GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2007

S                                                                                                                                                     2

SENATE BILL 1434

Corrected Copy 3/27/07

 

 

 

Short Title:     Mental Health Parity.

(Public)

Sponsors:

Senators Atwater;  Cowell, Garrou, and Graham.

Referred to:

Commerce, Small Business and Entrepreneurship.

March 26, 2007

 

A BILL TO BE ENTITLED

AN ACT TO REQUIRE PARITY IN HEALTH INSURANCE COVERAGE FOR MENTAL ILLNESS AND CHEMICAL DEPENDENCY.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 58-51-50 reads as rewritten:

" 58-51-50.  Coverage for chemical dependency treatment.

(a)       Definitions. - As used in this section, the term "chemical term:

(1)       'Chemical dependency' means the pathological use or abuse of alcohol or other drugs in a manner or to a degree that produces an impairment in personal, social or occupational functioning and which may, but need not, include a pattern of tolerance and withdrawal.

(2)       'Health benefit plan' has the same meaning as in G.S. 58-3-167.

(3)       'Insurer' has the same meaning as in G.S. 58-3-167.

(b)       Every insurer that writes a policy or contract of group or blanket health insurance or group or blanket accident and health insurance that is issued, renewed, or amended on or after January 1, 1985, shall offer to its insureds shall provide in each group health benefit plan benefits for the necessary care and treatment of chemical dependency that are not less favorable than benefits for physical illness generally. Except as provided in subsection (c) of this section, benefits Benefits for treatment of chemical dependency shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors limits as are benefits for physical illness generally. For purposes of this subsection, 'limits' includes durational limits, deductibles, coinsurance factors, co-payments, maximum out-of-pocket limits, annual and lifetime dollar limits, and any other dollar limits or fees for covered services.

(b1)     Weighted Average. - If a group health benefit plan contains annual limits, lifetime limits, co-payments, deductibles, or coinsurance only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the health benefit plan, then the insurer may impose limits on the chemical dependency treatment benefits based on a weighted average of the respective annual, lifetime, co-payment, deductible, or coinsurance limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(b2)     Case Management. - An insurer may use a case management program for chemical dependency treatment 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. These rules shall ensure that case management programs are not designed to avoid the requirements of this section concerning parity between the benefits for chemical dependency treatment and those for physical illness generally.

(b3)     Medical Necessity. - Nothing in this section prohibits a group health benefit plan from managing the provision of benefits through common methods, including, but not limited to, preadmission screening, prior authorization of services, or other mechanisms designed to limit coverage to services for chemical dependency treatment only to those that are deemed medically necessary.

(c)       Every group policy or group contract of insurance that provides benefits for chemical dependency treatment and that provides total annual benefits for all illnesses in excess of eight thousand dollars ($8,000) is subject to the following conditions:

(1)       The policy or contract shall provide, for each 12-month period, a minimum benefit of eight thousand dollars ($8,000) for the necessary care and treatment of chemical dependency.

(2)       The policy or contract shall provide a minimum benefit of sixteen thousand dollars ($16,000) for the necessary care and treatment of chemical dependency for the life of the policy or contract.

(d)       Provisions for benefits for necessary care and treatment of chemical dependency in group policies or group contracts of insurance shall provide benefit payments for the following providers of necessary care and treatment of chemical dependency:

(1)       The following units of a general hospital licensed under Article 5 of General Statutes Chapter 131E:131E of the General Statutes:

a.         Chemical dependency units in licensed facilities; facilities licensed after October 1, 1984;

b.         Medical units;

c.         Psychiatric units; and

(2)       The following facilities or programs licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C: under Article 2 of Chapter 122C of the General Statutes:

a.         Chemical dependency units in psychiatric hospitals;

b.         Chemical dependency hospitals;

c.         Residential chemical dependency treatment facilities;

d.         Social setting detoxification facilities or programs;

e.         Medical detoxification or programs; and

(3)       Duly licensed physicians and duly licensed practicing psychologists and certified professionals working under the direct supervision of such physicians or psychologists in facilities described in (1) and (2) above and in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C.under Article 2 of Chapter 122C of the General Statutes.

