New York State Passes Insurance Parity Law

New York State recently joined 34 other states in passing a mental health insurance parity law. The New York law requires insurance companies to provide 30 inpatient days of treatment and 20 outpatient days of treatment for all mental illnesses, including obsessive-compulsive disorder, bulimia nervosa, anorexia nervosa, and binge eating disorder.

The New York law, or “Timothy’s Law,” was named after Timothy O’Clair, a 12-year-old boy diagnosed with depression, attention deficit hyperactivity disorder and other illnesses who took his life in 2001. His parents believe that if their health insurance policy provided more adequate coverage for treatment relating to mental illnesses, their son would have obtained the help he needed and might still be alive today.

To address cost concerns raised by small businesses, Timothy’s Law directs the New York State Superintendent of Insurance to develop a method to hold businesses with 50 or fewer employees harmless from any increase in premiums from incorporating this measure. The State Insurance Department and the New York State Office of Mental Health are also required to conduct a two-year study to determine the effectiveness and impact of mental health parity legislation in New York and other states. The bill will take effect January 1, 2007, and will expire on December 31, 2009, in order to amend the law based on findings and recommendations of the two-year study.