Benefits Administration and Outsourcing Solutions|Health and Benefits
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The departments of Labor, Health and Human Services, and the Treasury have issued final regulations implementing the Mental Health Parity and Addiction Equity Act (MHPAEA). The MHPAEA aims to ensure that group health plans do not make it more difficult for participants and beneficiaries to access benefits for mental health (MH) conditions and substance use disorders (SUDs) than medical or surgical (M/S) treatments or procedures.
The final regulations amend certain provisions of the existing MHPAEA regulations and add new provisions on content requirements and time frames for responding to requests for nonquantitative treatment limitation (NQTL) comparative analyses added by the Consolidated Appropriations Act (CAA), 2021. Group health plans must analyze and document limits to MH/SUD benefits to ensure they are no more restrictive than those applied to M/S benefits.
Some changes in the final rules are significant and could create compliance challenges. The following are provisions relevant to employer-sponsored health plans.
Meaningful benefits requirement
The “meaningful benefits” requirement is intended to prohibit plans from providing fewer benefits for MH/SUD diagnoses than for M/S diagnoses. Plans that cover a MH condition or SUD must provide “meaningful benefits” in the same benefit classifications in which “meaningful” M/S benefits are provided.
Benefit classifications are in-network inpatient, out-of-network inpatient, in-network outpatient, out-of-network outpatient, emergency and prescription drug. The outpatient classifications may be sub-classified into office visits and “all other” visits. No other classifications or sub-classifications are allowed. Whether a benefit is delivered by telehealth or in person does not impact its classification.
For each classification in which the plan covers a core treatment for one or more M/S diagnoses, plans must also cover a core treatment for a covered MH condition/SUD. Plans should look to current evidence-based medical and clinical information to determine what is a core treatment for a particular condition or disorder.
The departments noted the following in the regulations’ preamble:
A plan only needs to provide benefits for a core treatment for a MH condition/SUD in a given classification if there is one; however, it must provide benefits for such condition or disorder in every classification in which M/S benefits are provided.
If a plan does not provide meaningful benefits for any M/S diagnoses in a particular classification, the plan is not required to provide meaningful benefits for any MH conditions/SUD in the classification.
The requirement to provide coverage of meaningful benefits for a MH condition or SUD is not a coverage mandate but rather another approach to ensuring parity between MH/SUD benefits and M/S benefits in a classification.
Definitions
The final regulations include several new definitions that group health plans and administrators should review and understand, including for M/S benefits; MH/SUD benefits; and terms for designing and applying NQTLs, such as processes, strategies, evidentiary standards and factors.
Requirements for NQTLs
Under MHPAEA, plans may not impose more restrictive NQTLs for MH/SUD benefits than the predominant NQTL that applies to substantially all M/S benefits in the same classification. For NQTLs, plans must meet the design and application requirements and the relevant data evaluation requirements. Otherwise, the plan may not impose an NQTL on MH/SUD requirements.
Design and application requirements. If the design or application of a particular NQTL discriminates against MH/SUD benefits, the plan must correct, cure or supplement the biased information, evidence, sources or standards used and outline those corrective steps in the plan’s comparative analysis. The following are considered to be nonbiased and objective: (1) generally recognized independent professional medical or clinical standards, and (2) carefully circumscribed measures reasonably and appropriately designed to detect or prevent and prove fraud and abuse that minimize the negative impact on access to appropriate MH/SUD benefits.
Data evaluation requirements. Plans must (1) collect and evaluate relevant data, which may vary based on facts and circumstances, but include data on network composition; (2) assess the data and determine whether the data suggest an NQTL contributes to material differences in relevant outcomes related to access to MH/SUD benefits compared with M/S benefits; and (3) if material differences in relevant outcomes related to access exist, take reasonable action to address the material differences to ensure operational compliance.
Network adequacy requirements. Plans must collect and evaluate data to assess the NQTLs' impact on relevant outcomes. This may entail reviewing in-network and out-of-network utilization rates, provider reimbursement rates, and the number of providers within a certain geography or providers accepting new patients. If the number of providers in the network is too low, reasonable steps should be taken to correct or expand the network.
NQTL comparative analysis content requirements
Since enactment of the CAA in 2021, plans covering both M/S benefits and MH/SUD benefits have been required to submit NQTL comparative analyses to federal agencies upon request. The final rules require the comparative analysis to:
Describe the NQTL, including identification of benefits subject to 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
Demonstrate comparability and stringency, as written
Demonstrate 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
Address findings and conclusions
Federal and state regulators are authorized to prohibit a plan from applying an NQTL if it is not shown to be in compliance in the comparative analysis.
