(A)

1. (1) In the case of health insurance coverage offered in connection with a group health plan that provides both medical and surgical benefits and mental health benefits:

   1. (a) if the coverage does not include an aggregate lifetime limit on substantially all medical and surgical benefits, the coverage may not impose any aggregate lifetime limit on mental health benefits;

   2. (b) if the coverage includes an aggregate lifetime limit, also referred to in this item as the "applicable lifetime limit", on substantially all medical and surgical benefits, the coverage shall either:

      1. (i) apply the applicable lifetime limit both to the medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of the limit between the medical and surgical benefits and mental health benefits; or
      2. (ii) not include any aggregate lifetime limit on mental health benefits that is less than the applicable lifetime limit.
   3. (c) In the case of coverage that is not described in subitem (a) or (b) and that includes no or different aggregate lifetime limits on different categories of medical and surgical benefits, the Director of Insurance shall promulgate regulations under which subitem (b) is applied to the coverage with respect to mental health benefits by substituting for the applicable lifetime limit an average aggregate limit that is computed taking into account the weighted average of the aggregate lifetime limits applicable to the categories.

2. (2) In the case of health insurance coverage offered in connection with a group health plan that provides both medical and surgical benefits and mental health benefits:

   1. (a) if the coverage does not include an annual limit on substantially all medical and surgical benefits, the coverage may not impose any annual limit on mental health benefits;

   2. (b) if the coverage includes an annual limit on substantially all medical and surgical benefits, referred to as the "applicable annual limit", the coverage shall either:

      1. (i) apply the applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health benefits; or
      2. (ii) not include any annual limit on mental health benefits that is less than the applicable annual limit.
   3. (c) In the case of coverage that is not described in subitem (a) or (b) and that includes no or different annual limits on different categories of medical and surgical benefits, the Director of Insurance shall promulgate regulations under which subitem (b) is applied to the coverage with respect to mental health benefits by substituting for the applicable annual limit an average annual limit that is computed taking into account the weighted average of the annual limits applicable to the categories.

(B) To the extent consistent with Section 38-71-737 and any other applicable state law, nothing in this section shall be construed:

1. (1) as requiring health insurance coverage offered in connection with a group health plan to provide any mental health benefits; or
2. (2) in the case of such coverage that provides such mental health benefits, as affecting the terms and conditions, including cost sharing, limits on number of visits or days of coverage, and requirements relating to medical necessity, relating to the amount, duration, or scope of mental health benefits under the coverage, except as specifically provided in subsection (A) in regard to parity in the imposition of aggregate lifetime limits and annual limits for mental health benefits.

(C)

1. (1)

   1. (a) This section shall not apply to any group health insurance coverage offered in connection with a group health plan for any plan year of a small employer.
   2. (b) For purposes of subitem (a), "small employer" means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least two but not more than fifty employees on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year.

   3. (c) For purposes of this item:

      1. (i) All persons treated as a single employer under subsection (b), (c), (m), or (o) of Section 414 of the Internal Revenue Code of 1986 shall be treated as one employer.
      2. (ii) In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.
      3. (iii) Any reference in this item to an employer shall include a reference to any predecessor of the employer.
2. (2) This section shall not apply with respect to health insurance coverage offered in connection with a group health plan if the application of this section to such coverage results in an increase in the cost for such coverage of at least one percent.

(E) For purposes of this section:

1. (1) "Aggregate lifetime limit" means, with respect to benefits under health insurance coverage, a dollar limitation on the total amount that may be paid with respect to the benefits under the health insurance coverage with respect to an individual or other coverage unit.
2. (2) "Annual limit" means, with respect to benefits under health insurance coverage, a dollar limitation on the total amount of benefits that may be paid with respect to the benefits in a twelve-month period under the health insurance coverage with respect to an individual or other coverage unit.
3. (3) "Medical or surgical benefits" means benefits with respect to medical or surgical services, as defined under the terms of the plan, but does not include mental health benefits.
4. (4) "Mental health benefits" means benefits with respect to mental health services, as defined under the terms of the plan, but does not include benefits with respect to treatment of substance abuse or chemical dependency.