extent as for physical illness and disease."

SECTION 3. Section 431M-1, Hawaii Revised Statutes, is amended as follows:

1. By adding a new definition of "rate, term, or condition" to read:

""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."

2. By amending the definition of "mental illness" to read:

""Mental illness" means a syndrome of clinically significant psychological, biological, or behavioral abnormalities that results in personal distress or suffering, impairment of capacity for functioning, or both. For the purposes of this chapter, the terms "mental disorder" and "mental illness" shall be used interchangeably and shall include the definitions identified in the most recent publications of the Diagnostic and Statistical Manual of the American Psychiatric Association or International Classification of Disease. Mental illness also includes alcohol or drug abuse and dependence. Epilepsy, senility, mental retardation, or other developmental disabilities [and addiction to or abuse of intoxicating substances] do not in and of themselves constitute a mental disorder."

SECTION 4. Section 431M-2, Hawaii Revised Statutes, is amended to read as follows:

"§431M-2 Policy coverage[.]; nondiscrimination; rules. (a) All individual and group accident and health or sickness insurance policies issued in this State, individual or group hospital or medical service plan contracts, and nonprofit mutual benefit association and health maintenance organization health plan contracts shall include within their hospital and medical coverage the benefits of alcohol dependence, drug dependence, and mental illness treatment services provided in section 431M-4; except that this section shall not apply to insurance policies that are issued solely for single diseases[,] or otherwise limited, specialized coverage.

(b) Any policy issued under subsection (a) that does not otherwise provide for management of care under the plan, or that does not provide for the same degree of management of care for all health conditions, may provide coverage for treatment of mental illness through a managed care organization; provided that the managed care organization is in compliance with the rules adopted by the commissioner that ensure that the system for delivery of treatment for mental illness does not diminish or negate the purpose of this section. The rules adopted by the commissioner shall ensure that:

(1) Timely and appropriate access to care is available;

(2) The quantity, location, and specialty distribution of health care providers is adequate; and

(3) Administrative or clinical protocols do not serve to reduce access to medically necessary treatment for any insured.

(c) 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 outpatient facility that provides a program for the treatment of mental illness pursuant to a written plan.

(2) For treatment of alcohol or drug dependence:

(A) By a substance abuse counselor; or

(B) In an institution that provides a program for the treatment of alcohol or drug dependence pursuant to a written plan.

(d) The commissioner shall adopt rules pursuant to chapter 91 to implement this section."

SECTION 5. Section 431M-4, Hawaii Revised Statutes, is amended to read as follows:

"§431M-4 Mental illness, alcohol and drug dependence benefits. (a) The covered benefit under this chapter shall [not be less than thirty days of in-hospital services per year. Each day of in-hospital services may be exchanged for two days of nonhospital residential services, two days of partial hospitalization services, or two days of day treatment services. Visits] be limited to visits to a physician, psychologist, licensed clinical social worker, or advanced practice registered nurse [shall not be less than thirty visits per year to hospital or nonhospital facilities or to mental health outpatient facilities for day treatment or partial hospitalization services. Each day of in-hospital services may also be exchanged for two outpatient visits under this chapter; provided that the patient's condition is such that the outpatient services would reasonably preclude hospitalization. The total covered benefit for outpatient services in subsections (b) and (c) shall not be less than twenty-four visits per year; provided that coverage of twelve of the twenty-four outpatient visits shall apply only to the services under subsection (c). The other covered benefits under this chapter shall apply to any of the services in subsection (b) or (c). In the case of alcohol and drug dependence benefits, the insurance policy may limit the number of treatment episodes but may not limit the number to less than two treatment episodes per lifetime.] and shall be in accordance with section 431M-B. Nothing in this section shall be construed to limit serious mental illness benefits.

(b) Alcohol and drug dependence benefits shall be as follows:

(1) Detoxification services as a covered benefit under this chapter shall be provided either in a hospital or in a nonhospital facility which has a written affiliation agreement with a hospital for emergency, medical, and mental health support services. The following services shall be covered under detoxification services:

(A) Room and board;

(B) Diagnostic x-rays;

(C) Laboratory testing; and

(D) Drugs, equipment use, special therapies, and supplies.

