According to speaker John Barlament, Shareholder, Reinhart Boerner Van Deuren, S.C., in his webcast “New Mental Health Parity Guidance: More Clarity, But More Compliance Obligations,” held on August 30, 2023, new guidance has been “desperately needed” on the topic of mental health parity, although clarifications and new rules will come with additional compliance reporting.
The last set of final regulations were released almost ten years ago on November 13, 2013 as The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). On August 3, 2023, the Internal Revenue Service (IRS), the Department of Labor’s Employee Benefits Security Administration (EBSA), and the Health and Human Services Department (HHS) released a proposed rule along with a technical release and an enforcement report. The proposed rule includes a public comment period through October 17, 2023, after which the agencies will produce the final regulations. For a more technical overview on the proposed rule, view our blog DOL Guidance on Mental Health Parity: Proposed Rules for NQTL Comparative Analysis.
Three Takeaways for Plan Sponsors
While only proposed at this point, the IRS, EBSA and HHS are working on the final regulations to be tentatively effective for plan years starting January 1, 2025. Indications are that the final regulations may be released during the first quarter of 2024. Below are three takeaways plan sponsors can address now in preparation for the release.
Utilize 2021 NQTL Comparative Analysis Requirement as a Starting Point
In December 2020, the Consolidated Appropriations Act, 2021 (CAA) required health plans to create a written analysis by February 2021 that would compare the health plan’s nonquantitative treatment limitations (NGTLs) that applied to medical/surgical (M/S) and mental health/substance use disorder (MH/SUD) benefits. Barlament said, “In reality, probably no one had it done by then because it was still unclear what needed to be in the analysis,” and there were no examples of the data to include or any formatting requirements.
Plan sponsors who have worked on the 2021 comparative analysis data requirements and have previously compiled data should hold on to what they have and use that as a starting point for demonstrating compliance. To review challenges that plans have experienced in documenting comparative analyses, view our previous blog, Can Your Plan Clear Mental Health Parity Compliance Hurdles? It is unlikely that most plan sponsors will be able to complete all data gathering and analysis alone. Rather, they most likely will require input from their third-party administrators (TPAs), pharmacy benefit managers (PBMs), telehealth vendors, legal counsel, etc. Start or continue discussing compliance strategies with vendors.
Examples of “Meaningful Benefits” for Two Mental Health Conditions
The 2013 MHPAEA regulations did not technically require plans to cover MH or SUD benefits. Under the 2023 proposed regulations, if a plan provides any benefits for MH/SUD in any classification, a plan must provide “meaningful benefits” for treatment of that condition or disorder in each classification. This seems intended to prevent a plan from providing a range of M/S benefits, but “only one limited benefit” for MH/SUD. Barlament said, “Examples in the proposed rules of meaningful benefits include applied behavioral analysis (ABA) therapy as a treatment for autism spectrum disorder and nutritional counseling as a treatment for eating disorders.
Data to Support NQTLs
DOL seeks information beyond the design of NQTLs to include participants’ actual experiences and outcomes. Under the proposed rules, measuring data on the impact of NQTLs would be required, but without relevant data and meeting comparative analysis content requirements for each NQTL, “plans and issuers would not be permitted to impose” the NQTL. Although it’s unknown whether the rules will be finalized as proposed, plan sponsors should consider creating a game plan for updating NQTL data based on current guidance at a minimum to ensure they have enough time to complete sufficient documentation before the tentative January 1, 2025 deadline. TPAs and PBMs hold much of the plan data and will start to feel pressure from their plan sponsor clients, so communication with vendors will be key to ensure a smooth process.
Members are encouraged to view the webcast recording to learn more about the three-part process for every NQTL to prove that data-based NQTLs are sufficiently justified. Barlament goes in depth on each step of the process (e.g., step one, called the “no more restrictive” requirement, has a four-part test) as well as proposed rules on separate limitations, fiduciary certification and more.
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.