The ratified bailout bill for the U.S. financial system also included the Mental Health Parity Act. Here’s what you need to know.

Under the terms of the law, your company health plan is required to apply the same benefits (and limits) for mental health therapy and related treatments that it does for medical and surgical benefits.

Specifically, the law applies equal treatment to employees’ share of deductibles, copays, out-of-pocket expenses, monthly premiums, hospitalization benefits and covered out-patient visits. Companies with less than 50 employees are exempt.

You still have discretion regarding the extent and scope of the mental health benefits you offer to employees and their families. This includes sharing the cost of premiums, limits on numbers of visits or days of coverage, and requirements related to proving medical necessity.

By extension, the law also raises the bar for employers in terms of handling mental health-related disability accommodations. Handling such requests are tricky — and filled with legal pitfalls.

As employees have become more aware that mental health issues like depression and anxiety are considered medical conditions, accommodation requests have shot up dramatically. How far does your organization need to go to honor such requests?

Same burden of proof

As long as the employee’s anxiety can be documented medically and unless honoring the request would create extreme economic hardship for your organization, you must honor the request. It’s also crucial to look at the employee’s job description. The key issue to look at is whether the employee can still perform essential job functions.

Also, the employee may not need a permanent accommodation. Example: He or she has started taking a new type of anti-anxiety medication.

Courts have ruled that ADA permits employers to obtain enough information from employees’ mental health provider (psychiatrist, psychologist, licenced clinical social worker, etc.) to determine whether an accommodation is needed and, if so, for how long.

Keep in mind: The purpose of ADA is to provide equal – not preferential – treatment to employees with physical or mental disabilities.

Reasonable vs. unreasonable requests

Legally speaking, mental health conditions are protected under the Americans with Disabilities Act (ADA). That means your organization must honor any reasonable accommodation request tied to a mental health issue. But what’s considered reasonable and unreasonable?

A reasonable request would be something like, “I have an anxiety disorder and my therapist says that I need to limit my work travel.”

An unreasonable accommodation request: “My therapist says my boss is the cause of my depression. I need a new supervisor.”

Even if the accommodation request is unreasonable, you may still have additional legal obligations. In the example above, you may have a discrimination – rather than accommodation – case on your hands.

Key question to answer: Did the supervisor single the employee out for abuse or ridicule due to his or her mental-health condition?

Supervisor training is crucial

In many cases, supervisors’ level of education and training in handling the challenges of mental health issues is your best defense – or biggest risk – in avoiding lawsuits. Experts recommend making it a top priority to train supervisors to follow three basic rules:

1. Refer employees to the EAP program. Don’t play amateur psychologist if you suspect an employee has a problem.
2. Direct employees’ accommodation requests and benefits-related problems (e.g., scheduled therapist appointments clash with work schedule) to HR/Benefits, and
3. Avoid making – and don’t tolerate – inappropriate jokes or comments at the affected employee’s expense.

The last issue may be a sore spot with supervisors. But it’s critical. Employers have lost or been forced to settle multi-million dollar mental health discrimination lawsuits because of someone’s “innocent joke.”