(4)       Duly licensed clinical social workers, duly certified substance abuse professionals, and licensed professional counselors working within the scope of practice in facilities described in subdivisions (1) and (2) of this subsection and in day/night programs or outpatient treatment facilities licensed under Article 2 of Chapter 122C of the General Statutes.

Provided, however, that nothing in this subsection shall prohibit any policy or contract of insurance from requiring the most cost effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency.

(e)       Coverage for chemical dependency treatment as described in this section shall not be applicable to any group policy holder or group contract holder who rejects the coverage in writing. "

SECTION 2.  G.S. 58-51-55 reads as rewritten:

" 58-51-55.  No discrimination against the mentally ill and chemically dependent.dependent individuals.

(a)       Definitions. - As used in this section, the term:

(1)       'Mental illness' has the same meaning as defined in G.S. 122C-3(21); andG.S. 122C-3(21), with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-IV, or a subsequent edition published by the American Psychiatric Association, except those mental disorders coded in the DSM-IV or subsequent edition as substance-related disorders (291.0 through 292.9 and 303.0 through 305.9) and those coded as 'V' codes.

(2)       'Chemical dependency' has the same meaning as defined in G.S. 58-51-5058-51-50, with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-IV, or subsequent editions of this manual.

with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-3-R or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.

(b)       Coverage of Physical Illness. - 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.

(b1)     Coverage of Mental Illness. - A policy that covers both physical illness or injury and mental illness may not impose a lesser lifetime or annual dollar limitation on the mental health benefits than on the physical illness or injury benefits, subject to the following:

(1)       A lifetime limit or annual limit may be made applicable to all benefits under the policy, without distinguishing the mental health benefits.

(2)       If the policy contains lifetime limits only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the policy, the insurer may impose a lifetime limit on the mental health benefits that is based on a weighted average of the respective lifetime limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(3)       If the policy contains annual limits only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the policy, the insurer may impose an annual limit on the mental health benefits that is based on a weighted average of the respective annual limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(4)       Except as otherwise provided in this section, the policy may distinguish between mental illness benefits and physical injury or illness benefits with respect to other terms of the policy, including coinsurance, limits on provider visits or days of coverage, and requirements relating to medical necessity.

(5)       If the insurer offers two or more benefit package options under a policy, each package must comply with this subsection.

(6)       This subsection does not apply to a policy if the insurer can demonstrate to the Commissioner that compliance will increase the cost of the policy by one percent (1%) or more.

(7)       This subsection expires October 1, 2001, but the expiration does not affect services rendered before that date.

(c)       Mental Illness or Chemical Dependency Coverage Not Required. - Nothing in this section requires an insurer to offer coverage for mental illness or chemical dependency, except as provided in G.S. 58-51-50.

(d)       Applicability. - Subsection (b1) of this section applies only to group health insurance contracts, other than excepted benefits as defined in G.S. 58-68-25, covering more than 50 employees. The remainder of this section applies only to group health insurance contracts covering 20 or more employees. For purposes of this section, "group health insurance contracts" include MEWAs, as defined in G.S. 58-49-30(a)."

SECTION 3.  Article 3 of Chapter 58 of the General Statutes is amended by adding the following new section to read:

" 58-3-220. Mental illness benefits coverage.

(a)       Mental Health Parity Requirement. - An insurer shall provide in each group health benefit plan benefits for the necessary care and treatment of mental illness that are no less favorable than benefits for physical illness generally. Benefits for treatment of mental illness shall be subject to the same limits as benefits for physical illness generally. For purposes of this subsection, 'limits' includes durational limits, deductibles, coinsurance factors, co-payments, maximum out-of-pocket limits, annual and lifetime dollar limits, and any other dollar limits or fees for covered services.

(b)       Weighted Average. - If a health benefit plan contains annual limits, lifetime limits, co-payments, deductibles, or coinsurance only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the health benefit plan, then the insurer may impose limits on the mental health benefits based on a weighted average of the respective annual, lifetime, co-payment, deductible, or coinsurance limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(c)       Case Management. - 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. These rules may ensure only that case management programs are not designed to avoid the requirement of this section for parity between the benefits for mental illness and those for physical illness generally.

(d)       Medical Necessity. - Nothing in this section prohibits a group health benefit plan from managing the provision of benefits through common methods, including, but not limited to, preadmission screening, prior authorization of services, or other mechanisms designed to limit coverage to services for mental illness only to those that are deemed medically necessary.

