Download This Version in Microsoft Word format
TO ENACT THE "MENTAL HEALTH PARITY AND ADDICTION ACT OF 2009"; AND TO AMEND SECTION 38-71-880, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MEDICAL AND SURGICAL BENEFITS AND MENTAL BENEFITS COVERAGE, SO AS TO ADD PROVISIONS RELATING TO SUBSTANCE USE DISORDER COVERAGE, FINANCIAL REQUIREMENTS, AND TREATMENT LIMITATIONS AND TO PROVIDE FOR DEFINITIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be cited as the "Mental Health Parity and Addiction Equity Act of 2009".
SECTION 2. Section 38-71-880 of the 1976 Code, as last amended by Act 332 of 2006, is further amended to read:
"Section 38-71-880. (A)(1) In the case of health insurance coverage offered in connection with a group health plan that provides both medical and surgical benefits and mental health or substance use disorder benefits:
(a) if the coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the coverage may not impose any aggregate lifetime limit on mental health or substance use disorder benefits;
(b) if the coverage includes an aggregate lifetime limit, also referred to in this item as the 'applicable lifetime limit', on substantially all medical and surgical benefits, the coverage shall must either:
(i) apply the applicable lifetime limit both to the medical and surgical benefits to which it otherwise would apply and to mental health and substance use disorder benefits and not distinguish in the application of the limit between the medical and surgical benefits and mental health and substance use disorder benefits; or
(ii) not include any aggregate lifetime limit on mental health or substance use disorder benefits that is less than the applicable lifetime limit.
(c) In the case of coverage that is not described in subitem (a) or (b) and that includes no or different aggregate lifetime limits on different categories of medical and surgical benefits, the director of Insurance shall or his designee may promulgate regulations under which subitem (b) is applied to the coverage with respect to mental health and substance use disorder benefits by substituting for the applicable lifetime limit an average aggregate limit that is computed taking into account the weighted average of the aggregate lifetime limits applicable to the categories.
(2) In the case of health insurance coverage offered in connection with a group health plan that provides both medical and surgical benefits and mental health or substance use disorder benefits:
(a) if the coverage does not include an annual limit on substantially all medical and surgical benefits, the coverage may not impose any annual limit on mental health or substance use disorder benefits;
(b) if the coverage includes an annual limit on substantially all medical and surgical benefits, referred to as the 'applicable annual limit', the coverage shall must either:
(i) apply the applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health and substance use disorder benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health and substance use disorder benefits; or
(ii) not include any annual limit on mental health or substance use disorder benefits that is less than the applicable annual limit.
(c) In the case of coverage that is not described in subitem (a) or (b) and that includes no or different annual limits on different categories of medical and surgical benefits, the director of Insurance shall or his designee may promulgate regulations under which subitem (b) is applied to the coverage with respect to mental health and substance use disorder benefits by substituting for the applicable annual limit an average annual limit that is computed taking into account the weighted average of the annual limits applicable to the categories.
(3) In the case of a group health plan, or health insurance coverage offered in connection with a plan, that provides both medical and surgical benefits and mental health or substance use disorder benefits, the plan or coverage must ensure that:
(a) the financial requirements applicable to the mental health or substance use disorder benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan or coverage and there are no separate cost sharing requirements that are applicable only with respect to mental health or substance use disorder benefits; and
(b) the treatment of limitations applicable to the mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan or coverage and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.
(4) In the case of a plan or coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits, if the plan or coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage must provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the requirements of this section.
(B) To the extent consistent with Section 38-71-737 and any other another applicable state law, nothing in this section shall may be construed:
(1) as requiring health insurance coverage offered in connection with a group health plan to provide any mental health or substance use disorder benefits; or
(2) in the case of such coverage a group health plan or health insurance coverage offered in connection with a plan that provides such mental health or substance use disorder benefits, as affecting the terms and conditions, including cost sharing, limits on number of visits or days of coverage, and requirements relating to medical necessity, relating to the amount, duration, or scope of mental health benefits under the coverage of the plan or coverage relating to benefits under the plan or coverage, except as specifically provided in subsection (A) in regard to parity in the imposition of aggregate lifetime limits and annual limits for mental health benefits.
(C)(1)(a) This section shall does not apply to any a group health insurance coverage offered in connection with a group health plan for any plan year of a small employer.
(b)(2) For purposes of subitem (a) this subsection, 'small employer' means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least two but not more than fifty employees on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year.
(c)(3) For purposes of this item subsection:
(i)(a) All persons treated as a single employer under subsection (b), (c), (m), or (o) of Section 414 of the Internal Revenue Code of 1986 shall be are treated as one employer.
(ii)(b) In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such the employer is a small employer shall be is based on the average number of employees that it is reasonably expected such the employer will employ on business days in the current calendar year.
(iii)(c) Any A reference in this item subsection to an employer shall include includes a reference to any predecessor of the employer.
(2) This section shall not apply with respect to health insurance coverage offered in connection with a group health plan if the application of this section to such coverage results in an increase in the cost for such coverage of at least one percent.
(D) In the case of health insurance coverage offered in connection with a group health plan that offers a participant or beneficiary two or more benefit package options under the plan, subsections (A) and (C)(2), shall be the requirements of this section are applied separately with respect to each such option.
(E) For purposes of this section:
(1) 'Aggregate lifetime limit' means, with respect to benefits under health insurance coverage, a dollar limitation on the total amount that may be paid with respect to the benefits under the health insurance coverage with respect to an individual or other coverage unit.
(2) 'Annual limit' means, with respect to benefits under health insurance coverage, a dollar limitation on the total amount of benefits that may be paid with respect to the benefits in a twelve-month period under the health insurance coverage with respect to an individual or other coverage unit.
(3) 'Financial requirement' includes deductibles, copayments, coinsurance, and out-of-pocket expense, but excludes an aggregate lifetime limit and annual limit subject to subsections (A)(3)(a) and (A)(3)(b).
(4) 'Medical or surgical benefits' means benefits with respect to medical or surgical services, as defined under the terms of the plan, but does not include mental health benefits.
(4)(5) 'Mental health benefits' means benefits with respect to services for mental health services conditions, as defined under the terms of the plan, but does not include benefits with respect to treatment of substance abuse or chemical dependency and in accordance with applicable federal and state law.
(6) 'Predominant' means a financial requirement or treatment limit that is the most common or frequent of the type of requirement or limit.
(7) 'Substance use disorder benefits' means benefits with respect to services for substance use disorders, as defined under the terms of the plan and in accordance with applicable federal and state law.
(8) 'Treatment limitation' includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.
(F) This section does not apply to benefits for services furnished on or after December 31, 2006."
SECTION 3. This act takes effect upon approval by the Governor and applies to group health plans for plan years beginning after October 2, 2009.
This web page was last updated on February 10, 2009 at 12:44 PM