The U.S. Department of Labor (DOL), the U.S. Department of Health and Human Services (HHS), and the Department of Treasury recently issued final rules under the Mental Health Parity and Addiction Equity Act (MHPAEA). The final rules focus on nonquantitative treatment limitations (NQTLs), and the comparative analysis requirement established in the CAA, 2021. These rules provide new definitions, revise existing definitions of key terms, and outline the steps for compliance with the MHPAEA, among other provisions.
Definitions
The final rules amend key definitions, removing references to state guidelines for the terms "medical/surgical benefits," "mental health benefits," and "substance use disorder benefits." The rules also specify that when determining whether conditions or disorders are mental health (MH) conditions or substance use disorders (SUDs), plans must refer to the most current version of the International Classification of Diseases (ICD) or the Diagnostic and Statistical Manual of Mental Disorders ("DSM").
New definitions in the final rules include the following:
- Evidentiary Standards – Any evidence, sources, or standards that a plan or issuer considered or relied upon in designing or applying a factor concerning an NQTL;
- Factors – All information, including processes and strategies (but not evidentiary standards), that a plan or issuer considered or relied upon to design an NQTL or determine whether or how it applies to plan benefits or coverage;
- Processes – Actions, steps, or procedures that a plan or issuer uses to apply an NQTL; and
- Strategies – Practices, methods, or internal metrics that a plan or issuer considers, reviews, or uses to design an NQTL.
Meaningful Benefit Requirement
The final rules state that plans providing any benefits for an MH condition or SUD must provide "meaningful benefits" for that condition or disorder in all benefit classifications in which it provides medical/surgical (M/S) benefits. Benefits are "meaningful" if they require coverage of a core treatment for the condition or disorder in each classification in which they require coverage for one or more medical conditions or surgical procedures.
NQTL Requirements
Under the MHPAEA, plans may not impose any NQTL concerning MH/SUD benefits in any classification more restrictive than the predominant NQTL that applies to substantially all the medical/surgical benefits in the same classification. As a result, the plan or issue must meet two sets of requirements, as follows:
- Design and Application Requirements – The plan must consider the processes, strategies, evidentiary standards, and other factors used to design the NQTL to be imposed on the MH/SUD benefits to ensure that they are comparable to and no more stringent than those imposed on M/S benefits in the same classification. Plans may not use discriminatory factors or evidentiary standards to design an NQTL or those that are based on biased or not objective information, evidence, sources, or standards.
- Relevant Data Application Requirements – The plan must collect and evaluate relevant data in a way that is reasonably designed to examine the impact of the NQTL on relevant outcomes concerning access to MH/SUD and medical/surgical benefits. Relevant data for an NQTL may vary based on the facts and circumstances, which offers flexibility for plans and issuers to determine the appropriate data to collect.
Comparative Analysis Requirement
Plans and issuers that impose NQTLs on MH/SUD benefits must perform and document a comparative analysis of the design and application of each NQTL containing the following six elements:
- A description of the NQTL, including identification of benefits subject to the NQTL;
- Identification and definition of the factors and evidentiary standards used to design or apply the NQTL;
- A description of how factors are used in the design or application of the NQTL;
- A demonstration of comparability and stringency, as written;
- A demonstration of comparability and stringency in operation, including the required data, evaluation of that data, explanation of any material differences in access, and description of reasonable actions taken to address such differences; and
- Findings and conclusions.
Federal agencies may request and review a comparative analysis of an NQTL from a plan or issuer. The plan or issue must forward the analysis to the Secretary of the requesting agency within ten business days. The Secretary may determine that the analysis is insufficient and ask for additional information within ten business days. The Secretary also may determine that the analysis is initially compliant and give the plan forty-five calendar days to produce a corrective action plan. If the Secretary issues a final determination of noncompliance, the plan or issuer must notify all participants, beneficiaries, and enrollees in the plan no more than seven business days after the determination.
Fiduciary Certification
Plans subject to ERISA must designate one or more fiduciaries to review any NQTL comparative analysis. Those plans must certify that the fiduciary prudently chose qualified service providers to perform and document the analysis. They also must certify that the fiduciary satisfied their duty to properly monitor those service providers.
Effective Date
These final rules apply to group health plans for plan years that start on or after January 1, 2025. However, certain provisions, including the meaningful benefits standard, the prohibition on discrimination, the outcomes data use requirement, and certain parts of the comparative analysis requirement, will only become effective for plan years that start on or after January 1, 2026.
Opposition to the rules by a Congressional committee has occurred already. Litigation over the validity of the rules is likely, although the federal agencies issuing the final rules have grounded them in statutory authority, likely to avoid legal challenges under the U.S. Supreme Court's decision in Loper Bright.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