(e)       Definitions. - As used in this section:

(1)       'Health benefit plan' has the same meaning as in G.S. 58-3-167.

(2)       'Insurer' has the same meaning as in G.S. 58-3-167.

(3)       'Mental illness' has the same meaning as in G.S. 122C-3(21), with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-IV, or a subsequent edition published by the American Psychiatric Association, except those mental disorders coded in the DSM-IV or subsequent edition as substance-related disorders (291.0 through 292.9 and 303.0 through 305.9) and those coded as 'V' codes."

SECTION 4.  G.S. 58-65-75 reads as rewritten:

" 58-65-75.  Coverage for chemical dependency treatment.

(a)       Definition. - As used in this section, the term 'chemical dependency' means the pathological use or abuse of alcohol or other drugs in a manner or to a degree that produces an impairment in personal, social, or occupational functioning and which may, but need not, include a pattern of tolerance and withdrawal.

(b)       Chemical Dependency Parity Requirement. - Every group insurance certificate or group subscriber contract under any hospital or medical plan governed by this Article and Article 66 of this Chapter that is issued, renewed, or amended on or after January 1, 1985, shall offer shall provide to its insureds benefits for the necessary care and treatment of chemical dependency that are not less favorable than benefits for physical illness generally. Except as provided in subsection (c) of this section, benefitsBenefits for chemical dependency shall be subject to the same durational limits, dollar limits, deductibles, and coinsrance factors limits as are benefits for physical illness generally. For purposes of this subsection, 'limits' includes durational limits, deductibles, coinsurance factors, co-payments, maximum out-of-pocket limits, annual and lifetime dollar limits, and any other dollar limits or fees for covered services.

(b1)     Weighted Average. - If a hospital or medical plan governed by this Article contains annual limits, lifetime limits, co-payments, deductibles, or coinsurance only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the plan, then the group insurance certificate or group subscriber contract may impose limits on the chemical dependency treatment benefits based on a weighted average of the respective annual, lifetime, co-payment, deductible, or coinsurance limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(b2)     Case Management. - A group insurance certificate or group subscriber contract may use a case management program for chemical dependency treatment 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. These rules shall ensure that case management programs are not designed to avoid the requirements of this section concerning parity between the benefits for chemical dependency treatment and those for physical illness generally.

(b3)     Medical Necessity. - Nothing in this section prohibits a hospital or medical plan governed by this Article from managing the provision of benefits through common methods, including, but not limited to, preadmission screening, prior authorization of services, or other mechanisms designed to limit coverage to services for chemical dependency treatment only to those that are deemed medically necessary.

(c)       Every group insurance certificate or group subscriber contract that provides benefits for chemical dependency treatment and that provides total annual benefits for all illnesses in excess of eight thousand dollars ($8,000) is subject to the following conditions:

(1)       The certificate or contract shall provide, for each 12-month period, a minimum benefit of eight thousand dollars ($8,000) for the necessary care and treatment of chemical dependency.

(2)       The certificate or contract shall provide a minimum benefit of sixteen thousand dollars ($16,000) for the necessary care and treatment of chemical dependency for the life of the certificate or contract.

(d)       Provisions for benefits for necessary care and treatment of chemical dependency in group certificates or group contracts shall provide for benefit payments for the following providers of necessary care and treatment of chemical dependency:

(1)       The following units of a general hospital licensed under Article 5 of General Statutes Chapter 131E:Chapter 131E of the General Statutes:

a.         Chemical dependency units in facilities licensed after October 1, 1984;licensed facilities;

b.         Medical units;

c.         Psychiatric units; and

(2)       The following facilities or programs licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C:under Article 2 of Chapter 122C of the General Statutes:

a.         Chemical dependency units in psychiatric hospitals;

b.         Chemical dependency hospitals;

c.         Residential chemical dependency treatment facilities;

d.         Social setting detoxification facilities or programs;

e.         Medical detoxification facilities or programs; and

(3)       Duly licensed physicians and duly licensed psychologists and certified professionals working under the direct supervision of such physicians or psychologists in facilities described in (1) and (2) above and in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C.under Article 2 of Chapter 122C of the General Statutes. After January 1, 1995, "duly licensed psychologist"'Duly licensed psychologist' shall be defined as means licensed psychologists who hold permanent licensure and certification as health services provider psychologist issued by the North Carolina Psychology Board.

