(a) The Legislature finds the following:

(1) Mental illness affects many citizens of this state each year, resulting in anguish, grief, desperation, fear, isolation, and a sense of hopelessness of significant levels among victims and families.

(2) Consequences of mental illness include the significant expenditures of public operating funds for treatment and losses of millions of dollars by businesses in the state in accidents, absenteeism, nonproductivity, and turnover. Excessive stress and anxiety and other forms of mental illness clearly contribute to general health problems and costs.

(3) Typical health coverage in this state by some insurers provides individuals and affected families of mental illness with nonexistent or limited benefits compared to provisions for other illnesses.

(4) Experience in this state and several other states demonstrates that the risk of mental illness can be insured at reasonable additional cost, provided strict controls on quality and utilization of treatment are applied.

(b) The Legislature declares that the following is the policy of this state:

(1) To promote equitable and nondiscriminatory health coverage benefits for all forms of illness including mental and emotional disorders that are of significant consequence to the health of people of the state and that can be treated in a cost-effective manner.

(2) To ensure that victims of mental and other illnesses have access to and choice of appropriate treatment at the earliest point of illness in the least restrictive settings.

(3) To ensure that costs of treatment of mental illness are supported through an equitable combination of public and private responsibilities.

For purposes of this chapter, the following terms have the following meanings:

(1) DAY TREATMENT SERVICES. Includes, but is not limited to: Physiological, psychological, and psychosocial concepts, techniques, and processes necessary to maintain or develop functional skills of clients, provided to individuals and groups for periods of more than two hours but less than 24 hours a day.

(2) HEALTH BENEFIT PLAN. A health care service plan governed by the provisions of Article 6, Chapter 4, Title 10, and a group health insurance policy, including an employee welfare health benefit plan, that covers hospital, medical, or surgical expenses, issued by insurers, health maintenance organizations, preferred provider organizations, medical service organizations, physician-hospital organizations, or any other person, firm, corporation, joint venture, or other similar business entity that pays for, purchases, or furnishes health care services to patients, insureds, or beneficiaries in this state. For the purposes of this chapter, a group health benefit plan located or domiciled outside of the State of Alabama is deemed to be subject to the provisions of this chapter if it receives, processes, adjudicates, pays, or denies claims for health care services submitted by or on behalf of patients, insureds, or beneficiaries who reside in the State of Alabama or who receive health care services in the State of Alabama.

(3) INPATIENT SERVICES. Includes, but is not limited to: A range of physiological, psychological, and other intervention concepts, techniques, and processes used in a community mental health psychiatric inpatient unit, general hospital psychiatric unit or psychiatric hospital licensed by the Department of Health, or in an accredited public hospital to restore psychosocial functioning sufficient to allow maintenance and support of the client in a less restrictive setting.

(4) OUTPATIENT SERVICES. Includes, but is not limited to: Screening, evaluation, consultations, diagnosis, and treatment involving use of physiological, psychological and psychosocial evaluative and interventive concepts, techniques, and processes provided to individuals and groups.

(5) PROVIDER. An appropriately licensed mental health professional, an accredited public hospital or psychiatric hospital, or a community agency certified as a community mental health center by the Department of Mental Health and Mental Retardation. All agency or institutional providers named in this subdivision shall ensure that services are supervised by an appropriately licensed mental health professional.

In the case of service benefit plans which provide coverage for mental illness services through a limited network of selected mental health providers, the term 'provider' means a person or entity who is duly selected and participating via contract or other arrangement with the insurer or other issuer of benefit coverage under selection criteria, including the designation of types of providers for which coverage is provided as well as credentialing used in the selection of providers, solely determined by such issuer.

Each group health benefit plan shall offer to provide, at a minimum, the following additional benefits for a person suffering from a mental or nervous condition:

(1) Inpatient services.

(2) Day treatment services.

(3) Outpatient services.

(a) All group health benefit plans shall offer to provide, at a minimum, additional benefits according to this chapter for a person receiving medical treatment for any of the following mental illnesses diagnosed by an appropriately licensed provider.

(1) Schizophrenia, schizophrenia form disorder, schizo affective disorder.

(2) Bipolar disorder.

(3) Panic disorder.

(4) Obsessive-compulsive disorder.

(5) Major depressive disorder.

(6) Anxiety disorders.

(7) Mood disorders.

(8) Any condition or disorder involving mental illness, excluding alcohol and substance abuse, that falls under any of the diagnostic categories listed in the mental disorders section of the International Classification of Disease, as periodically revised.

(b) All group health benefit plans, policies, contracts, and certificates executed, delivered, issued for delivery, continue, or renewed in this state on or after January 1, 2001, shall offer, at the time of proposal, sale, or renewal of a policy subject to this chapter, to provide additional mental health benefits which meet the requirements of this chapter. For purposes of this subsection, all contracts are deemed renewed no later than the next yearly anniversary of the contract date.

(1) The group health benefit plan shall offer to provide benefits for the treatment and diagnosis of mental illnesses under terms and conditions that are no less extensive than the benefits provided for medical treatment for physical illnesses.

(2) At the request of a reimbursing group health benefit plan, a provider of medical treatment for mental illness shall furnish data substantiating that initial or continued treatment is medically necessary and appropriate. When making the determination of whether treatment is medically necessary and appropriate, the insurer or other issuer of the group health benefit plan shall use the same criteria for medical treatment for mental illness as for medical treatment for physical illness under the contract.

(3) This chapter does not apply to group health benefit plans covering employers with 50 or fewer employees, whether the group policy is issued to the employer, to an association, to a multiple-employer trust, or to another entity.

(4) This chapter does not require and shall not be construed to require coverage and benefits for the treatment of alcoholism and other drug dependencies through the diagnosis of a mental illness listed in subsection (a).

(5) This chapter does not require and shall not be construed to require the coverage of services of providers who are not designated as covered providers, or who are not selected as a participating provider, by a group health benefit plan or issuer having a participating network of service providers. Provided, however, reasonable effort shall be made to include a sufficient number of qualified providers to insure reasonable access to services.

(6) Insurers and other issuers of limited or restricted mental health provider networks shall continue to be able to establish and apply selection criteria and utilization protocols for mental health providers including the designation of types of providers for which coverage is provided as well as credentialing criteria used in the selection of providers.

(7) Provided further, employer sponsors of group health benefit plans are not required to purchase additional coverage for mental health services that are offered pursuant to this chapter.

(a) A group health benefit plan, policy, or contract that provides coverage for the services to be offered pursuant to this chapter may contain provisions for maximum benefits and coinsurance and limitations, deductibles, exclusions, and utilization review protocols to the extent that these provisions are not inconsistent with the requirements of this chapter.

(b) The issuer of a group health benefit plan, policy, or contract may either disclose the additional premium for such additional mental health benefits to the prospective contract holder and allow the contract holder to elect such additional benefits on an optional basis; or conform its policies, contracts or certificates issued on and after January 1, 2001, and adjust its premium costs to reflect the additional benefit costs.

Every issuer of a group health benefit plan subject to this chapter shall provide a cost report for each calendar year to the Commissioner of Insurance no later than April 30th of the following year. The report shall be in a form prescribed by the commissioner and shall include certification of parity in mental health benefits and total annual costs of mental health services relative to total health costs. The commissioner shall compile this data for all health benefit plans in an annual report solely for the purpose of demonstrating the health cost impact of the requirements of this chapter.

This chapter shall supersede subsection (c), Section 27-1-18, and any other conflicting laws to the extent there is a conflict with this chapter.