Forging their own path, some employers are providing mental health parity in their employee benefits plans without it being required by law, while legislators in Congress and statehouses continue to debate mental health parity bills. What's more, companies are finding that parity improves productivity and retention.

Anadarko Petroleum Corp., a Houston-based oil exploration and production company, has provided mental health parity for years - meaning that the mental health coverage is equivalent to the medical coverage when it comes to visit limits, deductibles, copayments, lifetime benefit limits and annual benefit limits.

"I am convinced that it more than pays for the small incremental cost via productivity improvements. There is about a 1.5% increase in medical costs, based on the three companies where I have worked with these benefits," Anadarko's CEO, Jim Hackett, comments. "There is actually a net savings in my mind, as opposed to a net cost, due to productivity improvements. Science makes it clear that illnesses of the brain respond to medication and treatment like other physical illnesses. If they are not treated, they may get worse."

He adds, "I also believe [mental health parity] has significant retentive aspects for those who value an employer that is able to help employees who have personal medical challenges."

But for Hackett, it's more about being fair to employees than about the bottom line. "It's a matter of fairness," he says. "We offer physical health benefits that should be matched by the same mental health benefits. Both are physiological issues, both require medical treatment and both can experience significant improvement when placed in the hands of medical experts.

Further, Hackett observes, "Most CEOs don't even know that their benefit plans treat mental illnesses less preferentially. If parity does not exist, make it happen. You won't be sorry."

Some sports executives would agree. In 2002, the Houston Texans became the first National Football League franchise to establish mental health parity for its employees. This year, the Texans won a national award from the American Psychological Association partly because of the insurance parity for the players, who undergo intense physical and mental trials on the football field.

Legislative progress

Meanwhile, national and state legislators are paying close attention to this issue this year. Nationally, one mental health parity bill (S558) was approved by the Senate on Sept. 18 and was referred to the House. Another parity bill (HR1424) has passed several committees in the House. At presstime, Congress has not passed a bill that reconciles the two.

Russ Newman, executive director for professional practice at the American Psychological Association, sounds optimistic, saying the passage in the Senate "brings us a step closer to equal treatment for millions of Americans with mental health and substance use disorders. It has taken many years, considerable work between the mental health advocacy community and employers to finally be confident that genuine parity will soon be in place."

In a press release, health insurer Aetna notes that the Senate legislation "will promote equitable care for mental health illnesses, which is an essential component of improving the quality of overall health care. [It also will] create a national solution to inconsistent behavioral health care regulation, which is now regulated on a state-by-state basis."

Mary Fox, head of Aetna's product group, says, "This legislation will benefit our members because it makes mental health treatment accessible and affordable."

The National Retail Federation also supports the Senate bill. Neil Trautwein, NRF vice president and employee benefits policy counsel, says, "The sponsors of this measure have ended 10 years of gridlock and brought together a previously hostile group of consumers, providers, hospitals, employers and health insurers into a broad coalition."

Meanwhile, many states go well beyond federal law by establishing parity for certain definitions of mental illness. New York and Ohio, for example, passed full parity laws in 2006, according to the National Conference of State Legislatures.

But even in states with strong mandates, self-insured employer-sponsored plans are exempt under the federal Employee Retirement Income Security Act. Additionally, many state parity laws include exemptions for small firms, according to a study published in the journal Health Affairs.

Some firms may be concerned that mental health parity would cause a painful spike in benefit costs. However, the Health Affairs study suggests that parity increases premiums by less than 1%.

Roughly 73% of employers provide mental health coverage for their workers, while 95% provide prescription drug coverage, and 87% offer a PPO health plan, according to the Society for Human Resource Management.