(4)       Duly licensed clinical social workers, duly certified substance abuse professionals, and licensed professional counselors working within the scope of practice in facilities described in subdivisions (1) and (2) of this subsection and in day/night programs or outpatient treatment facilities licensed under Article 2 of Chapter 122C of the General Statutes.

Provided, however, that nothing in this subsection shall prohibit any certificate or contract from requiring the most cost effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency.

(e)       Coverage for chemical dependency treatment as described in this section shall not be applicable to any group certificate holder or group subscriber contract holder who rejects the coverage in writing."

SECTION 5.  G.S. 58-65-90 reads as rewritten:

" 58-65-90.  No discrimination against the mentally ill and chemically dependent.dependent individuals.

(a)       Definitions. - As used in this section, the term:

(1)       'Mental illness' has the same meaning as defined in G.S. 122C-3(21); andG.S. 122C-3(21), with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-IV, or a subsequent edition published by the American Psychiatric Association, except those mental disorders coded in the DSM-IV or subsequent edition as substance-related disorders (291.0 through 292.9 and 303.0 through 305.9) and those coded as 'V' codes.

(2)       'Chemical dependency' has the same meaning as defined in G.S. 58-65-7558-65-75, with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-IV, or subsequent editions of this manual.

with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-3-R or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.

(b)       Coverage of Physical Illness. - No service 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 subscriber 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.

(b1)     Coverage of Mental Illness. - A subscriber contract that covers both physical illness or injury and mental illness may not impose a lesser lifetime or annual dollar limitation on the mental health benefits than on the physical illness or injury benefits, subject to the following:

(1)       A lifetime limit or annual limit may be made applicable to all benefits under the subscriber contract, without distinguishing the mental health benefits.

(2)       If the subscriber contract contains lifetime limits only on selected physical illness or injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the subscriber contract, the service corporation may impose a lifetime limit on the mental health benefits that is based on a weighted average of the respective lifetime limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(3)       If the subscriber contract contains annual limits only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the subscriber contract, the service corporation may impose an annual limit on the mental health benefits that is based on a weighted average of the respective annual limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(4)       Except as otherwise provided in this section, the subscriber contract may distinguish between mental illness benefits and physical injury or illness benefits with respect to other terms of the subscriber contract, including coinsurance, limits on provider visits or days of coverage, and requirements relating to medical necessity.

(5)       If the service corporation offers two or more benefit package options under a subscriber contract, each package must comply with this subsection.

(6)       This subsection does not apply to a subscriber contract if the service corporation can demonstrate to the Commissioner that compliance will increase the cost of the subscriber contract by one percent (1%) or more.

(7)       This subsection expires October 1, 2001, but the expiration does not affect services rendered before that date.

(c)       Mental Illness or Chemical Dependency Coverage Not Required. - Nothing in this section requires a service corporation to offer coverage for mental illness or chemical dependency, except as provided in G.S. 58-65-75.

(d)       Applicability. - Subsection (b1) of this section applies only to subscriber contracts, other than excepted benefits as defined in G.S. 58-68-25, covering more than 50 employees. The remainder of this section applies only to group contracts covering 20 or more employees."

SECTION 6.  G.S. 58-67-70 reads as rewritten:

" 58-67-70.  Coverage for chemical dependency treatment.

(a)       Definition. - As used in this section, the term 'chemical dependency' means the pathological use or abuse of alcohol or other drugs in a manner or to a degree that produces an impairment in personal, social or occupational functioning and which may, but need not, include a pattern of tolerance and withdrawal.

(b)       Chemical Dependency Requirement. - On and after January 1, 1985, everyEvery health maintenance organization that writes a health care plan on a group basis and that is subject to this Article shall offer provide benefits for the necessary care and treatment of chemical dependency that are not less favorable than benefits under the health care plan generally. Except as provided in subsection (c) of this section, benefits Benefits for chemical dependency shall be subject to the same durational limits, dollar limits, deductibles, and coinsurance factors limits as are benefits under the health care plan generally. For purposes of this subsection, 'limits' includes durational limits, deductibles, coinsurance factors, co-payments, maximum out-of-pocket limits, annual and lifetime dollar limits, and any other dollar limits or fees for covered services.

