The government recently issued final rules on the Mental Health Parity and Addiction Equity Act (MHPAEA). The rules implement requirements for plans to conduct a comparative analysis of their nonquantitative treatment limitations (NQTLs). These comparative analyses must assess disparities in coverage between the plan's mental health and substance use disorder (MH/SUD) benefits and medical/surgical (Med/Surg) benefits. The new rules establish content requirements and time frames associated with the NQTL comparative analysis. Portions of the rules take effect for plan years beginning on or after January 1, 2025. The remainder of the rules are effective January 1, 2026. This client alert discusses important aspects of the final rules.
Applicability
- MHPAEA applies only to plans that offer Med/Surg benefits and are not "excepted benefit" plans. In general terms, this means MHPAEA applies to major medical plans, not to stand-alone vision or dental plans, and not to account-based plans like health flexible spending accounts.
- If an employer's major medical plan is fully insured: The insurance company is responsible for preparing an NQTL comparative analysis. We believe that an employer will be able to rely on that analysis and will not have to prepare its own. However, because employers are required to monitor their service providers, employers should inquire as to the status of the analysis and should request a copy.
- If an employer's major medical plan is self-funded: The employer is responsible for the NQTL comparative analysis. Few if any employers are able to conduct the analysis—the employer will need to engage a service provider and will also need the cooperation of their third-party administrator. Employers who have not yet obtained the required analysis (or have not engaged a service provider to prepare the analysis) should contact benefits counsel as soon as possible.
Fiduciary Certification
Under the final rules, at least one plan fiduciary must certify that the fiduciary has engaged in a prudent process to select a qualified service provider to prepare the NQTL comparative analysis. The fiduciary must also certify that the fiduciary has engaged in a process to monitor the service provider's performance. The process for the fiduciary should include, at a minimum, asking questions about the analysis and discussing it with the service provider to understand the findings and conclusions. The fiduciary should ensure that the service provider provides assurance that the analysis complies with MHPAEA. The fiduciary certification requirement is effective for plan years beginning on or after January 1, 2025.
Time Frames
The final rules establish new—and very short—time frames for plans to respond to the government's request for an NQTL comparative analysis. A plan must provide the analysis to the government within 10 business days after such a request. If the government deems the analysis to be insufficient, the government will request additional information, which the plan must provide within 10 business days. If the government concludes that the plan has failed to comply with the NQTL comparative analysis requirements, then within 45 calendar days, the plan must provide the government with a corrective action plan and an additional comparative analysis. If the government finally determines that the plan is not in compliance, then within 7 business days, the plan must notify all plan participants and beneficiaries of the government's determination. These time frames are effective for plan years beginning on or after January 1, 2025.
Definitions
The final rules amend the definitions of the terms "medical/surgical benefits," "mental health benefits," and "substance use disorder benefits" by removing a reference to state guidelines. A plan's definition of whether a condition or disorder is MH/SUD must follow the most current version of the International Classification of Diseases or the Diagnostic and Statistical Manual of Mental Disorders. These definitions are effective for plan years beginning on or after January 1, 2025.
Rules with a Delayed Effective Date
- The final rules contain certain requirements that take effect for plan years beginning on or after January 1, 2026:
- Meaningful Benefit Requirement – A plan that offers MH/SUD benefits in any classification must provide meaningful MH/SUD benefits in every classification in which Med/Surg benefits are provided.
- Design and Application Requirement – The plan may not use discriminatory factors or evidentiary standards to design an NQTL.
- Data Evaluation Requirement – The plan must collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTLs. For example, the plan could collect the number of claims in which pre-authorization was denied within a classification, and then evaluate the denial rate for MH/SUD benefits compared with the denial rate for Med/Surg benefits.
Key Takeaways
- Employers with fully insured plans should contact the insurance company to request a copy of the NQTL comparative analysis.
- Employers with self-funded major medical plans who have not yet conducted or arranged for an NQTL comparative analysis should contact their benefits counsel as soon as possible.
- Employers who have already obtained an NQTL comparative
analysis should:
- Contact the service provider who performed the analysis to discuss whether it satisfies the requirements under the final rules.
- Review the analysis and engage in a discussion with the service provider to understand the findings and conclusions.
- Ensure that at least one plan fiduciary certifies in writing that the fiduciary engaged in a prudent process to select the service provider and has monitored the service provider's performance.
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.
