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the rates, terms, and conditions of such coverage must not exceed those of physical health treatment. 152
California’s Mental Health Parity Law as a Case Study
California’s mental health parity law153 mandated parity for all plans “issued, amended, or renewed on or after July 1, 2001.”154 The
similarities between California’s explained earlier in this Note.155 employer groups in California
parity law and Timothy’s Law are A 2002 case study of two large showed differing financial results,
possibly caused by different types of health care plans.156 workforce, all under a single managed care health plan,
Employer A’s had relatively
high costs and parity showed Employer B’s different levels
high service use, and comparing costs before and after a 1.9 percent post-parity decline in total spending. workforce was covered by a variety of plans with of service coverage, and their total health care spending 157
an increase of less than one percent.158 This study is further that the fears of Timothy’s law unduly burdening employers 159
are groundless, increases.
The Employment Retirement Income Security Act
The Employment Retirement Income Security Act was enacted in 1974 by Congress as a basis for federally supervising employee benefit plans, and was justified by the need for protection of interstate
See § 44-793(1)(a)(i).
CAL. INS. CODE § 10144.5(a) (West 2005 & West Supp. 2008).
Infra Part V. Supra Part IV.
Robert B. Branstrom & Roland Sturm, Economic Ground Rounds: An Early Case Study of
the Effects of California’s Mental Health Parity Legislation, 53:10 PSYCHIATRIC SERVS. 1215, 1215-16 (2002).
Id. at 1216.
See generally Group Warns Cost of ‘Timothy’s Law’ Unknown as Bill Passes Assembly,
BUS. REVIEW (Albany), Dec. 14, 2006, available at 2006 WLNR 21578222 (proclaiming that because lawmakers are unable to give an exact forecast of the financial implications of Timothy’s Law, not only will Timothy’s Law cost employers (as opposed to produce savings), but these costs may be too much for employers to bear).