(b1)     Weighted Average. - If a group health plan contains annual limits, lifetime limits, co-payments, deductibles, or coinsurance only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the plan, then the health maintenance organization may impose limits on the chemical dependency treatment benefits based on a weighted average of the respective annual, lifetime, co-payment, deductible, or coinsurance limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(b2)     Case Management. - A health maintenance organization may use a case management program for chemical dependency treatment 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. These rules shall only ensure that case management programs are not designed to avoid the requirements of this section concerning parity between the benefits for chemical dependency treatment and those for physical illness generally.

(b3)     Medical Necessity. - Nothing in this section prohibits a health maintenance organization from managing the provision of benefits through common methods, including, but not limited to, preadmission screening, prior authorization of services, or other mechanisms designed to limit coverage to services for chemical dependency treatment only to those that are deemed medically necessary.

(c)       Every group health care plan that provides benefits for chemical dependency treatment and that provides total annual benefits for all illnesses in excess of eight thousand dollars ($8,000) is subject to the following conditions:

(1)       The plan shall provide, for each 12-month period, a minimum benefit of eight thousand dollars ($8,000) for the necessary care and treatment of chemical dependency.

(2)       The plan shall provide a lifetime minimum benefit of sixteen thousand dollars ($16,000) for the necessary care and treatment of chemical dependency for each enrollee.

(d)       Provisions for benefits for necessary care and treatment of chemical dependency in group health care plans shall provide for benefit payments for the following providers of necessary care and treatment of chemical dependency:

(1)       The following units of a general hospital licensed under Article 5 of General Statutes Chapter 131E:Chapter 131E of the General Statutes:

a.         Chemical dependency units in facilities licensed after October 1, 1984;licensed facilities;

b.         Medical units;

c.         Psychiatric units; and

(2)       The following facilities or programs licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C:under Article 2 of Chapter 122C of the General Statutes:

a.         Chemical dependency units in psychiatric hospitals;

b.         Chemical dependency hospitals;

c.         Residential chemical dependency treatment facilities;

d.         Social setting detoxification facilities or programs;

e.         Medical detoxification facilities or programs; and

(3)       Duly licensed physicians and duly licensed practicing psychologists and certified professionals working under the direct supervision of such physicians or psychologists in facilities described in (1) and (2) above and in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of General Statutes Chapter 122C.under Article 2 of Chapter 122C of the General Statutes.

(4)       Duly licensed clinical social workers, duly certified substance abuse professionals, and licensed professional counselors working within the scope of practice in facilities described in subdivisions (1) and (2) of this subsection and in day/night programs or outpatient treatment facilities licensed under Article 2 of Chapter 122C of the General Statutes.

Provided, however, that nothing in this subsection shall prohibit any plan from requiring the most cost effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency.

(e)       Coverage for chemical dependency treatment as described in this section shall not be applicable to any group that rejects the coverage in writing.

(f)        Notwithstanding any other provision of this section or Article, any health maintenance organization subject to this Article that becomes a qualified health maintenance organization under Title XIII of the United States Public Health Service Act shall provide the benefits required under that federal Act, which shall be deemed to constitute compliance with the provisions of this section; and any health maintenance organization may provide that the benefits provided under this section must be obtained through providers affiliated with the health maintenance organization."

SECTION 7.  G.S. 58-67-75 reads as rewritten:

" 58-67-75.  No discrimination against the mentally ill and chemically dependent.dependent individuals.

(a)       Definitions. - As used in this section, the term:

(1)       'Mental illness' has the same meaning as defined in G.S. 122C-3(21); andG.S. 122C-3(21), with a mental disorder defined in the Diagnostic and Statistical Manual of Mental Disorders, DSM-IV, or a subsequent edition published by the American Psychiatric Association, except those mental disorders coded in the DSM-IV or subsequent edition as substance-related disorders (291.0 through 292.9 and 303.0 through 305.9) and those coded as 'V' codes.

(2)       'Chemical dependency' has the same meaning as defined in G.S. 58-67-70G.S. 58-67-70, with a mental disorder defined in the Diagnostic and Statistical Manual of Disorders, DSM-IV, or subsequent editions of this manual.

with a diagnosis found in the Diagnostic and Statistical Manual of Mental Disorders DSM-3-R or the International Classification of Diseases ICD/9/CM, or a later edition of those manuals.

