Following the announcement last month that the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury will put a hold on enforcing the 2024 final rule on the Mental Health Parity and Addiction Equity Act (MHPAEA), health plan sponsors may be confused about how to proceed with complying with the law.
We thought it would be helpful to speak with a couple of professionals who advise benefit plan clients on mental health parity compliance assessments to sort out how plan sponsors should respond.
Background
As covered in a recent Word on Benefits® blog post, the DOL, HHS and Treasury will not enforce the 2024 final rule, which added new rules implementing the nonquantitative treatment limitation (NQTL) comparative analyses requirements under MHPAEA, as amended by the Consolidated Appropriations Act, 2021 (CAA, 2021).
The departments announced the nonenforcement in May to meet a court deadline for responding to a legal challenge from the ERISA Industry Committee, which had filed a lawsuit alleging that the three agencies had overstepped their authority in issuing the rule.
Both parties agreed to pause the litigation. The DOL and other agencies will not “pursue enforcement actions, based on a failure to comply that occurs prior to a final decision in the litigation, plus an additional 18 months,” a statement from the three departments said.
According to an article in the January/February 2025 issue of Benefits Magazine, MHPAEA requires that financial- and treatment-related limitations imposed on mental health or substance use disorder (MH/SUD) benefits cannot be more restrictive than those applied to medical and surgical (M/S) benefits. CAA, 2021 required plans to test NQTLs and included enforcement measures for quantitative treatment limitation (QTL) testing to ensure that plans are not placing greater restrictions on MH/SUD benefits than those placed on M/S benefits.
We spoke with Marissa Rufo, who is a compliance advisor of regulatory affairs with MZQ Consulting in Pikesville, Maryland, and Aruna Vohra, a senior consultant with Horizon Actuarial Services in Miami, Florida, about steps that plan sponsors should take following the nonenforcement announcement.
Audits Are Continuing
The DOL and the Centers for Medicare and Medicaid (CMS) continue to conduct mental health parity audits, and plans should continue to conduct NQTL testing, Rufo said. That’s because all existing laws, particularly the amendments to MHPAEA and those enacted as part of CAA, 2021, remain in effect.
Vohra said her clients had been doing comparative analyses based on the MHPAEA self-compliance tool, which came out in 2020 and reflects 2013 regulations guidance, and those assessments should continue. “Our sense is that those reports should still be done because the CAA has not changed the requirements,” she said.
“Our take on this is you don’t ignore the assessment. You do it to the best of your ability, and you do it based on the old guidance, which is the self-compliance tool,” Vohra added. The firm also suggests that plans perform the NQTL and the QTL comparative analyses.
The main impact of the nonenforcement action is on portions of the 2024 final rule that went into effect in 2025 and were scheduled to take effect in 2026. These were not specified in CAA, 2021 but were interpretations of how to implement the law.
Those include the following.
Fiduciary Certification Process
Beginning in 2025, the 2024 final rule required plan fiduciaries to certify that they engaged in a prudent process for selecting the vendor to conduct the NQTL analysis and document that they monitored the vendor.
Many vendors have already built this certification process into their reports this year, so there’s no harm for plans to continue doing it, Rufo said. And it’s good practice to complete these activities, she added.
“It’s just extra documentation that plan sponsors would then have to show that they went through this exercise,” she said. “If it’s offered to you at no great cost, there’s no harm, no foul of getting that as part of your package.”
Definitions for Mental Health and Substance Use Disorder Diagnosis and Treatment
Under the 2024 final rule, plans were required to use the current versions of the Diagnostic and Statistical Manual (DSM) and the International Classification of Diseases (ICD) medical compendia as the preferred definitions for MH/SUD diagnoses. Before the 2024 final rule, plans could use state guidelines in addition to those resources.
One of the potential benefits of this requirement was that it standardized the definition of benefits, Rufo explained. However, most plan sponsors rely on their insurance carriers or pharmacy benefit managers (PBMs) for these definitions, and it’s likely they were already using the DSM and ICD as sources, she said.
Meaningful Benefit Standard
This standard was set to take effect in 2026. The 2024 final rule stated that if a plan provides any benefits for an MH/SUD condition, it must provide “meaningful benefits” for that disorder or condition in every classification in which meaningful M/S benefits are provided.
But regulators had not defined the term meaningful benefits, Rufo said. “We did not have a definition or a list or directory of what were considered meaningful benefits for each type of diagnosis or disorder,” she said. “That was going to need a lot of follow-up, and the industry was expecting more guidance to be issued.”
Prohibition on Discriminatory Factors
The 2024 final rule prohibits plans from using “discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to MH/SUD benefits as compared to medical/surgical benefits when designing NQTLs.”
What constituted discriminatory factors was another item that needed additional guidance, Rufo said.
Struggling With Data
Vohra said one of the main difficulties plans have had in trying to comply with the NQTL testing requirement is the amount of data needed. Vendors would provide information about how they recruited mental health providers and the extent of network access for mental health providers, but the rules required plans to provide additional in-depth information about outcomes.
“We had a hard time getting the data in the beginning, and then the vendors got more used to it and started to provide better data but, nevertheless, there’s a lot of data,” she noted.
Rufo agreed that data access has been a struggle. Some plan vendors claim that the data is proprietary information, but CAA, 2021 said that plans are entitled to their own data.
Compliance Issues
The DOL’s reports to Congress have shown that plans have struggled to comply with the NQTL comparative analyses requirement, but Rufo said that, in most cases, the DOL will tell plans what changes they need to make rather than pursuing penalties.
“They are not expecting you to pass with flying colors, and you most certainly are better off having a C-plus report on hand when they ask you for it than to have nothing at all,” she said.
The International Foundation will continue tracking updates on mental health parity regulations and breaking down what plan sponsors need to know.
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