Legislation would boost penalties for insurers that skimp on mental health treatment benefits

A bill approved Monday by the Legislature would increase penalties for health insurance companies that provide substandard benefits for mental health care.

SB1046 advanced to the governor's desk on a 70-0 vote in the Assembly. It aims to strengthen long-standing rules designed to increase patient access to psychiatric treatment by preventing insurers from skimping on benefits.

Under state and federal laws, insurers must cover treatments for serious mental illness similar to how they would cover other injuries and diseases. That means plans cannot include separate limits on mental health benefits or include higher co-pays and out-of-pocket costs for counseling and medication.

The rules govern treatments for such issues as schizophrenia, eating disorders, major depressive conditions and emotional conditions in children such as autism.

State Sen. Jim Beall, D-San Jose, said his bill would give the two state agencies that regulate health insurance the same power to enforce the law.

The Department of Managed Health Care, which oversees major group health plans covering most people with health insurance, already can levy per-day, per-patient fines against insurers for violations. SB1046 extends the same powers to the Department of Insurance, which regulates the smaller self-employer and individual insurance plan markets.

"It puts health insurers on the alert that they must live up to the law or face fines," Beall said in a statement.

A health insurance trade group was neutral on the bill after raising concerns about when insurers would be considered in violation of the rules.