House passes controversial mental health pay parity bill that imposes new insurer fines

The House passed legislation that imposes new fines on insurers that don’t follow federal mental health pay parity requirements, despite opposition from some in the insurance industry. 

Lawmakers voted 220 to 205 on Thursday to pass the Mental Health Matters Act, which also seeks to bolster youth mental health needs. The bill now heads to the Senate to an uncertain fate amid stiff Republican opposition. Rep. Mark DeSaulnier, D-California, the legislation’s lead sponsor, said the legislation is needed to get plans in line and meet the requirements of the Affordable Care Act.

“These plans are failing to maintain parity between behavioral health and physical health benefits as required by statute,” he said on the House floor Thursday.

An analysis from the nonpartisan scorekeeper Congressional Budget Office estimated that a small number of insurers would get fined, estimating only collecting $29 million over the next decade in the new penalties. However, the legislation earned major pushback from the ERISA Industry Committee, which represents large employer plan sponsors. 

The group charged that the bill would “weaponize” the Department of Labor (DOL) thanks to new measures to sue employers instead of working together on compliance. 

Several House Republicans echoed those issues in remarks on the House floor. 

“Employers who offer mental health benefits under [ERISA] do so voluntarily,” said Rep. Virginia Foxx, R-North Carolina. “They should not be penalized for violating standards that are unclear and vague.”

She said that plans have been clamoring for years for the DOL to release new guidance on how to comply with parity requirements, but the agency has failed to do so. Other Republicans slammed the legislation’s removal of arbitration clauses, which could lead to more litigation. 

“This bill will only benefit trial lawyers and will lead to a reduction in mental health benefits as employer swill have to divert money to pay attorneys’ fees,” said Rep. Rick Allen, R-Georgia.

DeSaulnier’s office has said that the legislation doesn’t fundamentally alter the civil enforcement framework in the ERISA law.

The strong Republican opposition to the legislation could imperil its chances in the Senate, which is working on its own legislation to address pay parity. The Senate Finance Committee has pledged to include parity as part of a larger mental health package but so far, no text has been released. Committee Chairman Ron Wyden, D-Oregon, recently told Fierce Healthcare he is still working with senators on the issue and hopes to get something done before the end of the year.