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BUSCHING-KAPOCHUNAS FINAL

2/4/2009 1:59:19 AM

606

HOFSTRA LABOR & EMPLOYMENT LAW JOURNAL

[Vol. 25:601

Fiscal Impact of Implementing Timothy’s Law

that

When Timothy’s Law was originally proposed, not only was the legislation good for public

proponents argued policy, because it

provided

relief

to

individuals

in

situations

similar

to

that

of

Timothy

O’Clair and his family, but that it was fiscally sound as well.29

Actuarial

analyses demonstrate indeed affordable. 30

that In

insurance May of

coverage for mental illnesses is 2002, PriceWaterhouseCoopers

conducted

an

actuarial

analysis

to

assess

the

costs

of

providing

mental

health

parity.31

The

study

determined

that

the

net

composite

market

impact for employer plan healthcare costs would rise about 0.8 percent, or a meager $1.26 per member per month.32 In addition to including conservative assumptions that tended to overstate the expected costs of implementing a mental parity plan, the actuarial analysis did not assume any medical offset, disability savings, productivity savings, or any

savings from public sector mental health programs, which would further diminished the actual costs per member per month. implementation of similar mental health parity laws in other states, 33

have After those

states

had

negligible

changes

in

plan

costs:

there

was

a

less

than

one

percent increase in Rhode Island, no 0.2 percent decrease in Maryland. 34

increase

in

New

Hampshire,

and

a

In contrast to the small costs of providing mental health parity, the costs from lost productivity and increased absenteeism, not including unemployment compensation or welfare, was estimated at more than $44

billion

per

year.35

Costs

were

also

incurred

as

a

result

of

untreated

Companies Ordered to Tell Customers About ‘Timothy’s Law’, BUS. REV. (Albany), Feb. 5, 2007, available at 2007 WLNR 2206162 (summarizing an emergency directive ordered by Eric Dinallo, Acting Superintendent of the New York Insurance Department, requiring insurers to alert their customers of the enactment of Timothy’s Law and the changes it makes on their insurance agreements); State Orders Publicity for “Timothy's Law”, BUS. FIRST (Buffalo), Feb. 5, 2007, available at 2007 WLNR 2206672 (same).

  • 29.

    See Timothy’s Law, supra note 1.

  • 30.

    Id. (citing RONALD E. BACHMAN, AN ACTUARIAL ANALYSIS OF COMPREHENSIVE

MENTAL HEALTH AND SUBSTANCE ABUSE BENEFITS FOR THE STATE OF NEW YORK 5 (2002)

[hereinafter AN ACTUARIAL http://www.timothyslaw.org/actuarialsumm.pdf).

ANALYSIS],

available

at

  • 31.

    AN ACTUARIAL ANALYSIS, supra note 30, at 5.

  • 32.

    Id. at 5.

  • 33.

    Id. at 4.

  • 34.

    Press Release, Nat’l Alliance on Mental Illness of N.Y. City Metro, Inc., Equal Mental

Health Benefits – Good for Families AND Good for Business (May 13, 2003), [hereinafter Equal Mental Health Benefits] available at www.naminycmetro.org/equalbenefits_factsheets.html.htm (emphasis added).

35. Timothy’s Law, supra note 1; Equal Mental Health Benefits, supra note 34.

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