Legislative Update

U.S. federal agencies have been busy recently issuing final rules and notices for several employee benefits laws, and observers expect more legislation to come soon in the form of yet another extension of the COBRA subsidy.

In early February expect three federal agencies to release interim final regulations on the Mental Health Parity and Addiction Equity Act of 2008 which strengthens the Mental Health Parity Act of 1996. Also known as The Wellstone Act, it states that coverage of mental health disorders and substance use disorders must be consistent with coverage for other illnesses. The regulations aim to clarify the definition of “medical/surgical benefits” and “mental health benefits. The rules also add a definition for “substance use benefits,” according to the law firm Spencer Fane Britt & Browne LLP.

Employers with more than 50 employees, including those with self-insured plans, must comply with these new regulations, the law firm said. The regulations generally take effect for plan years beginning on or after July 1, 2010.

Experts say an extension of the federal COBRA premium subsidy is likely to occur, and legislators and the Obama administration already are working on the details. A draft jobs bill in the Senate would have added another three months onto the subsidy, allowing workers who are involuntarily terminated in March, April and May of 2010 to be eligible for the 65 percent subsidy. However, Senate Majority Leader Harry Reid (D-Nev.) struck that provision from the proposed bill. An aide to Reid has said that the COBRA subsidy extension would be handled in a separate bill.