GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	3 

SENATE BILL 400*
Pensions & Retirement and Insurance Committee Substitute Adopted 4/28/97
Third Edition Engrossed 4/30/97

Short Title:  Mental Health Parity.	(Public)

─────────────────────────────────────── 
Sponsors:

─────────────────────────────────────── 
Referred to:  

─────────────────────────────────────── 

March 17, 1997

A BILL TO BE ENTITLED
AN ACT TO REQUIRE PARITY IN HEALTH INSURANCE FOR MENTAL ILLNESS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 58-50-155 is amended by adding the following new subsection to read:
"( a2)	Notwithstanding G.S. 58-50-125(c), the standard health plan developed and approved under G.S. 58-50-125 shall provide coverage for the treatment of mental illness that is at least equal to the coverage required by G.S. 58-51-55.  The plan may use a case management program in accordance with G.S. 58-51-55.
Section 2.  G.S. 58-51-55 reads as rewritten:
"§ 58-51-55.  No discrimination against the mentally ill and chemically dependent.
(a)	As used in this section, the term:
(1)	'Mental illness' has the same meaning as defined in G.S. 122C-3(21); and
(2)	'Chemical dependency' has the same meaning as defined in G.S. 58-51-50
with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-IV or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.
(b)	No insurance company licensed in this State under this Chapter shall, solely because an individual to be insured has or had a mental illness or chemical dependency:
(1)	Refuse to issue or deliver to that individual any policy that affords benefits or coverages for any medical treatment or service for physical illness or injury;
(2)	Have a higher premium rate or charge for physical illness or injury coverages or benefits for that individual; or
(3)	Reduce physical illness or injury coverages or benefits for that individual.
(c)	Nothing in this section prevents any insurance company from excluding from coverage any physical illness or injury or chemical dependency which has existed previous to coverage of the individual by the insurance company or from refusing to issue or deliver to that individual any policy because of the underwriting of any physical condition whether or not related to chemical dependency. 
	(d)	Every insurer that writes a policy or contract of group or blanket health insurance or group or blanket accident and health insurance shall provide to its insureds benefits for the necessary care and treatment of mental illness that are not less favorable than benefits for physical illness generally.  Benefits for treatment of mental illness shall be subject to the same limits as are benefits for physical illness generally.  For purposes of this subdivision, 'limits' includes durational limits, deductibles, coinsurance factors, copayments, maximum out-of-pocket limits, annual and lifetime dollar limits, and any other dollar limits or fees for covered services.
	(e) An insurer may use a case management program for mental illness benefits to evaluate and determine medically necessary and medically appropriate care and treatment for each patient, provided that the program complies with rules adopted by the Commissioner of Insurance.   These rules shall ensure that case management programs are not designed to avoid the requirements of this section concerning parity between the benefits for mental illness and those for physical illness generally.
(f)	Subsections (d) and (e) of this section apply only to group health insurance contracts covering 5 or more employees. The remainder of this section applies only to group health insurance contracts covering 20 or more employees.
(g)	Subsections (d) and (e) of this section shall not apply to a policy or contract if the insurer demonstrates to the Commissioner that compliance has increased the cost of the policy by two percent (2%) or more on an annual basis."
Section 3. G.S. 58-65-90 reads as rewritten:
"§ 58-65-90.  No discrimination against the mentally ill and chemically dependent.
(a)	As used in this section, the term:
(1)	'Mental illness' has the same meaning as defined in G.S. 122C-3(21); and
(2)	'Chemical dependency' has the same meaning as defined in G.S. 58-65-75
with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-IV or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.
(b)	No corporation governed by this Chapter shall, solely because an individual to be insured has or had a mental illness or chemical dependency:
(1)	Refuse to issue or deliver to that individual any individual or group hospital, dental, medical or health service contract in this State that affords benefits or coverage for medical treatment or service for physical illness or injury;
(2)	Have a higher premium rate or charge for physical illness or injury coverages or benefits for that individual; or
(3)	Reduce physical illness or injury coverages or benefits for that individual.
