City of Oak Creek

Common Council Report

Meeting Date: 

Item No.:        

Recommendation:  That the Common Council accept Resolution No. 10577-120605, to continue exemption from federal mental health parity requirements.

Background:  In 1996, the United States Government adopted the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), together with other legislation that will affect the City of Oak Creek’s group health plan.  Regulations issued by the U.S. Department of Health and Human Services (“HHS”), however, provide that non-federal governmental employers, like the City, do not need to comply with some of these changes.

Notwithstanding the HHS regulations, the group health plan of the City has included a number of the recent legislative changes to group health plan coverage.  For example, the City complies with a number of other state and federal changes, including provisions that will generally allow individuals to transfer into the Plan from another group plan and receive credit against any preexisting condition restrictions of the Plan, allowing individuals to enter the Plan if they previously declined coverage because they had other health insurance but have since lost that health insurance, prohibiting against discrimination against individual participants and beneficiaries based on health status, adopting standards relating to benefits for mothers and newborns and standards relating to breast reconstruction incident to a mastectomy.

The City has elected to continue to provide mental health benefits and hospital stay benefits on the same terms and conditions as reflected in the Plan prior to HIPAA.  Without making this election, the Plan would have been required to provide either: (1) the same annual and lifetime limitations on mental health benefits as are provided on other health benefits including the annual and lifetime limits; or (2) a total annual and lifetime limit that applies to all benefits.  Because the City has elected to continue to provide its current level of benefits, the City’s election will not affect your rights to receive mental or nervous disorder benefits under the Plan.  This election was first made for the plan year beginning January 1, 1998 and will continue to be made annually until such time as Council elects otherwise.

Fiscal Impact:  The City is required to prepare and distribute appropriate notices to health plan participants, employee representatives and the Center for Medicare and Medicaid Services.  No additional cost to the City is incurred in continuing this election.

Prepared by: Marie Pellett Personnel Specialist

Fiscal Review by: Beverly A. Buretta, CMC City Clerk