RD17 - Coverage for Biologically Based Mental Illnesses


Executive Summary:
Senate Bill 430 was passed by the 1999 General Assembly. It was effective on January 1, 2000. The law requires insurers proposing to issue group accident and sickness insurance policies providing hospital, medical and surgical or major medical coverage on an expense-incurred basis; corporations providing group subscription contracts; and health maintenance organization (HMO’s) providing health care plans to provide coverage for biologically based mental illnesses.

A “biologically based mental illnesses” is defined as “any mental or nervous condition caused by a biological disorder of the brain that results in a clinically significant syndrome that substantially limits the person’s functioning.” Specifically, the following diagnoses are defined as biologically based mental illnesses, as they apply to adults and children: schizophrenia, schizoaffective disorder, bipolar disorder, major depressive disorder, panic disorder, obsessive compulsive disorder, attention deficit hyperactivity disorder, autism, and drug and alcohol addiction.

Subsection F provides that the law does not apply to (i) short-term travel, accident only, limited or specified disease policies, or (ii) short-term nonrenewable policies of not more than six month’s duration, or (iii) policies, contracts, or plans in the individual market or small group markets to employers with 25 or fewer employees, or (iv) policies or contracts designed for persons eligible for Medicare or other similar coverage under state or federal plans. The law also amends § 38.2-3412.1 to provide that § 38.2-3412.1 does not apply to “biologically based mental illnesses” as defined in § 38.2-3412.1:01 unless coverage for mental illness is not otherwise available pursuant to § 38.2-3412.1:01.

The law has a “sunset provision under which it will expire on July 2, 2004. Prior to that date, the Advisory Commission is to conduct a study to determine the effects, if any, of the coverage required under § 38.2-3412.1:01 on claims experience for and costs of policies, contracts, or plans. The Advisory Commission is required to submit its written report no later than December 2001, 2002 and 2003.

A public hearing was held on September 15, 2003. Staff presented preliminary data from reports submitted by insurers and HMO’s. A representative of Virginians for Mental Health Equity Spoke in favor of the legislation. No one spoke in opposition to the mandate.

The Advisory Commission voted unanimously (9 to 0) on November 17, 2003 to recommend that the coverage required by Senate Bill 430 (1999) continue to be mandated for inclusion in group policies. The Advisory Commission believes that the claim and cost data on the impact of the legislation in the past three years indicate an acceptable additional cost.