Information on NEW State-Mandated Mental Health Benefits Through Timothy's Law

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MENTAL HEALTH PARITY (aka “Timothy’s Law”)

Claims Update Information

 
On January 1, 2007, a new law known as "Timothy’s Law" went into effect in New York State. This law amended the Insurance Law to require that most group health insurance policies provide specified benefits for mental, nervous and emotional illnesses.  
 
The policy forms and premium adjustments filed by Empire have been approved by the NYS Department of Insurance. We are now in the process of implementing the mandated benefits according to the information below.  
 
Note that coverage for biologically based mental illness for adults and children, and for serious emotional disturbances for children is applicable to all large groups and those small groups that purchase an optional rider. See below question 3 regarding what applies to small vs. large groups. 
 

1. What is “Timothy’s Law?”

“Timothy’s Law” is a new New York State law requiring health plans that issue group insurance providing inpatient benefits to cover inpatient and outpatient mental health services for adults and children. 
 

2. How do benefits change under Timothy’s Law?

There are three key coverage provisions: 

a. Every insured person with either a large or a small group policy now has coverage for active treatment of mental illness for a minimum of thirty days of inpatient hospital care and treatment for a minimum of twenty outpatient visits. .

b. Except for the 30/20 days/visits rule, above, all other benefits for mental health services must be provided on a basis that is comparable to medical benefits under your contract or Certificate of Coverage

c. Large groups (over 50 eligible employees) must cover

Both adults and children who have been diagnosed with “biologically based mental illness” and

Children (under the age of 18) with “serious emotional disturbances,” as these terms are defined by the new law.

 

3. What are the differences between small and large groups under the law?

must provide

The minimum 30 days inpatient and 20 visits outpatient treatment coverage on the same terms as apply to medical conditions.

groups (over 50 eligible employees) must also provide coverage for adults and children with biologically based mental illness and children children under the age of 18 with serious emotional disturbances on comparable terms as apply to medical conditions.
groups may purchase an optional rider to add coverage for biologically-based mental illness and serious emotional disturbances in children, as these conditions are defined by the law (See questions 5 and 6, below). This coverage will apply prospectively only.
State will subsidize some of the cost to carriers for providing the mandated benefits to small groups. It is the carriers’ responsibility to apply for the subsidy and adjust premiums accordingly. See below for details.
that ASO groups are not subject to the law, although they may elect to modify their coverage to provide the same benefits.
 

4. What is mental health parity?

Covered mental health benefits are subject to terms and conditions of the policy comparable to other medical benefits such as copayments, deductibles, coinsurance, maximums, and provider network limitations.Except for the 30/20 days/visits limitations, there can be no limitations on treatment of mental illness unless the same limits apply to treatment of other medical conditions. Nor can the costs be higher. Here are a couple of implementation specifics: 

If there is a split co-pay, mental health will be charged at the specialist rate.

If a plan currently has a mental health copay that is higher, it will be lowered to the specialist rate.

Out-of-network access rules must be the same for both mental health and medical. Formerly it was common that many non-HMO contracts would have both in- and out-of-network benefits but ONLY mental health was covered in-network, but this is no longer permitted.

 

5. What are covered biologically based mental illnesses?

The term “biologically based mental illness” under the law means a mental, nervous or emotional condition that is caused by a biological disorder of the brain which results in a clinically significant, psychological syndrome or pattern that substantially limits the function of the person with the illness. The law provides for large group coverage of these illnesses in both children and adults. The following disorders satisfy the definition of a biologically based mental illness: 

schizophrenia/psychotic disorders

major depression

bipolar disorder

obsessive-compulsive disorder

delusional disorders

panic disorder

bulimia

anorexia

 

6. What are covered serious emotional disturbances?

The law provides for large group coverage of these conditions in children under the age of 18, which it defines as the following diagnoses: 

attention deficit disorder (ADD)

disruptive behavior disorder

pervasive development disorder (PDD)

 
when one or more of the following behavior/risk factors also exist 

serious suicidal symptoms or other life-threatening self-destructive behaviors

significant psychotic symptoms (hallucination, delusions, bizarre behaviors)

behavior caused by emotional disturbances that place the child at risk of causing personal injury or significant property damage

behavior caused by serious emotional disturbances that place the child at substantial risk of removal from the home.

 

7. What is the effective date of “Timothy’s Law?”

The new law was effective January 1, 2007. We have begun implementing the new law as of this date; however, due to the short time between this law’s adoption and its effective date, implementation was not complete by January 1. Please be assured that we are using our best efforts to comply with the new law.  
 

8. When will members become entitled to the new benefit?

The actual effective date and specific benefits provided by Timothy’s Law that will apply to your group are based on the effective date of your plan and the type of plan you have. Regarding the effective date: 

If your health plan was issued on or renewed as of January 1, 2007, these new benefits are now in effect.

If your health plan was issued or renewed any time after January 1, 2007, these new benefits become effective on the issuance or renewal date.

 

9. Are there exceptions to the law?

Direct Pay and Government Programs: If you are covered under an HMO direct pay contract, Healthy New York or Child Health Plus contract, your benefits will not change. The new law does not apply to these types of contracts. 
Hospital Only Contracts: Plans that provide hospital-only coverage may limit the outpatient benefit required under Timothy’s Law to facility-based care. 

