Timothy's Law Impact on Employers

New York State’s “Timothy’s Law” imposes minimum benefits for inpatient and outpatient mental health care. For employers with 50 or more employees, the new law also adds coverage for biologically-based illnesses (such as, but not limited to, bipolar disorder, panic disorder, obsessive compulsive disorder, bulimia, and anorexia) and certain serious emotional disturbances in children under age 18 years.

Benefits for these illnesses are subject to the same benefit levels as medical and surgical care. Most self-insured plans are not required to add the provisions of Timothy’s Law, which took effect January 2007, but may choose to do so.

The federal Mental Health Parity Act of 1996, which provided limited parity between mental illness and medical/surgical coverage, originally contained a “sunset” provision of September 1, 2001. Every year, the sunset date is extended and is now set to expire at the end of 2008. Two new parity bills are currently in the U.S. Senate and House of Representatives. A compromise is expected on the provisions that will create a new parity law to expand health plan benefits for the mentally ill (for example, an enrollee’s co-pays and out-of-pocket costs for mental health treatment must be similar to those for medical/surgical care). It will apply to both fully insured and self-insured plans.