American Council of Life Insurers: Mandated Unlimited Mental Health Benefit Risks Access To, and Affordability Of, Disability Insurance

WASHINGTON, Dec. 12 -- The American Council of Life Insurers issued the following news release:

American Council of Life Insurers (ACLI) Executive Vice President & General Counsel Jillian Froment issued the following statement in response to a recommendation by the ERISA Advisory Council on Long Term Disability Insurance and Mental Health:

"The American Council of Life Insurers (ACLI) applauds the ERISA Advisory Council for its significant interest in mental health care benefit coverage issues. Our member companies are leaders in helping employers offer mental health assistance to employees. We are committed to working with the Council, the Department of Labor and other stakeholders on developing public policies that expand this voluntary employee benefit.

"Toward that end, we respectfully disagree with a Council recommendation that may initially seem appealing but ultimately would do more harm than good to workers who want and need mental health assistance - requiring employee-benefit plans to provide unlimited mental health benefits. Such a mandate could increase disability insurance premiums, resulting in the reduction or elimination of benefits. The impact would be particularly profound on low and middle-income workers, and in situations where disability benefits are offered on a cost-shared or employee-paid basis.

"Disability income insurers are especially attuned to the importance of mental health benefits. They also are keenly aware of the impact on all consumers, for all types of disabilities, when a mandated benefit is misapplied.

"For example, Vermont, the only state that enforces a mandatory mental health care benefit, has fewer insurers offering disability plans compared to other states. Meanwhile, Montana, a leader in mental health care benefits, chose to do away with its mandate due to its burden on employers and risk to insurers.

"Disability income insurers today are offering innovative mental health supportive services to their customers. Employers are voluntarily selecting insurers' options alongside disability income coverage.

"They are seeking even more ways to bring mental health care coverage to people who need it. But mandates on employers who are already voluntarily providing mental health care benefits through long term disability insurance would do much more harm than good.

"This merits further study, as one of the Council's recommendations notes. The ACLI agrees, and furthermore, it is imperative that the Labor Department work with the Bureau of Labor Statistics to ensure that accurate and holistic data is being captured today regarding long term disability coverage levels in America.

"Only then will the Council and the Labor Department be able to assess the true impact to all consumers of a mandated benefit provision within a voluntary product that will lead to price increases and tough decisions for employer."

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Original text here: https://www.acli.com/posting/nr23-088