Request and review of comparative analysis process
The departments provide significant detail on the request for comparative analyses and the review procedures:
Plans must submit a comparative analysis to the requesting department Secretary within 10 business days of receiving a request, unless specified otherwise.
The Secretary will specify what, if any, additional information the plan must provide within 10 business days or a time specified.
If the Secretary makes an initial determination of noncompliance, the plan has 45 calendar days to specify the actions it will take to comply and provide additional comparative analyses.
If the Secretary makes a final determination that the plan is not in compliance, the plan must notify all plan participants and beneficiaries within seven business days of the decision. The regulations provide the specific content for the notice; a copy of the notice must be provided to the Secretary and relevant service providers and fiduciaries.
Fiduciary certification
Under the final regulations, for plans subject to ERISA the comparative analysis must include a certification that at least one plan fiduciary has:
Engaged in a prudent process to select a qualified service provider(s) to perform and document a comparative analysis in connection with the imposition of any NQTLs applied to MH/SUD benefits under the plan, in accordance with MHPAEA
Satisfied the duty to monitor the service provider(s)
A plan is not required to certify that the NQTL comparative analysis complies with regulatory content requirements.
Notice requirements
Plans must provide a copy of the comparative analysis when requested by a state authority, a participant or beneficiary who has received an adverse benefit determination related to MH/SUD benefits, and participants and beneficiaries in ERISA plans at any time.
QTL provisions
For purposes of the substantially all/predominant tests applied to determine compliance of QTLs, any benefits with no financial requirement (or other QTL) (e.g., $0 copay or $0 coinsurance) are considered as no limitation, rather than a limitation. This could pose a challenge for plans complying with the Affordable Care Act requirement to provide certain preventive care with no cost sharing and those providing telehealth benefits with no cost sharing. These coverages could make it more difficult for plans to pass the “substantially all” portion of the test.
Potential challenges to the final regulations
It is likely that the new regulations will be subject to lawsuits claiming that the departments exceeded their regulatory authority because certain parts of the final regulations are not supported by underlying law (MHPAEA). Any challenge likely will play out under the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which overturned the long-standing Chevron doctrine of deferring to agencies’ reasonable interpretations of ambiguous laws. If any legal challenge is successful, the current MHPAEA rules would still remain in effect.
In addition to legal challenges, certain legislative and administrative actions could unwind the new regulations. A resolution of disapproval under the Congressional Review Act would allow Congress to nullify the regulations. If former President Trump wins the upcoming presidential election, the new administration could also take steps to unwind or limit the regulations.
Timing
For now, plans must continue to comply with existing requirements, including the CAA, 2021 amendments to MHPAEA regarding the comparative analysis requirement.
For plan years beginning on or after January 1, 2025 (e.g., January 1, 2025, for calendar-year plans), the final regulations are applicable for the requirements relating to the design and application of the NQTLs for MH/SUD being no more restrictive than M/S NQTLs, the effect of noncompliance, the disclosure requirements and the comparative analysis content requirements not related to outcomes data.
For plan years beginning on or after January 1, 2026 (e.g., January 1, 2026, for calendar-year plans), the final regulations are applicable for the requirements relating to compliance with the meaningful benefits standard, the prohibition on discriminatory factors and evidentiary standards, the required use of outcomes data and certain related comparative analyses requirements.
In addition, the final regulations implement the provision under the CAA, 2023 that sunsets the MHPAEA opt-out election for self-funded non-federal governmental plans (i.e., self-funded state and local governmental plans) under the Public Health Service Act.
Going forward
The current MHPAEA rules are still in effect. Plans should continue to perform and document NQTL comparative analyses, as required since the CAA, 2021 was enacted.
Plans should update existing NQTL comparative analyses documentation on or before the effective date.
Plans should begin or start to partner with their third-party administrators and benefit consulting firms to complete the NQTL comparative analysis.
Self-funded non-federal governmental plans must begin to comply with all MHPAEA provisions.
An ERISA plan fiduciary must certify that the fiduciary has engaged in a prudent process to select at least one qualified service provider to complete the plan’s comparative analysis and has satisfied the duty to monitor the service provider.
