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July 25, 2002
ERIC Takes Stand on Mental Health Parity Mandates
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Mark Ugoretz, president of ERIC, prepared a statement for the hearing on Insurance Coverage of Mental Health Benefits before the Subcommittee on Health of the House Energy and Commerce Committee. In the statement, Ugoretz said that pending mental health "parity" bills, such as S.543 and H.R. 4066, "would force employers to reduce or modify their medical and surgical coverage in order to continue offering affordable mental health coverage. The bills would also severely limit the flexibility of both employers and employees at a time when health care costs are rising at an unprecedented rate."
Specifically, ERIC asserts that the bills go far beyond ensuring that persons treated for mental illness are subject to the same cost-sharing as persons treated for other illnesses. "These bills impose a 'parity' requirement that does not merely apply to employee cost-sharing (e.g. deductibles, co-payments, etc.)," said Ugoretz. "Instead, the general parity rule is so far sweeping that it applies to any 'financial restriction' and any 'treatment limitation,' thereby impacting nearly every aspect of health plan design and administration, as well as care management in general."
According to the press release, ERIC also maintains that the current bills would disrupt not just the mental health benefits employers currently provide, but the medical and surgical benefits currently provided. Parity advocates readily admit that cost-effective mental health benefits can only be provided through tightly managed plans. But the pending legislation would prohibit an employer offering tightly managed mental health plans to offer loosely managed medical and surgical benefits through a PPO or fee-for-service indemnity plan, both of which are very popular plans among employees.
ERIC also warns that the "parity" requirement in both pieces of legislation would interfere with employers' ability to provide different levels of coverage and benefit categories to its employees. "The result is employers are effectively required to use a one-size-fits all benefit design across all categories of benefits," explained Ugoretz.
The ERISA Industry Committee (ERIC) is a non-profit association committed to the advancement of employee retirement, health, and welfare benefit plans of America's largest employers and represents exclusively the employee benefits interests of major employers.