A long-awaited Mental Health Parity and Addiction Equity Act (MHPAEA) Final Rule was issued on September 9, 2024. The Final Rule addresses the mandate set forth in the Consolidated Appropriations Act (2021) that requires group health plans’ and health insurance issuers’ compliance with “non-quantitative treatment limits” (NQTLs). The mandate also requires that the names of non-compliant plans and issuers be published in a report to Congress (see the most recent report here). The Final Rule will continue to pose significant compliance challenges for plans/issuers with new requirements related to the documentation and justification of NQTLs.
As compared to the 2023 proposed rules that we summarized in our Update here, the Final Rule appears to impose somewhat less burdensome requirements on employer-sponsored plans. However, the MHPAEA and the Final Rule requirements will continue to pose significant compliance challenges for plans/issuers related to the documentation and justification of NQTLs. Visit this DOL/MHPA webpage for links to tools and resources, including a DOL Fact Sheet and News Release.
Here are some highlights relevant to employer-sponsored plans:
Mental Health Parity Required. MHPAEA requires parity between a group health plan’s medical/surgical (M/S) benefits and mental health/substance use disorder (MH/SUD) benefits. MHPAEA’s parity requirements apply to financial requirements (such as deductibles, copayments and coinsurance), quantitative treatment limitations or QTLs (such as day or visit limits), and non-quantitative treatment limits or NQTLs which generally limit the scope or duration of benefits (such as prior authorization requirements, step therapy requirements and standards for provider admission to participate in a network).
NQTL Requirements. Plans may not impose NQTLs with respect to MH/SUD benefits in any classification that are more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all M/S benefits in the same classification. The rule did not finalize a proposed mathematical test for defining “substantially all” and “predominant," which means plans can use common medical management techniques rather than applying a mathematical test to NQTLs which are inherently nonquantifiable. In implementing an NQTL, the rule requires that a plan satisfy two sets of requirements. First, the plan must examine the processes, strategies, evidentiary standards, and other factors used in designing and applying an NQTL to MH/SUD benefits in the classification to ensure they are comparable to, and applied no more stringently than, those used in designing and applying the limitation with respect to M/S benefits in the same classification. Second, plans must collect and evaluate relevant data (which may vary based on the facts and circumstances) in a manner reasonably designed to assess and consider the impact of the NQTL on relevant outcomes related to access to MH/SUD benefits and M/S benefits.
Comparative Analysis Requirement. Plans/issuers must conduct a “comparative analysis” of the NQTLs used for M/S benefits compared to MH/SUD benefits. These analyses must contain a detailed, written and reasoned explanation of the specific plan terms and practices at issue and include the basis for the plan’s/issuer’s conclusion that the NQTLs comply with MHPAEA. Plans must perform and document NQTL comparative analyses and submit them to a requesting agency within ten business days of the request. The analysis must:
Describe the NQTL;
Identify and define the factors and evidentiary standards used to design or apply the NQTL;
Describe how factors are used in the design or application of the NQTL;
Evaluate whether processes, strategies, evidentiary standards, or other factors are comparable to, and applied no more stringently than, those with respect to M/S benefits, as written and as applied; and
Address findings and conclusions regarding comparability and relative stringency. Plans must also prepare and make available to the agencies, upon request, a written list of all NQTLs imposed under the plan that limits the scope or duration of treatment.
Meaningful Benefit Requirement. Plans that provide any benefits for a MH/SUD condition must provide “meaningful benefits” for that condition or disorder in every benefit classification in which meaningful M/S benefits are provided. Meaningful benefits require coverage of a core treatment for the condition or disorder in each classification in which the plan covers a core treatment for one or more medical conditions or surgical procedures.
Fiduciary Certification. In most cases, issuers and third-party administrators will prepare the comparative analyses for employer-sponsored health plans. Comparative analyses for plans subject to ERISA must also include a certification that one or more named fiduciaries have engaged in a prudent process to select qualified service providers to perform and document the analysis and that the fiduciaries have satisfied their duty to monitor those service providers. This requirement conforms with the typical ERISA fiduciary standard for selecting plan vendors/service providers. This certification requirement will likely push fiduciaries to put more pressure on TPAs to respond to requests/testing methodology of any outside NQTL service provider performing the comparative analyses. The final rules do not require a proposed requirement that would have required the fiduciary to certify that the comparative analysis actually complies with regulatory content requirements.
Applicability Date. In terms of the implementation timeframe, most of the Final Rule is effective for plan years beginning on January 1, 2025, while other parts, such as the new meaningful benefits standard, the prohibition on discriminatory factors, and the data evaluation requirements have a delayed effective date of the first plan year beginning on or after January 1, 2026.
What's Next
It is anticipated that the Final Rule will strengthen MHPAEA’s requirements and provide guidance to health plans/issuers on how to comply with the law’s requirements. It is also anticipated that the Rule will result in changes in network composition and medical management techniques related to MH/SUD care, more robust MH/SUD provider networks, and fewer and less restrictive prior authorization requirements for MH/SUD care. The agencies indicate more guidance is coming. For example, they intend to provide examples of NQTLs in a future update to the MHPAEA Self-Compliance Tool (see 2020 version here). They also intend to provide additional information on the data plans/issuers should collect and evaluate. In the meantime, opposition and legal challenges to the Rule seem likely.
Conner Strong & Buckelew will continue to work with our clients to analyze and understand the complex requirements of the MHPAEA, and we can refer our clients to qualified service providers to perform and document the NQTL comparative analysis for a self-insured sponsor. We will provide alerts and updates as new information becomes available. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.
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