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New Survey Shows Positive Employer Compliance With Mental Health Parity Act Of 1996 And Negative Cost Impact

Chris Marshall
For Immediate Release
1 Apr 99
The Substance Abuse and Mental Health Services Administration (SAMHSA) released a survey of employers this week on the implementation of the Mental Health Parity Act (MHPA) that suggests growing acceptance of equal benefits for brain disorders and negative cost impact. About half of the responding employers subject to the MHPA were already in compliance with the Act before the law became effective in January 1998. More importantly, the report showed that the majority of the employers who made changes to comply with the MHPA responded that their costs did not increase and they made no major changes to other benefit provisions.

The data was part of a larger health care issues survey, the Mercer/Foster Higgins "National Survey of Employer Sponsored Health Plans," which took place from July through September in 1998. The major findings include:

  • Nearly half of those employers subject to the Act were already in compliance before the January 1, 1998 effective date.

  • Slightly more than a quarter of the respondents retained separate mental health limits, but raised them, or included mental health expenses with other expenses in determining annual or lifetime dollar limits.

  • There had been concern in the mental health community that Mental Health Parity Act and similar parity mandates might result in employers dropping mental health coverage altogether, or increasing other limits in compensation. The report indicates, however, that only a small proportion of employers took such actions.

  • Among employers who made changes as a result of the Act, the large majority (86 percent) indicated that they made no compensatory changes to their benefits, primarily because expected cost increases were judged minimal or nonexistent.

The Mental Health Parity Act of 1996, also known as the Domenici-Wellstone Parity Act, is a landmark law that for the first time declared that discriminatory insurance policies against coverage for serious brain disorders are unjust. Although the law does not provide complete parity, it equates annual and lifetime limits for mental illnesses to those for medical/surgical coverage. However, due to other provisions in the law that allow health plans to manipulate the number of inpatient and outpatient days, copays and deductibles, the impact for consumers has been minimal. For more information on the MHPA go to the NAMI website at

For more information on this survey and background information, go to on the SAMHSA website.