Mental health parity compliance can be complex, but plan sponsors do not need to wait for an audit to spot potential problems. A practical first step is to review both written plan terms and how the plan operates in practice, especially for nonquantitative treatment limitations (NQTLs) that affect mental health and substance use disorder (MH/SUD) benefits.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) requires group health plans that provide MH/SUD benefits to cover those benefits in parity with medical/surgical (M/S) benefits.

On September 8, 2026, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) issued Field Assistance Bulletin (FAB) 2026-03, announcing that EBSA will prioritize NQTL comparative analysis enforcement in three areas with high potential for significant harm to participants and beneficiaries: separate treatment limitations, including exclusions; medical necessity standards and review processes; and network adequacy standards, with a focus on network admission standards and provider reimbursement methodologies. Consistent with the 2025 MHPAEA Report to Congress, released February 20, 2026, EBSA continues to focus on limitations that may reduce access to care. DOL also provided examples of potential problems in a compliance assistance document.

What Plan Sponsors Should Review

When reviewing for possible MHPAEA NQTL compliance problems, group health plans and administrators should look for differences between how NQTLs apply to MH/SUD benefits and M/S benefits.

DOL noted that the red flags below have appeared in EBSA investigations and may signal potential compliance concerns. Its guidance states that if these examples appear in written plan provisions or plan operations, plans should reassess compliance and take steps to address any problems.

Red Flags in Plan Documents or Policies

Coverage exclusions for specific MH/SUD services:

• Speech therapy
• Occupational therapy
• Nutritional counseling
• Applied behavioral analysis (ABA) therapy for autism
• Insomnia
• Residential care or partial hospitalization
• Medication assisted treatment
• Prescription drugs for mental health conditions
• Telehealth

Medical necessity criteria that may raise concerns:

• Parental involvement in a child’s treatment
• Exhausting or engaging with community resources
• Repeat diagnostic testing for autism spectrum disorder
• Requiring the patient to be fully motivated to participate in treatment
• Step therapy to begin or continue coverage

Network admission requirements for providers: Requirements for MH/SUD providers to join the network should be comparable to requirements for M/S providers. Potential red flags include requiring one provider type, but not the other, to complete extra steps.

• Resubmitting application paperwork multiple times
• Waiting longer after approval before being listed in network provider directories

Provider reimbursement methods that may lack parity:

• Using different methods to calculate network or out-of-network reimbursement amounts for MH/SUD providers than for M/S providers. For example, a plan may apply a set percentage discount to reimbursement rates for masters-level MH/SUD providers while masters-level M/S providers receive no discount or a smaller discount.

Other treatment limitations that may raise concerns: It may be a red flag if a requirement applies to MH/SUD treatment but not to comparable M/S treatment, such as excluding treatment based on:

• A prior course of treatment was not completed in full
• The participant is unlikely to improve or substantially improve in functioning or condition
• Symptoms are considered chronic or long-term

Employee Assistance Program (EAP) gatekeeping: It may be a red flag if an EAP is used as a gatekeeper for MH/SUD treatment but no comparable gatekeeping program applies to M/S treatment. Examples include:

• Requiring participants to exhaust all EAP services before MH/SUD services under the plan are covered
• Requiring an assessment from an EAP provider or a referral from an EAP provider before the plan covers any MH/SUD services, without requiring a comparable gatekeeping program for M/S services
• Stating in written documents that the EAP is only an added benefit, while using the EAP in practice as a gatekeeper to MH/SUD benefits

Red Flags in Plan Operations

Plan operations should match written plan terms. A potential concern exists when the way a plan operates is more burdensome for MH/SUD care than for M/S care, even if the written documents appear compliant. Examples include:

• A written medical necessity policy describes parental involvement as a best practice, but in practice a claim is denied if parental involvement is not met.
• MH/SUD claims take longer to receive prior authorization or concurrent care review than M/S claims.
• The prior authorization process for M/S benefits uses automated submissions and approvals, while the process for MH/SUD benefits is manual and requires more documentation.

Where to Look for Operational Red Flags

Participant complaints can point to operational issues that may not be clear from coverage documents. Plans should pay attention to patterns, such as a disproportionate number of MH/SUD complaints compared with M/S complaints, including complaints about unfair claim denials or difficulty accessing in-network providers.

Plans should have a process for receiving and documenting participant complaints related to both MH/SUD benefits and M/S benefits.

How to Prepare for a DOL NQTL Compliance Review

Taking practical steps now can help a plan respond more effectively if DOL identifies it for an NQTL compliance review.

• Keep documentation ready, including coverage documents, comparative analyses, supporting documents and records of monitoring activities.
• Establish an internal response process for communicating with DOL and key stakeholders, with timely and organized responses.
• Re-review comparative analyses to confirm they are complete and accurate.
• Respond to DOL requests and follow-up questions with detailed, complete answers supported by data and facts, not general statements.
• Prepare for questions about apparent disparities.
• Prepare for questions about how an NQTL is applied in practice.
• If concerns or violations are identified, understand the issues and propose appropriate corrective action.
• When correcting problems, consider how to address the issue going forward and whether participants were harmed in the past. If so, consider how to address those past harms.
• Share proof of voluntary corrective action with DOL.

Conclusion

MHPAEA red flags do not automatically mean a plan is out of compliance, but they should prompt a closer review. Plan sponsors should compare written terms with actual plan operations, look for differences in participants’ access to MH/SUD and M/S coverage and document how any concerns are addressed.

A focused review now can help plans identify potential access barriers, strengthen NQTL documentation and be better prepared if DOL asks questions.

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