House Passes Association Health Plan Legislation; Proposal Would Weaken State Mental Illness Insurance Parity Laws
July 29, 2005
On July 26, the House cleared legislation vastly expanding multi-employer Association Health Plans (AHPs) and potentially undermining existing state laws that require health plans to cover treatment for mental illness on the same terms and conditions as all other illnesses – commonly referred to as parity. The vote was 263-165. This proposal (HR 525) would significantly expand the scope of a federal law (known as ERISA), that exempts self-insured employer health plans from state regulation. By expanding ERISA, HR 525 would encourage employers that currently offer health plans for their workers (and their families) to switch away from coverage that meets a parity standard, i.e. plans that cover mental illnesses the same as all other illnesses.
The AHPs envisioned by HR 525 would be exempt from all state insurance laws, including: state parity laws, minimum coverage standards for mental illness treatment and other consumer protections. The supporters of AHPs assert that HR 525 would help make employer coverage more affordable and ease the growth among the uninsured. However, several recent studies have found that AHPs are not effective in reaching uninsured workers and their families and are more likely to fail as a result of insolvency.
During debate on HR 525, Representative Rush Holt (D-NJ) was prevented by House leaders from offering an amendment to require AHPs to comply with relevant state mental illness insurance parity laws. NAMI strongly supported the Holt Amendment as an important and badly needed improvement to HR 525.
Action on HR 525 now shifts to the Senate, where expansion of AHPs has been blocked in the past. NAMI advocates are strongly encouraged to contact their Senators to urge them to:
- Support inclusion of a requirement for AHPs to comply with state mental illness parity laws, and
- Oppose HR 525 if such a requirement is not included.
Remind your Senators that this well-intentioned legislation would have enormous negative consequences for workers and their families.
In NAMI’s view, HR 525 would:
- severely undermine the effectiveness of the 34 state mental illness insurance parity laws,
- fail to address the problem of the uninsured – studies demonstrate that most employers that would switch to AHP coverage already provide coverage on their own, and
- place workers and their families at risk of losing coverage – studies show that AHPs have a long history of plan failures and insolvency (AHPs would not have to meet current solvency and reserve standards enforced by state insurance commissioners).
All Senators can be reached by calling the Capitol Switchboard at 202-224-3121 or online through www.congress.org.
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