ASO Coverage: ASO coverage is not subject to the law, although they may elect to modify their coverage to provide the same benefits.

 
Prescription Coverage: If a benefit contract does not cover prescription drug, then drugs to treat mental illness are not required to be covered.  
 

10. As a small group (fewer that 51 eligible employees), how will the new law affect my premiums?

 
If your group health plan became effective on or after 1/1/2007, or if it has already been renewed this year:  
mandated benefits became effective on your group health plan effective or renewal date
group is entitled to purchase an optional rider to add coverage for biologically-based mental illness and serious emotional disturbances in children children under the age of 18, as these conditions are defined by the law. This coverage will apply prospectively only.
policy premium may already reflect any necessary premium adjustments associated with the mandate. Where this is the case, no further adjustments are necessary.
policy premium may not yet reflect any necessary premium adjustments associated with the mandate, even though your group is currently eligible for the expanded benefits. Where this is the case, Empire will apply any necessary premium adjustment associated with the mandate retroactively to all paid premiums back to your 2007 contract effective or renewal date, resulting in the following:

a. a one-time credit to your next scheduled premium bill 

b. we will adjust your premium bills going forward, through your next renewal, to reflect any necessary adjustments associated with the mandate

c. your next renewal rate will reflect any necessary premium adjustments associated with the mandate

 
If your group health plan is scheduled to renew on an upcoming date in 2007:  

your group will automatically become entitled to the mandated benefits on your renewal date.

your renewal rate will reflect any necessary premium adjustments associated with the mandate.

your group will be entitled to purchase an optional rider to add coverage for biologically-based mental illness and serious emotional disturbances in children children under the age of 18, to be effective on your renewal date.

 

11. As a large group (greater that 50 eligible employees), how will the new law affect my premiums?

For groups with non-HMO contracts effective or renewed in 2007: 

the mandated benefits are or will become effective as of your 2007 effective or renewal date.

if your group is already eligible for the mandated benefits, Empire will not bill retroactively for the cost associated with that benefit.

Empire will apply an additional cost per contract per month to premiums for contracts going forward to account for the mandated benefits, tentatively beginning with your next scheduled premium bill.

your 2008 renewal rate will reflect any necessary premium adjustments associated with the mandate.

 
**If your group is covered under an Empire PPO group health plan, and/or you have a "minimum premium" funding arrangement, contact your Empire Representative as the specifics about these changes may be different for your group.  
 
For groups with HMO contracts effective or renewed in 2007: 

the mandated benefits are effective beginning on your 2007 effective or renewal date.

if your group is already eligible for the mandated benefits, Empire will not bill retroactively for the cost associated with that benefit.

renewal rates for contracts with an effective date on or after October 1,2007 will reflect any necessary premium adjustments associated with the mandate.

 

12. How will the state pay the cost of the premium increase for small groups?

The law requires the state to cover the cost of providing the 30 inpatient/20 outpatient days/visits benefit to groups with 50 or fewer eligible employees. 
It is the carriers’ responsibility to apply for the subsidy and adjust premiums accordingly. There is no action required on the part of employers to facilitate this process. 
 

13. How do the new benefits work?

The treatment for biologically based mental illness/serious emotional disturbances with children counts against the 30 inpatient/20 outpatient benefit. In other words, the 30 inpatient/20 outpatient days/visits limit is the base benefit and applies to all coverage. Members are only entitled to additional coverage for the biologically based conditions and children under the age of 18 with serious emotional disturbances once the 30 inpatient/20 outpatient limit has been exhausted. 
 

14. How will members be affected?

Employees covered under your group health plan in NYS are or will become eligible for the mandated benefits as noted, above.  
Empire will notify all members in writing about the coverage and claims processing changes that may affect them, including providing them with the appropriate coverage rider that applies under their health plan.  
Any 2007 claims eligible for but not processed in accordance with the Mental Health Parity mandate will be reprocessed and adjusted as appropriate and Empire will issue an updated Explanation of Benefits to the member. 
 

15. How will providers be affected?

Currently, the Plan continues to make the necessary system changes to administer the new law. We will work wherever possible with providers as the changes are implemented to identify claims that may require retrospective adjustment to reflect the correct reimbursement and cost sharing amounts. 
Providers and members should be assured that mental health benefits will be covered for members in compliance with this new law. We will work with providers and members to correct claims that were not properly adjudicated during this implementation period. 
 

16. How will this mandate affect members of the State, City and Federal Employer Program?

Mental Health benefits for members of the State Empire Plan are covered by GHI, so while the mandate does apply to them, it will be administered by GHI. GHI is therefore responsible for the required notice mailing and other implementation actions. On the other hand, we are the insurer for the State for an HMO plan. For this plan, we administer the HMO benefits; we will administer the mandate; and we will be doing the required notice mailing. 
The Federal Employee Program is not covered under the NY State Mental Health Parity Mandate. 
Mental health benefits for the NY City indemnity plan are covered by GHI, so while the mandate does apply, it will be administered by GHI. GHI is therefore responsible for the required notice mailing and other implementation actions. On the other hand, we also are the insurer for the City for HMO, EPO and PPO plans; for these plans, we will administer the mandate and will be doing the required notice mailing.  

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