article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Paul Wellstone Mental Health Equitable Treatment Act of 2005''. SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. (a) In General.--Section 712 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185a) is amended to read as follows: ``SEC. 712. MENTAL HEALTH PARITY. ``(a) In General.--In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits, such plan or coverage shall not impose any treatment limitations or financial requirements with respect to the coverage of benefits for mental illnesses unless comparable treatment limitations or financial requirements are imposed on medical and surgical benefits. ``(b) Construction.-- ``(1) In general.--Nothing in this section shall be construed as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health benefits. ``(2) Medical management of mental health benefits.-- Consistent with subsection (a), nothing in this section shall be construed to prevent the medical management of mental health benefits, including through concurrent and retrospective utilization review and utilization management practices, preauthorization, and the application of medical necessity and appropriateness criteria applicable to behavioral health and the contracting and use of a network of participating providers. ``(3) No requirement of specific services.--Nothing in this section shall be construed as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide coverage for specific mental health services, except to the extent that the failure to cover such services would result in a disparity between the coverage of mental health and medical and surgical benefits. ``(c) Small Employer Exemption.-- ``(1) In general.--This section shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) for any plan year of any employer who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year. ``(2) Application of certain rules in determination of employer size.--For purposes of this subsection-- ``(A) Application of aggregation rule for employers.--Rules similar to the rules under subsections (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986 shall apply for purposes of treating persons as a single employer. ``(B) Employers not in existence in preceding year.--In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. ``(C) Predecessors.--Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer. ``(d) Separate Application to Each Option Offered.--In the case of a group health plan that offers a participant or beneficiary two or more benefit package options under the plan, the requirements of this section shall be applied separately with respect to each such option. ``(e) In-Network and Out-of-Network Rules.--In the case of a plan or coverage option that provides in-network mental health benefits, out-of-network mental health benefits may be provided using treatment limitations or financial requirements that are not comparable to the limitations and requirements applied to medical and surgical benefits if the plan or coverage provides such in-network mental health benefits in accordance with subsection (a) and provides reasonable access to in- network providers and facilities. ``(f) Definitions.--For purposes of this section-- ``(1) Financial requirements.--The term `financial requirements' includes deductibles, coinsurance, co-payments, other cost sharing, and limitations on the total amount that may be paid by a participant or beneficiary with respect to benefits under the plan or health insurance coverage and shall include the application of annual and lifetime limits. ``(2) Medical or surgical benefits.--The term `medical or surgical benefits' means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage (as the case may be), but does not include mental health benefits. ``(3) Mental health benefits.--The term `mental health benefits' means benefits with respect to services, as defined under the terms and conditions of the plan or coverage (as the case may be), for all categories of mental health conditions listed in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM IV-TR), or the most recent edition if different than the Fourth Edition, if such services are included as part of an authorized treatment plan that is in accordance with standard protocols and such services meet the plan or issuer's medical necessity criteria. ``(4) Treatment limitations.--The term `treatment limitations' means limitations on the frequency of treatment, number of visits or days of coverage, or other similar limits on the duration or scope of treatment under the plan or coverage.''. (b) Clerical Amendment.--The table of contents in section 1 of such Act is amended by striking the item relating to section 712 and inserting the following new item: ``Sec. 712. Mental health parity.''. (c) Effective Date.--The amendments made by this section shall apply with respect to plan years beginning on or after January 1, 2006. SEC. 3. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE GROUP MARKET. (a) In General.--Section 2705 of the Public Health Service Act (42 U.S.C. 300gg-5) is amended to read as follows: ``SEC. 2705. MENTAL HEALTH PARITY. ``(a) In General.--In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health benefits, such plan or coverage shall not impose any treatment limitations or financial requirements with respect to the coverage of benefits for mental illnesses unless comparable treatment limitations or financial requirements are imposed on medical and surgical benefits. ``(b) Construction.-- ``(1) In general.--Nothing in this section shall be construed as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health benefits. ``(2) Medical management of mental health benefits.-- Consistent with subsection (a), nothing in this section shall be construed to prevent the medical management of mental health benefits, including through concurrent and retrospective utilization review and utilization management practices, preauthorization, and the application of medical necessity and appropriateness criteria applicable to behavioral health and the contracting and use of a network of participating providers. ``(3) No requirement of specific services.