(c)	Nothing in this section prevents any hospital or medical plan from excluding from coverage any physical illness or injury or chemical dependency which has existed previous to coverage of the individual by the hospital or medical plan or from refusing to issue or deliver to that individual any policy because of the underwriting of any physical condition whether or not related to chemical dependency. 
 	(d)	(d)	Every group insurance certificate or group subscriber contract under a hospital or medical plan subject to this Article shall provide to its insureds benefits for the necessary care and treatment of mental illness that are not less favorable than benefits for physical illness generally.  Benefits for treatment of mental illness shall be subject to the same limits as are benefits for physical illness generally.  For purposes of this subsection, 'limits' includes durational limits, deductibles, coinsurance factors, copayments, maximum out-of-pocket limits, annual and lifetime dollar limits, and any other dollar limits or fees for covered services.
(e)	The service corporation may use a case management program for mental illness benefits to evaluate and determine medically necessary and medically appropriate care and treatment for each patient, provided that the program complies with rules adopted by the Commissioner of Insurance.   These rules shall ensure that case management programs are not designed to avoid the requirements of this section concerning parity between the benefits for mental illness and those for physical illness generally.
(f)	Subsections (d) and (e) of this section apply only to group contracts covering 5 or more employees. The remainder of this section applies only to group contracts covering 20 or more employees.
(g)	Subsections (d) and (e) of this section shall not apply to a subscriber contract or certificate if the service corporation demonstrates to the Commissioner that compliance has increased the cost of the contract or certificate by two percent (2%) or more on an annual basis."
Section 4.  G.S. 58-67-75 reads as rewritten:
"§ 58-67-75.  No discrimination against the mentally ill and chemically dependent.
(a)	As used in this section, the term:
(1)	'Mental illness' has the same meaning as defined in G.S. 122C-3(21); and
(2)	'Chemical dependency' has the same meaning as defined in G.S. 58-67-70
with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-IV or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.
(b)	No health maintenance organization governed by this Chapter shall, solely because an individual has or had a mental illness or chemical dependency:
(1)	Refuse to enroll that individual in any health care plan covering physical illness or injury;
(2)	Have a higher premium rate or charge for physical illness or injury coverages or benefits for that individual; or
(3)	Reduce physical illness or injury coverages or benefits for that individual.
(c)	Nothing in this section prevents any health maintenance organization from excluding from coverage any physical illness or injury or chemical dependency which has existed previous to coverage of the individual by the health maintenance organization or from refusing to issue or deliver to that individual any policy because of the underwriting of any physical condition whether or not related to chemical dependency.
	(d)	Every health maintenance organization that issues a health care plan on a group basis for medical and hospitalization care shall provide to its insureds benefits for the necessary care and treatment of mental illness that are not less favorable than benefits for physical illness generally.  Benefits for treatment of mental illness shall be subject to the same limits as are benefits for physical illness generally.  For purposes of this subsection, 'limits' includes durational limits, deductibles, coinsurance factors, copayments, maximum out-of-pocket limits, annual and lifetime dollar limits, and any other dollar limits or fees for covered services.
(e)	A health maintenance organization may use a case management program for mental illness benefits to evaluate and determine medically necessary and medically appropriate care and treatment for each patient, provided that the program complies with rules adopted by the Commissioner of Insurance.   These rules shall ensure that case management programs are not designed to avoid the requirements of this section concerning parity between the benefits for mental illness and those for physical illness generally.
(f)	This section applies only to group contracts covering five or more employees.
(g)	Subsections (d) and (e) of this section shall not apply to a health care plan if the HMO demonstrates to the Commissioner that compliance has increased the cost of the plan by two percent (2%) or more on an annual basis."
Section 5. This act is effective when it becomes law and applies to contracts issued, delivered, or renewed on or after January 1, 1998.  This act expires October 1, 2001.