On September 9, 2024, the U.S. Departments of Health and Human Services (HHS), Labor (DOL), and the Treasury released new final rules implementing the Mental Health Parity and Addiction Equity Act (MHPAEA). The final rules set forth content requirements and timeframes for responding to requests for nonquantitative treatment limitation (NQTL) comparative analyses required under MHPAEA, as amended by the Consolidated Appropriations Act, 2021 (CAA). The rule adds protections for plan participants and beneficiaries against more restrictive NQTLs for mental health and substance use disorder (MH/SUD) benefits as compared to medical or surgical (M/S) benefits. NQTLs are defined as requirements that limit the scope or duration of benefits, such as prior authorization requirements, step therapy and standards for provider admission to participate in a network. 

Note for public employer health plans at the state and local levels: The new final rules eliminate state and local government health plans’ ability to opt out of compliance with MHPAEA.

The final rules are lengthy and complex. This blog provides a brief overview and highlights three things that plan sponsors need to know about working with service providers on final rule compliance: 1) fiduciary certification of the comparative analysis for Employee Retirement Income Security Act (ERISA) plans, 2) third-party administrator (TPA) cooperation and 3) vendor contract provisions.

No exhaustive list of NQTLs. The final rule doesn’t provide an exhaustive list of NQTLs, as requested by commenters, because NQTLs will change over time. DOL may consider issuing separate guidance to add more examples of NQTLs if needed. Plans and insurance companies “are best positioned to initially identify NQTLs, including any NQTLs that plans and issuers newly implement as their plan or coverage designs evolve over time. . . . Any exhaustive list of NQTLs published by the Departments would likely lag behind those actually utilized by plans and issuers due to this information gap, along with the wide variability in NQTLs that exist now and could exist in the future,” the preamble in the final rules states.

NQTL scope. MHPAEA does not limit the scope of NQTLs that plans may impose on MH/SUD benefits. However, for any NQTLs applicable to MH/SUD benefits, a plan must comply with MHPAEA regulations, which require plans to provide meaningful benefits for that condition or disorder in every classification in which meaningful M/S benefits are provided.

Meaningful benefits. Whether the benefits provided are meaningful is determined in comparison to the benefits provided for M/S conditions in the same classification. Meaningful benefits “require coverage of a core treatment for that condition or disorder in each classification in which the plan or coverage provides benefits for a core treatment for one or more medical conditions,” according to the fact sheet.

Plans must satisfy two sets of requirements under the final rules.

1. Design and application requirements: Plans 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 are applied no more stringently than, those used in designing and applying the limitation with respect to M/S benefits in the same classification. The final rules prohibit plans from using biased or nonobjective information and sources that might negatively impact access to MH/SUD care when designing and applying an NQTL.
   
2. Relevant data evaluation requirements: Plans must ensure, in operation, that an NQTL applicable to MH/SUD benefits in a classification is no more restrictive than the predominant NQTL applied to substantially all M/S benefits in the same classification. To do so, plans must collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTL on relevant outcomes related to access to MH/SUD benefits and M/S benefits. Then, they must carefully consider the impact. For NQTLs related to network composition standards, a plan or issuer must collect and evaluate relevant data in a manner reasonably designed to assess the NQTLs’ aggregate impact on relevant outcomes related to access to MH/SUD benefits and M/S benefits. Plans must make changes if the data shows they are providing insufficient access.

Comparative analysis of each NQTL. Plans must perform and document a comparative analysis of the design and application of each NQTL. The final rules require the comparative analysis to contain six content elements:

1. A description of the NQTL, including identification of benefits subject to the NQTL
2. Identification and definition of the factors and evidentiary standards used to design or apply the NQTL
3. A description of how factors are used in the design or application of the NQTL
4. A demonstration of comparability and stringency, as written
5. 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
6. Findings and conclusions.

The following are three things plan sponsors need to know about working with service providers on NQTL comparative analysis compliance.

1. Fiduciary certification

Comparative analyses for plans subject to ERISA are required to include a certification specifying that one or more named fiduciaries engaged in a prudent process to select and monitor their service providers.

Instead of requiring named fiduciaries to state whether they found the comparative analysis to be in compliance with the content requirements (as proposed), the final rules require certification confirming the fiduciary’s engagement in a prudent process to select one or more qualified service providers to perform and document a comparative analysis in connection with the imposition of any NQTLs that apply to MH/SUD benefits under the plan in accordance with MHPAEA and its implementing regulations, as well as satisfaction of the duty to monitor those service providers. For this purpose, DOL expects that a plan fiduciary making such a certification will, at a minimum:

• Review the comparative analysis prepared by or on behalf of the plan
• Ask questions about the analysis and discuss it with service providers, as necessary, to understand the findings and conclusions documented in the analysis
• Ensure that a service provider responsible (in whole or in part) for performing and documenting a comparative analysis assures that, to the best of its ability, the NQTL and associated comparative analysis comply with the regulations.

2. TPAs provide necessary information

The final rules recognize that plans are the entities required by MHPAEA to perform and document comparative analyses while TPAs and other service providers that administer the plan provide the necessary information. “There is no exception to the requirement when necessary information cannot be obtained from another entity, plans and issuers must work with their TPAs and service providers to obtain the information they need for their comparative analyses,” the final rule says. “Any ERISA-governed group health plans that contract with service providers refusing or otherwise failing to provide the requisite information should notify DOL.”

3. Best practice contract provisions

The final rule doesn’t require that plan sponsors include MHPAEA compliance provisions in their contracts with TPAs, as requested by commenters, because that would go beyond the scope of this rulemaking. However, contracting provisions similar to HIPAA “business associate agreements” are a best practice that could be helpful to many plans in complying with their obligations to perform and document comparative analyses of NQTLs.

Applicable date. The final rules generally apply to group health plans and group health insurance coverage on the first day of the first plan year beginning on or after January 1, 2025. However, the meaningful benefits standard, the prohibition on discriminatory factors and evidentiary standards, the relevant data evaluation requirements, and the related requirements in the provisions for comparative analyses apply on the first day of the first plan year beginning on or after January 1, 2026.

Compliance with final NQTL standards. DOL enforcement reports in recent years remind us that plans should already have NQTL comparative analyses in place so that they can meet the deadline of ten business days to respond should DOL request a comparative analysis. Plans and service providers should begin reviewing their comparative analyses to check for required content elements and determine what updates are needed to comply with the NQTL design, application and relevant data evaluation standards.

DOL plans to provide further guidance and compliance assistance materials in the coming months.

Watch for more guidance. The final rule doesn’t provide a list of all relevant outcomes data required to be collected and evaluated by plans, as requested by commenters; however, DOL intends to issue in future guidance on the following:

• Outcomes data including the type, form and manner of collection and evaluation for the data required
• Lists of examples of data that are relevant across the majority of NQTLs
• Lists of examples of data that are relevant for NQTLs related to network composition
• An updated MHPAEA self-compliance tool with a robust framework and roadmap for plans to determine which data to collect and evaluate.

The International Foundation will track and alert members to any further DOL guidance. You can view the Foundation’s InfoQuick resource on MPHAEA (members only) on the Workplace Mental Health Toolkit webpage.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.