Detoxification services shall be included as part of the covered in-hospital services[, but shall not be included in the treatment episode limitation, as specified in subsection (a)];

(2) Alcohol or drug dependence treatment through in-hospital, nonhospital residential, or day treatment substance abuse services as a covered benefit under this chapter shall be provided in a hospital or nonhospital facility. Before a person qualifies to receive benefits under this subsection, a qualified physician, psychologist, licensed clinical social worker, or advanced practice registered nurse shall determine that the person suffers from alcohol or drug dependence, or both. The substance abuse services covered under this paragraph shall include those services which are required for licensure and accreditation, and shall be [included as part of the covered in-hospital services as specified in subsection (a).] in accordance with section 431M-B. Excluded from alcohol or drug dependence treatment under this subsection are detoxification services and educational programs to which drinking or drugged drivers are referred by the judicial system, and services performed by mutual self-help groups; and

(3) Alcohol or drug dependence outpatient services as a covered benefit under this chapter shall be provided under an individualized treatment plan approved by a qualified physician, psychologist, licensed clinical social worker, or advanced practice registered nurse and must be services reasonably expected to produce remission of the patient's condition. An individualized treatment plan approved by a licensed clinical social worker or an advanced practice registered nurse for a patient already under the care or treatment of a physician or psychologist shall be done in consultation with the physician or psychologist. Services covered under this paragraph shall be [included as part of the covered outpatient services as specified in subsection (a).] in accordance with section 431M-B.

(c) Mental illness benefits.

(1) Covered benefits for mental health services set forth in this subsection shall be limited to coverage for diagnosis and treatment of mental disorders. All mental health services shall be provided under an individualized treatment plan approved by a physician, psychologist, licensed clinical social worker, or advanced practice registered nurse and must be reasonably expected to improve the patient's condition. An individualized treatment plan approved by a licensed clinical social worker or an advanced practice registered nurse for a patient already under the care or treatment of a physician or psychologist shall be done in consultation with the physician or psychologist;

(2) In-hospital and nonhospital residential mental health services as a covered benefit under this chapter shall be provided in a hospital or a nonhospital residential facility. The services to be covered shall include those services required for licensure and accreditation, and shall be [included as part of the covered in-hospital services as specified in subsection (a);] in accordance with section 431M-B;

(3) Mental health partial hospitalization as a covered benefit under this chapter shall be provided by a hospital or a mental health outpatient facility. The services to be covered under this paragraph shall include those services required for licensure and accreditation and shall be [included as part of the covered in-hospital services as specified in subsection (a);] in accordance with section 431M-B; and

(4) Mental health outpatient services shall be [a covered as part of the covered outpatient services as specified in subsection (a).] in accordance with section 431M-B."

SECTION 6. Section 431M-5, Hawaii Revised Statutes, is repealed.

["§431M-5 Nondiscrimination in deductibles, copayment plans, and other limitations on payment. (a) Deductible or copayment plans may be applied to benefits paid to or on behalf of patients during the course of treatment as described in section 431M-4, but in any case the proportion of deductibles or copayments shall be not greater than those applied to comparable physical illnesses generally requiring a comparable level of care in each policy.

(b) Notwithstanding subsection (a), health maintenance organizations may establish reasonable provisions for enrollee cost-sharing so long as the amount the enrollee is required to pay does not exceed the amount of copayment and deductible customarily required by insurance policies which are subject to the provisions of this chapter for this type and level of service. Nothing in this chapter prevents health maintenance organizations from establishing durational limits which are actuarially equivalent to the benefits required by this chapter. Health maintenance organizations may limit the receipt of covered services by enrollees to services provided by or upon referral by providers associated with the health maintenance organization.

(c) A health insurance plan shall not impose rates, terms, or conditions including service limits and financial requirements, on serious mental illness benefits, if similar rates, terms, or conditions are not applied to services for other medical or surgical conditions. This chapter shall not apply to individual contracts; provided further that this chapter shall not apply to QUEST medical plans under the department of human services until July 1, 2002."]

