The authority of state insurance regulators emerged as a key issue, here, earlier this week during a hearing on the major mental health parity bills.

“In moving forward toward equity in coverage for mental health services, it is important to maintain the recognition that state policymakers may determine it necessary to have a stronger set of standards to ensure the protection of patients in state-regulated health insurance policies,” Sean Dilweg, Wisconsin insurance commissioner, testified during the hearing, which was organized by a House Education and Labor Committee subcommittee hearing.

Wisconsin, for example, wants to maintain the right to require employers to provide mental health benefits, even if federal law simply continues to regulate the nature of any mental health benefits that are offered, Dilweg said, according to a written version of his remarks.

Jon Breyfogle, a Washington lawyer who testified at the hearing on behalf of the American Benefits Council, Washington, criticized the idea of letting states set their own mental health benefits standards.

That flexibility would violate Employee Retirement Income Security Act provisions that preempt state efforts to regulate benefit plans at employers with more than 50 employees, Breyfogle said.

Changing the ERISA preemption rules would be a major step, and it “should not be an adjunct to a bill whose purpose is to address mental health parity, Breyfogle testified.

Both the Senate mental health parity bill, S. 558, and the House version, H.R. 1424, would require group health plans that offer any mental health benefits to apply the same terms to mental health benefits that they apply to other types of care.

S. 558, introduced by Sen. Ted Kennedy, D-Mass., and Sen. Pete Domenici, R-N.M., would explicitly protect the authority of employers and insurers to manage use of mental health care, and it would restrict states’ ability to pass new mental health benefits laws.

The Senate Health, Education, Labor and Pensions Committee approved S. 558 earlier this year.

H.R. 1424, introduced by Reps. Patrick Kennedy, D-R.I., and James Ramstad, R-Minn., would permit states to impose new mental health benefits laws.

H.R. 1424 is still in committee.

The American Benefits Council, and many other insurance, employer and health groups, including America’s Health Insurance Plans, Washington, and the American Medical Association, Chicago, have endorsed S. 558.

“We hope this good faith effort sends an important message that employers will support legislation where their priority concerns are addressed in a thoughtful manner and with careful attention to details,” Breyfogle said.

H.R. 1424 “does not address the issues of key concern to employers in the same balanced fashion as the Senate bill,” Breyfogle said.

Dilweg told lawmakers that the National Association of Insurance Commissioners, Kansas City, Mo., has written to members of Congress to say that the Senate bill, as now written, could completely pre-empt state efforts to regulate matters such as coverage limits and co-payments.

“Short of litigation in federal court, it is unclear who decides if the state law differs from the federal law and what a state’s options are if the state disagrees with that decision,” Dilweg said.

Today, 46 states require some level of mental health coverage and 27 require states to provide the same level of coverage for mental health care as they provide for medical and surgical care, Dilweg said.