Insurance, Health, Accident

Plain English Breakdown

The bill summary and text do not provide specific details on enforcement mechanisms for mental health coverage parity.

Mental Health Coverage Parity Act

This act removes an exemption for group health plans that allows them to avoid covering mental health services if it increases costs by more than 1%, and requires parity in coverage between mental health, alcoholism, and drug dependency treatments.

What This Bill Does

• Removes the exemption that allows group health plans to avoid covering mental health services if it increases costs by more than 1%.
• Requires all health benefit plans, including TennCare, to provide coverage for mental health services equal to alcoholism and drug dependency treatments.
• Changes reporting requirements for insurance departments to include detailed information on parity in coverage and reimbursement rates for mental health services.
• Expands the list of eligible treatment facilities to include any residential or other mental health treatment facility licensed by the state.

Who It Names or Affects

• People with group health plans who need mental health services.
• Insurance companies providing health benefit plans in Tennessee.
• State agencies responsible for reporting on insurance compliance.

Terms To Know

Health Benefit Plan

A type of insurance plan that covers medical expenses, including hospital and medical service corporation contracts, policies from health insurers, or TennCare plans.

Mental Health Parity

The requirement for health insurance to cover mental health services equally with physical health services without imposing more restrictive conditions on coverage.

Limits and Unknowns

• The bill does not specify how the parity requirements will be enforced or monitored.
• It is unclear what additional criteria must be used to ensure that benefit determinations for alcoholism and drug dependence remain in parity with mental health disorders.
• The act takes effect on July 1, 2025, but it's uncertain if all stakeholders will comply by then.

Official Summary Text

COVERAGE FOR MENTAL HEALTH SERVICES

Present law requires
an
individual or group health benefit plan
to
provide coverage for mental health or alcoholism or drug dependency services in compliance with the federal
"
Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
." However, this
requirement does
not apply with respect to a group health plan if
it would
result in an increase in the cost under the plan of more than 1%.
This bill deletes the provision that exempts plans from the mandate if the mandate increases the plan's cost by m
ore than 1% and requires, instead, that
coverage for mental health treatment must remain in parity with coverage for alcoholism and drug dependence coverage
.
Present law
prohibit
s

alcoholism and drug dependence coverage
from being
less favorable than for
physical illness generally, subject to the same durational limits, dollar limits, deductibles and coinsurance factors. The offer of benefits must be subject to the right of the group policy or contract holder to reject the coverage or to select any alter
n
ative level of benefits if the right is offered by or negotiated with the insurer, service plan corporation or health maintenance organization.

Present law defines a health benefit plan as a
hospital or medical expense policy; health, hospital, or medi
cal service corporation contract; a policy or agreement entered into by a health insurer or a health maintenance organization contract offered by an employer; other plans administered by the state government; or a certificate issued under the policies, co
n
tracts, or plans
. This bill adds that a health benefit plan includes a
plan of coverage under TennCare or a successor program
.

REPORTING

Present law requires
the
department of commerce and insurance
to
issue a
n annual
report and provide an educational
presentation to the general assembly.

The report and presentation must
, among other things, i
dentify market conduct examinations and full scope examinations conducted or completed during the preceding
12
-month period and summarize the results of the exami
nations.

This discussion must
also
include
a
detailed explanation regarding parity in coverage and rates of reimbursement for mental health services and alcoholism and drug dependency services in compliance with
state laws on insurance
and
the mandatory m
ental health services under welfare. This bill changes what is required in the report to the extent that the report no longer must include information on compliance with welfare, and it must, instead, include a
detailed explanation regarding parity in cov
erage and rates of reimbursement for mental health services and alcoholism and drug dependency services in compliance with
this bill.

INCLUDED
MENTAL HEALTH TREATMENT FACILIT
IES

Present law requires a
ll group hospital and major medical policies and all
group hospital, medical and major medical service plans
,
that provide benefits for expenses arising from psychiatric disorders, mental or nervous conditions, alcoholism, drug dependence or medical complication of mental illness or intellectual disability,
to
reimburse for these benefits, if any, when the benefits are provided at a facility that is:



With respect to outpatient benefit, a community mental health center
.



With respect to inpatient benefits, a community mental health center that has facilities for inpatient care and that has received a certificate of need from the Tennessee health facilities commission certifying the necessity of the facility if required by law
.



For persons covered under a TennCare health benefit plan, a residential or other mental health treatment facility licensed
in this state
.

This bill adds to this list any
residential or other mental health treatment facility licensed
in this state.

Current Bill Text

SENATE BILL 1248
By Yarbro

HOUSE BILL 1291
By Powell

HB1291
003228
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4;
Title 8; Title 33; Title 39; Title 49; Title 53; Title 56;
Title 63; Title 68 and Title 71, relative to mental
health.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 56-7-2360, is amended by deleting
subdivisions (a)(1)(E) and (F) and substituting:
(E) "Health benefit plan":
(i) Means a hospital or medical expense policy; health, hospital, or
medical service corporation contract; a policy or agreement entered into by a
health insurer or a health maintenance organization contract offered by an
employer; other plans administered by the state government; or a certificate
issued under the policies, contracts, or plans; and
(ii) Includes a plan of coverage under TennCare or a successor program
provided for pursuant to title 71, chapter 5;
(F) "Health insurance carrier":
(i) Means an entity subject to this title, or subject to the jurisdiction of the
commissioner of commerce and insurance, that contracts with healthcare
providers in connection with a plan of health insurance, health benefits, or health
services; and
(ii) Includes a vendor, as defined in § 71-5-103, or an entity that provides
a health benefit plan of coverage under TennCare or a successor program
provided for pursuant to title 71, chapter 5;

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SECTION 2. Tennessee Code Annotated, Section 56-7-2360(b), is amended by
deleting "provided, that for purposes of a TennCare health benefit plan, additional criteria used
must ensure that benefit determination, including coverage and reimbursement for the treatment
of alcoholism or drug dependence, remain in parity with benefit determination for the treatment
of mental health disorders." and substituting "provided, further, that additional criteria used must
ensure that benefit determination, including coverage for the treatment of alcoholism or drug
dependence, remain in parity with benefit determination for the treatment of mental health
disorders.".
SECTION 3. Tennessee Code Annotated, Section 56-7-2360(c), is amended by
deleting the subsection and substituting:
(c) Notwithstanding another law to the contrary, a health benefit plan issued by a
health insurance carrier must provide coverage for mental health services and treatment
to the same extent that the health benefit plan provides coverage for the treatment of
alcoholism and drug dependence.
SECTION 4. Tennessee Code Annotated, Section 56-7-2360(e)(4)(E), is amended by
deleting the subdivision and substituting:
(E) A detailed explanation regarding parity in coverage and rates of
reimbursement for mental health services and alcoholism and drug dependency services
in compliance with § 56-7-2360(c);
SECTION 5. Tennessee Code Annotated, Section 56-7-2601(e), is amended by adding
the following as a new subdivision:
(4) A residential or other mental health treatment facility licensed under title 33,
chapter 2, part 4.
SECTION 6. Tennessee Code Annotated, Section 56-7-2601(g)(5), is amended by
deleting the semicolon at the end of the subdivision and substituting "; provided, that coverage

- 3 - 003228

for mental health treatment must remain in parity with coverage for alcoholism and drug
dependence coverage;".
SECTION 7. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to policies, plans, and contracts entered into, renewed, amended, or modified on or after
that date.