--Nothing in this section shall be construed as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide coverage for specific mental health services, except to the extent that the failure to cover such services would result in a disparity between the coverage of mental health and medical and surgical benefits. ``(c) Small Employer Exemption.-- ``(1) In general.--This section shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) for any plan year of any employer who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year. ``(2) Application of certain rules in determination of employer size.--For purposes of this subsection-- ``(A) Application of aggregation rule for employers.--Rules similar to the rules under subsections (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986 shall apply for purposes of treating persons as a single employer. ``(B) Employers not in existence in preceding year.--In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. ``(C) Predecessors.--Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer. ``(d) Separate Application to Each Option Offered.--In the case of a group health plan that offers a participant or beneficiary two or more benefit package options under the plan, the requirements of this section shall be applied separately with respect to each such option. ``(e) In-Network and Out-of-Network Rules.--In the case of a plan or coverage option that provides in-network mental health benefits, out-of-network mental health benefits may be provided using treatment limitations or financial requirements that are not comparable to the limitations and requirements applied to medical and surgical benefits if the plan or coverage provides such in-network mental health benefits in accordance with subsection (a) and provides reasonable access to in- network providers and facilities. ``(f) Definitions.--For purposes of this section-- ``(1) Financial requirements.--The term `financial requirements' includes deductibles, coinsurance, co-payments, other cost sharing, and limitations on the total amount that may be paid by a participant, beneficiary or enrollee with respect to benefits under the plan or health insurance coverage and shall include the application of annual and lifetime limits. ``(2) Medical or surgical benefits.--The term `medical or surgical benefits' means benefits with respect to medical or surgical services, as defined under the terms of the plan or coverage (as the case may be), but does not include mental health benefits. ``(3) Mental health benefits.--The term `mental health benefits' means benefits with respect to services, as defined under the terms and conditions of the plan or coverage (as the case may be), for all categories of mental health conditions listed in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM IV-TR), or the most recent edition if different than the Fourth Edition, if such services are included as part of an authorized treatment plan that is in accordance with standard protocols and such services meet the plan or issuer's medical necessity criteria. ``(4) Treatment limitations.--The term `treatment limitations' means limitations on the frequency of treatment, number of visits or days of coverage, or other similar limits on the duration or scope of treatment under the plan or coverage.''. (b) Effective Date.--The amendment made by this section shall apply with respect to plan years beginning on or after January 1, 2006. SEC. 4. PREEMPTION. Nothing in the amendments made by this Act shall be construed to preempt any provision of State law, with respect to health insurance coverage offered by a health insurance issuer in connection with a group health plan, that provides protections to enrollees that are greater than the protections provided under such amendments. Nothing in the amendments made by this Act shall be construed to affect or modify section 514 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144). SEC. 5. GOVERNMENT ACCOUNTABILITY OFFICE STUDY. (a) Study.--The Comptroller General shall conduct a study that evaluates the effect of the implementation of the amendments made by this Act on the cost of health insurance coverage, access to health insurance coverage (including the availability of in-network providers), the quality of health care, and other issues as determined appropriate by the Comptroller General. Such study also shall include an estimation of the costs of extending the provisions of such amendments to treatment of substance abuse and chemical dependency. (b) Report.--Not later than 2 years after the date of enactment of this Act, the Comptroller General shall prepare and submit to the appropriate committees of Congress a report containing the results of the study conducted under subsection (a).
summary: Paul Wellstone Mental Health Equitable Treatment Act of 2005 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service Act to prohibit a group health plan or group health coverage that provides both medical and surgical benefits and mental health benefits from imposing treatment limitations or financial requirements on the mental health benefits unless comparable limitations or requirements are imposed on medical and surgical benefits. Excludes such requirements for plans and coverage for small employers. Allows a plan or coverage that provides in-network mental health benefits to provide out-of-network mental health benefits using treatment limitations or financial requirements that are not comparable to those applied to medical-surgical benefits if the in-network mental health benefits are provided at parity with medical-surgical benefits and with reasonable access. Requires the Government Accountability Office (GAO) to: (1) study the effects of this Act on health insurance costs and access and quality of health care; and (2) provide a cost estimation of extending such requirements to the treatment of substance abuse and chemical dependency.