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The Departments of the Treasury, Labor, and Health & Human Services released much anticipated final rules further clarifying and implementing the requirements related to the Mental Health Parity and Addiction Equity Act (MHPAEA).
The goal of the MHPAEA is to make sure that health plans cover mental health (MH) and substance use disorders (SUD) fairly. The law and its related regulations require all applicable plans to ensure that any plan’s financial requirements and coverage terms related to MH/SUDs are “in parity” with (meaning no more restrictive than) the requirements related to substantially all medical/surgical (M/S) services in the same benefit category.
There are two types of conditions that plans have to look out for and analyze—quantitative treatment limits (QTLs) and non-quantitative treatment limits (NQTLs). QTLs are numbers-based and include items like cost-sharing requirements and treatment limits that can be counted (such as a limit on the number of covered visits to a specific kind of provider). NQTLs are all of the treatment limitations that cannot be tabulated, such as pre-authorization requirements, provider network limitations, formulary design, and medical necessity standards.
MHPAEA does not require group health plans to provide MH or SUD benefits, but if the plan does offer such benefits beyond what is considered preventive under the Affordable Care Act, the MHPAEA requirements apply. Fully insured and self-funded group health plans of all sizes are required to comply with MHPAEA, while excepted benefits or retiree-only plans are exempt.
Final rule highlights
Outlined below are several notable clarifications and updates reflected in the final rules.
Meaningful benefits
The final rules clarify that if a plan provides MH/SUD benefits for a specific condition or disorder, the plan must provide “meaningful benefits” for that condition or disorder in every classification in which medical/surgical benefits are provided. Meaningful benefits are defined as those in which the plan provides core treatment for that specific condition/disorder in each classification in which the plan provides benefits for a core treatment for medical conditions or surgical procedures. “Core treatment,” in turn, is defined as “a standard treatment or course of treatment, therapy, service, or intervention indicated by generally recognized independent standards of current medical practice.”
New requirements for NQTLs
The MHPAEA provides that plans are permitted to impose NQTLs for MH/SUD benefits if they are no more restrictive than those predominantly applied to substantially all M/S benefits in the same class. To ensure these general requirements are met, the final rules specify that NQTLs must meet certain design and application requirements and relevant data evaluation requirements. The final rules also clarify that a plan may not impose any NQTL on MH/SUD benefits if that specific NQTL does not also apply to M/S benefits in the same classification.
The design and application requirement
A plan may not impose an NQTL for MH/SUD benefits in any classification unless the factors (processes, strategies, evidentiary standards, etc.) used in designing and applying the NQTL to MH/SUD benefits are comparable to and applied no more stringently than those used in designing and applying the NQTL for M/S benefits in the same class. Additionally, a plan cannot rely upon discriminatory (i.e., biased or not objective) factors or evidentiary standards to design a NQTL for MH/SUD benefits.
Relevant data evaluation requirement
The plan must collect and evaluate relevant data to assess how the application of a NQTL impacts access to MH/SUD benefits. If the evaluation suggests that the NQTL negatively impacts access to MH/SUD benefits in comparison to M/S benefits, the plan must take reasonable action as necessary to address the differences. The final regulations include examples of data plans may choose to collect for analysis, actions groups can take to resolve differences in access, and specific requirements for the data evaluation of network composition.
Updated requirements for comparative analyses
Group health plan sponsors are required to prepare a comparative analysis documenting compliance for any NQTLs. The final rules clarify existing content requirements, providing much more detail about what is expected to be evaluated and included in the written analysis. They also reflect a new requirement that the analyses include an evaluation of relevant data.
Fiduciary certification
For plans subject to ERISA, the final rules include a new requirement that the comparative analysis include a certification by the plan’s fiduciary that they (1) prudently selected qualified service providers to perform and document their plan’s comparative analysis and (2) satisfied their duty to monitor those service providers.
Consequences of non-compliance
If an agency identifies a plan that fails to provide a satisfactory comparative analysis and/or fails to correct any insufficiencies within the timeframe required by the applicable agency, the agency may prohibit the plan from imposing any NQTL that cannot be adequately shown to be in parity with M/S benefits. Additionally, the agencies may name the plan (or sponsoring employer) in the agencies’ enforcement report to Congress. Finally, the agencies may require the plan to notify their plan participants in writing that the plan is not in compliance with the MHPAEA. Separately, plans subject to ERISA are at risk of civil penalties if they are unable to provide a comparative analysis within 30 days of receiving a request by a plan participant or beneficiary.
Applicable deadlines
The majority of the final rules apply for plan years beginning on or after January 1, 2025. However, the more substantial revisions related to the meaningful benefits standard, the prohibition on discriminatory factors and evidentiary standards, the relevant data evaluation requirement, and the corresponding comparative analysis requirements will go not go into effect until plan years beginning on/after January 1, 2026. In the meantime, plans already subject to the MHPAEA should continue to comply with the existing requirements while working toward bringing plans into compliance with the final rule by the applicable deadlines.
Employer actions
The final rules make it clear that MHPAEA requirements are exceedingly complex to navigate and implement. Employers need to rely heavily on carriers, TPAs, and other service providers to provide a compliant plan design, properly administer claims, and evaluate and document compliance in a detailed comparative analysis.
The carrier is directly responsible for ensuring compliance and performing the analyses required by the MHPAEA for fully insured plans. Employers with such plans should nonetheless obtain copies of the analyses their carriers completed for all coverage options offered in case they receive a participant or agency request for documentation of their plan’s compliance.
When it comes to self-insured plans, however, the employer is primarily responsible for compliance with the MHPAEA. These employers should confirm that their plan’s TPA, PBM, and other vendors are willing to comply with the MHPAEA’s requirement and provide the data needed for a comparative analysis. Given the complexity of these requirements, however, we encourage employers with self-insured plans to consult with a specialist for the preparation of a comprehensive, compliant comparative analysis. MZQ Consulting will be updating our MHPAEA comparative analysis product in accordance with the requirements outlined in the final rule by the required deadlines. For more information about our QTL and NQTL services, please reach out to engage@mzqconsulting.com.
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