PART II

SECTION 7. The legislature finds that persons addicted to crystal methamphetamine pose a threat to public safety. "Ice" addicts are dangerous because of their tendency toward violent conduct and psychotic and paranoia behavior. Law enforcement agencies estimate that ninety per cent of property crimes are committed in Hawaii due to ice addicts trying to find a revenue source to support their addiction. (See, "Final Report of the Task Force," p. 49.)

Treatment for ice addiction is essential if the ice epidemic is to be stopped. Treatment for ice addiction must be sufficient in terms of duration and type of treatment in order for it to be successful.

Current health plans offer limited substance abuse treatment benefits. These benefits are insufficient to treat the specific nature of ice addiction. The restrictions on benefit levels and treatment episodes pose barriers to effective and appropriate treatment for ice addiction.

Treatment for ice addiction must be on parity with treatment for any other physical disease or illness as such treatment for ice addiction will not be a significant burden on private insurance plan members. Few ice addicts access treatment through private insurance. Private insurance plans report low utilization for substance abuse treatment and less than one per cent of benefits paid are attributable to substance abuse treatment. (See, "Final Report of Task Force," pp. 84-89 for a complete discussion of health insurance benefits for substance abuse treatment.)

The purpose of this part is to ensure parity for addiction to crystal methamphetamine.

SECTION 8. Chapter 431M, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§431M-C Treatment for abuse or dependency to crystal methamphetamine. Notwithstanding any provision of this chapter to the contrary, commencing on July 1, 2004, and ending on June 30, 2010, services and benefits provided by health insurance plans subject to section 431M-2 for abuse of dependency on crystal methamphetamine shall be equal to and co-extensive with health insurance coverage for physical disease and illnesses. Nothing in this section shall require the health insurance plan to provide residential treatment benefits except in accordance with an approved treatment plan by the health plan provider."

SECTION 9. The legislature finds that an emergency situation exists in the State that demands an immediate legislative response and that the slight financial impact of a rise in premiums is likely to be incalculable (Auditor Report No. 88-6).

SECTION 10. The treatment of crystal methamphetamine addiction provided under medical plans participating in QUEST and the fee for services program administered by the department of human services shall be in accordance with section 8 of this Act, commencing on January 1, 2005, and ending on June 30, 2010.

PART III

SECTION 11. Exemption. This Act shall be exempt from the impact assessment report by the auditor under section 23-51, Hawaii Revised Statutes. The legislature finds that any slight financial impact of this Act of a rise in premiums is likely to be incalculable (Auditor Report No. 88-6).

SECTION 12. Report. Not later than January 15, 2005, the insurance commissioner shall report to the legislature and the governor on the following:

(1) An estimate of the impact of part I of this Act on health insurance costs;

(2) Actions taken by the insurance commissioner to ensure that policies issued under section 431M-2, Hawaii Revised Statutes, are in compliance with this Act and that quality and access to treatment for mental illness provided by the plans are not compromised by providing financial parity for such coverage;

(3) When a policy issued under section 431M-2, Hawaii Revised Statutes, offers choices for treatment of mental illness and alcohol and drug dependence, an analysis and comparison of those choices in regard to level of access, choice, and financial burden; and

(4) Identification of any segments of the population of Hawaii that may be excluded from access to treatment for mental illness and alcohol and drug abuse dependence at the level provided by this Act, including an estimate of the number of residents excluded from such access under health benefit plans offered or administered by employers who receive the majority of their annual revenues from contract, grants, or other expenditures by state agencies.

SECTION 13. Construction; transition rules. (a) This Act shall not be construed to:

(1) Limit the provision of specialized medicaid covered services for individuals with mental illness or alcohol or drug dependence disorders;

(2) Contravene the provisions of federal law, federal or state 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 illness or alcohol or drug dependence disorders; and

(3) Affect any annual health insurance policy issued under section 431M-2, Hawaii Revised Statutes, 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) Any rules relating to eligibility for payment for treatment of mental illness and alcoholism or drug dependence shall remain in effect until the effective date of this Act and thereafter shall be deemed to be the rules adopted by the insurance commissioner under section 431M-2, Hawaii Revised Statutes, to the extent that they are consistent with this Act and until amended or repealed by the insurance commissioner.

SECTION 14. In codifying the new sections added by sections 2 and 8 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect upon its approval, provided that section 1 shall apply to taxable years beginning after December 31, 2004.