Congress takes first step toward equal coverage of mental, physical disability coverage

June 26, 2025

A bill introduced in Congress this month would end the disparity in how long-term disability insurance carriers treat physical conditions and mental conditions or substance abuse disorders. 

Today, jobs with long-term disability benefits typically provide insurance coverage for physical ailments until retirement age. However, no matter how severe and persistent the mental illness is, how debilitating the PTSD, or how difficult the addiction recovery, virtually every U.S. insurer cuts the coverage after 24 months. 

The Workers' Disability Benefits Parity Act, introduced by U.S. Reps. Mark DeSaulnier, a California Democrat, and Bobby Scott, a Virginia Democrat, would end that practice, which is known in some company plans as a "mental/nervous limitation". The legislation comes a year-and-a-half after a landmark report from the advisory council on Employee Welfare and Pension Benefit Plans concluded that duration limits for mental health and substance use disorders are discriminatory. The council is known at the ERISA Council, named for the Employee Retirement Income Security Act, the federal tax and labor law that, 51 years ago, set standards for employee benefits plans.

Its 61-page report in December 2023 recommended the Department of Labor promote the elimination of the 24-month limitations. These limitations have devastated Wisconsin employees. 

A series of investigations by the Milwaukee Journal Sentinel found people who lost their jobs, houses, support systems and sense of hope and ambition due to losing coverage they thought was guaranteed. Many remained sick and in need of treatment as they attempted to fight legal battles with well-resourced insurance companies. 

Related: Physically disabled? No problem. Mentally disabled? Coverage is limited, harder to get. 

Related: Erick Vertein lost his home when an insurer declined his mental health leave request, for one reason 

While behavioral health disabilities make up just 7% to 8% of all disability claims, the Milwaukee Journal Sentinel found more than one-third of all disability lawsuits in Wisconsin challenged claims for mental health coverage that had been denied. In every case, the investigation found, the insurer's evidence of denial contradicted rigorous psychological evaluations and provider recommendations from the employee's health team. 

Often, insurance companies offered incentives to in-house or third-party medical reviewers to deny claims. The reviewers almost never had direct interaction with the Wisconsin residents for whom they denied care. Some were no longer actively practicing health care; some did not even specialize in the field they were reviewing. The investigation won second place in the 2024 Katherine Schneider Journalism Award for Excellence in Reporting on Disability administered by the National Center on Disability and Journalism. The reporting was made possible through a grant from the USC Annenberg Center for Health Journalism's 2024 National Fellowship Fund. Should the bill become law, the Workers' Disability Benefits Act would do the following:

• Amend the Employee Retirement Income Security Act(ERISA) to require private disability benefit plans comply with behavioral health parity.
• Establish behavioral health parity for disability insurance and for employee benefit plans sponsored by state and local governments.
• Require the Department of Labor to implement other recommendations of the ERISA Advisory Council.
• Authorize funding for the Department of Labor to implement these requirements. 

Workers needing more than 24 months are rare 

Jessa Victor, a shareholder at Hawks Quindel law firm in Madison who has litigated hundreds of disability cases, said the bill, if passed, "would be lifesaving." "That's not me being dramatic either, especially in this day and age where other public resources and support agencies are having funding cuts," Victor said. "A lot of people are coming to rely more and more on their long-term disability benefits." That especially extends to individuals who are also applying for Social Security and experiencing significantly longer wait times, Victor said. 

Under the Trump administration, the Social Security Administration announced it would be slashing 12% of its staff "to reduce the size of its bloated workforce and organizational structure," the agency said in a February blog post. Victor has seen what happens when benefits run out. She's had clients file for bankruptcy and some end up homeless because they can't go back to work. "At the same time, the insurance is acknowledging they're still totally disabled and completely unable to work, but because you hit 24 months, your benefits are done," she said. Most people who struggle with behavioral health conditions don't need the full 24 months of coverage, Victor emphasized, but it's a significant benefit for those who do. 

That was also one of the conclusions the ERISA advisory group argued in terms of cost concerns for insurance companies. 

Those who do need longer-term coverage represent a small percentage of claimants. 

Dr. Dan Fishbein, president of Sun Life U.S., released a press release June 5 congratulating DeSaulnier and Scott for introducing the bill, a move he called on Congress to do in 2023 following the ERISA advisory report. Sun Life U.S. is the only disability insurer so far to promote the legislation, citing a need for equitable treatment of behavioral health. Fishbein told the Journal Sentinel the cost of disability parity would be worthwhile for disability insurers, not just because only a small percentage of employees take more than 24 months for behavioral health treatment, but it ultimately makes for a healthier workforce.

 "Workers who cannot be successful at work because of a mental health diagnosis would get the time and support needed in order to get back to work and return as productive workers," Fishbein said. "Employers would get something significant in return for providing a somewhat enhanced disability benefits program." 

Most insurance carriers have robust programs to help people with physical disabilities get back to work, which sometimes looks like physical therapy, making sure they're getting the right medical care, and coordinating with the employer to help them return to work. There isn't anything like that for people with disabling behavioral health disorders. Often, as a person on disability for mental health-related issues approaches the 24- month benefit limit, their benefit gets recategorized as a physical diagnosis, said Fishbein. That person isn't directed to the right support networks, Fishbein said, because the benefit is just going to run out. "When I talk to our clinicians who work on these claims, they readily admit they don't focus on (clients with mental health conditions)," Fishbein said. "We would much rather our clinical programs be applied to help people recover and get back to work. … Right now, we're managing the benefit but we'd much rather help people manage the condition."