(b)       Coverage of Physical Illness. - 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.

(b1)     Coverage of Mental Illness. - A health care plan that covers both physical illness or injury and mental illness may not impose a lesser lifetime or annual dollar limitation on the mental health benefits than on the physical illness or injury benefits, subject to the following:

(1)       A lifetime limit or annual limit may be made applicable to all benefits under the plan, without distinguishing the mental health benefits.

(2)       If the plan contains lifetime limits only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the plan, the HMO may impose a lifetime limit on the mental health benefits that is based on a weighted average of the respective lifetime limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(3)       If the plan contains annual limits only on selected physical illness and injury benefits, and these benefits do not represent substantially all of the physical illness and injury benefits under the plan, the HMO may impose an annual limit on the mental health benefits that is based on a weighted average of the respective annual limits on the selected physical illness and injury benefits. The weighted average shall be calculated in accordance with rules adopted by the Commissioner.

(4)       Except as otherwise provided in this section, the plan may distinguish between mental illness benefits and physical injury or illness benefits with respect to other terms of the plan, including coinsurance, limits on provider visits or days of coverage, and requirements relating to medical necessity.

(5)       If the HMO offers two or more benefit package options under a plan, each package must comply with this subsection.

(6)       This subsection does not apply to a health benefit plan if the HMO can demonstrate to the Commissioner that compliance will increase the cost of the plan by one percent (1%) or more.

(7)       This subsection expires October 1, 2001, but the expiration does not affect services rendered before that date.

(c)       Mental Illness or Chemical Dependency Coverage Not Required. - Nothing in this section requires an HMO to offer coverage for mental illness or chemical dependency, except as provided in G.S. 58-67-70.

(d)       Applicability. - Subsection (b1) of this section applies only to group contracts, other than excepted benefits as defined in G.S. 58-68-25, covering more than 50 employees. The remainder of this section applies only to group contracts covering 20 or more employees."

SECTION 8.  G.S. 58-50-155 reads as rewritten:

" 58-50-155.  Standard and basic health care plan coverages.

(a)       Notwithstanding G.S. 58-50-125(c), the standard health plan developed and approved under G.S. 58-50-125 shall provide coverage for all of the following:

(1)       Mammograms and pap smears at least equal to the coverage required by G.S. 58-51-57.

(2)       Prostate-specific antigen (PSA) tests or equivalent tests for the presence of prostate cancer at least equal to the coverage required by G.S. 58-51-58.

(3)       Reconstructive breast surgery resulting from a mastectomy at least equal to the coverage required by G.S. 58-51-62.

(4)       For a qualified individual, scientifically proven bone mass measurement for the diagnosis and evaluation of osteoporosis or low bone mass at least equal to the coverage required by G.S. 58-3-174.

(5)       Prescribed contraceptive drugs or devices that prevent pregnancy and that are approved by the United States Food and Drug Administration for use as contraceptives, or outpatient contraceptive services at least equal to the coverage required by G.S. 58-3-178, if the plan covers prescription drugs or devices, or outpatient services, as applicable. The same exceptions and exclusions as are provided under G.S. 58-3-178 apply to standard plans developed and approved under G.S. 58-50-125.

(6)       Colorectal cancer examinations and laboratory tests at least equal to the coverage required by G.S. 58-3-179.

(7)       Treatment of chemical dependency and mental illness that is at least equal to the coverage required by G.S. 58-51-50 and G.S. 58-3-220, respectively. The Plan may use a case management program in accordance with G.S. 58-51-50 and G.S. 58-3-220, respectively.

(a1),    (a2) Repealed by Session Laws 1999-197, s. 2.

(b)       Notwithstanding G.S. 58-50-125(c), in developing and approving the plans under G.S. 58-50-125, the Committee and Commissioner shall give due consideration to cost-effective and life-saving health care services and to cost-effective health care providers."

SECTION 9.  This act becomes effective January 1, 2008, and applies to health benefit plans that are delivered, issued for delivery, or renewed on and after that date.  For purposes of this act, renewal of a health benefit policy, contract, or plan is presumed to occur on each anniversary of the date on which coverage was first effective on the person or persons covered by the health benefit plan.