Mental Health Parity Act to Take Effect at Midnight

Posted on December 31, 1997

Arlington, VA - As Americans ring in the New Year tonight, they will usher in a new era of health coverage for those suffering from severe mental illnesses. The Mental Health Parity Act of 1996 will take effect at the stroke of midnight, allowing millions of Americans to break free from decades of unfair discrimination. The law, which requires annual and lifetime benefits for mental illnesses to be equal to that offered for other physical disorders, will allow employers to be exempted if their costs rise more than one percent as a result of complying with the law.

"The days of being cast as second-class citizens from a health care system historically indifferent to their needs are over," said NAMI Executive Director Laurie Flynn. "American families in communities large and small who are coping with the devastating effects of severe mental illnesses can breathe a little easier knowing their loved ones are covered by insurance. This modest anti-discrimination law eliminates the double standard held against millions suffering from brain disorders and gives them renewed hope for reestablishing full and productive lives."

Despite pressure from select special interests to weaken the law, companies have been quick to embrace the new mental illness parity requirement. Researchers at the Rand Corporation and the University of California at Los Angeles found that mental health benefits would not add significantly to insurers' costs, concluding that parity will increase expenses by only $1 per employee each year. Additionally, a survey conducted for NAMI by William M. Mercer, Inc., indicated little resistance by employers to comply with the new law, with 85 percent of businesses familiar with the law either in compliance or planning to make changes to comply with the law by the end of 1998.

With more than 168,000 members, NAMI is the nation's leading grassroots organization solely dedicated to improving the lives of persons with severe mental illnesses, including schizophrenia, bipolar disorder (manic-depressive illness), major depression, obsessive-compulsive disorder and anxiety disorders. NAMI has more than 1,140 state and local affiliates in all 50 states, the District of Columbia, Puerto Rico, and Columbia.