One key limitation of the Act is that it applies only to health plans and insurers that cover mental disorders in the first place. It does not mandate coverage for mental disorders where none is provided. Another limitation is that the law does not cover businesses with 50 or fewer employees.

An additional limitation is that the Act covers only mental illness; it does not cover treatment for substance abuse or chemical dependency. Because the law is about parity, and not about mandating coverage for mental illness, the law does not define mental illness. Rather, the law applies to "mental health services" as the term is used by the individual health plans. Whatever mental health services the plan covers, it must cover at the same level as physical health services.

Critics of the Mental Health Parity Act have argued that it has too many loopholes and too many exclusions to truly end the practice of providing less coverage for mental health than for physical health. Fortunately, many states have passed their own parity laws, many of which provide broader protection. To learn whether your state has a more comprehensive law, visit insure.com at www.insure.com/health/mentalstate.html.

The Act took effect in January of 1998, and was originally set to expire in September 2001. Congress has extended it four times, and the current extension runs through December 31, 2005.

The Health Insurance Portability and Accountability Act

The Health Insurance Portability and Accountability Act (HIPAA) provides a range of protection to millions of working Americans who have some sort of health-related condition or characteristic that makes them vulnerable to exclusions, limitations, and discrimination in group healthcare coverage. HIPAA applies mainly to employer-based health coverage. Therefore, if you get your health insurance through your employer, and if you have what is called a "pre-existing condition" (see below) or some other health-related characteristic that makes you "undesirable" in the eyes of an insurance company, you should get to know HIPAA so that you can use it to protect yourself and your family.

A pre-existing condition is a condition for which you received medical advice, diagnosis, care, or treatment in the six months prior to enrolling in your current health plan. Cancer and high blood pressure are common pre-existing conditions. For example, you may have received treatment for breast cancer in June, and enrolled in a new group health plan in July. Prior to this Act, you faced the possibility that your new health plan would not cover your breast cancer treatment for several years -- or at all -- simply because you received treatment for it previously.

The intent of HIPAA is to turn the tables on health plans and insurance companies by limiting the ways in which they can exclude coverage of such conditions:

• Pregnancy is no longer considered a pre-existing condition. Therefore, if you are pregnant and want to switch group health plans, you can do so without risking a break in your coverage. But be careful: There are some large loopholes in this protection. HIPAA applies only to women who switch from one group health plan to another. Therefore, if you had no coverage and then obtained group coverage through a new job after you got pregnant, your pregnancy may not be covered or you may have to wait for a period of time before it gets covered. (Ironically, this waiting period may last longer than your pregnancy.) Similarly, if you had individual coverage and then switched to either group coverage or to another individual plan after you got pregnant, your pregnancy may not be covered at all or for a specified period of time.
• Health plans and insurers cannot apply the pre-existing condition exclusion to newborns or to children younger than 18 who are adopted or who are put up for adoption so long as the newborn or the child entered the health plan within 30 days of birth, adoption or placement for adoption.

• Genetic information may not be treated as a preexisting condition in the absence of a diagnosis. If your coverage is through an insurance company or offered through a health maintenance organization, state law may provide additional protections.
• The Act places a six-month "look back" limit on identifying pre-existing conditions. This means that if you have a condition for which you received medical advice, diagnosis, care, or treatment longer than six months prior to enrolling in your new plan, that condition is not pre-existing and cannot be excluded from coverage on that basis.
• If you do have a pre-existing condition and you have group health insurance, you face shorter pre-existing condition exclusion periods than you would have faced prior to HIPAA. In other words, you can get covered for your condition faster than before. The maximum exclusion period is generally 12 months from the date on which you enrolled in the plan.
• If you switch from one group health plan to another as the result of a job change, you will not face new pre-existing condition exclusions so long as there is no more than a 63-day break in your health coverage. This enables you to switch jobs despite your health status without fear that you will lose coverage for certain conditions.