Requirements Related to the Mental Health Parity and Addiction Equity Act: Final Rules, 26 CFR Part 54; 29 CFR Part 2590; 45 CFR Parts 146 and 147, 89 Fed. Reg. __ (__, 2024); Fact Sheet: Final Rules Under the Mental Health Parity and Addiction Equity Act (MHPAEA) (Sept. 9, 2024)
The DOL, HHS, and Treasury have released final rules under the Mental Health Parity and Addiction Equity Act (MHPAEA), focusing on nonquantitative treatment limitations (NQTLs) and the comparative analysis requirement established under the CAA, 2021 (see our article). The final rules reflect changes in response to almost 10,000 public comments that were received following last year’s proposed rules (see our article). The final rules amend existing MHPAEA regulations to incorporate new and revised definitions of key terms and to specify the steps that plans (or insurers) must take to comply with MHPAEA. They also include provisions codifying minimum standards for NQTL comparative analyses, applying MHPAEA requirements to individual health insurance arrangements, and reflecting the sunset of the non-federal governmental plan opt-out election (see our article). Here are highlights relevant to employer-sponsored plans:
Meaningful Benefit Requirement. Plans that provide any benefits for a mental health (MH) condition or substance use disorder (SUD) must provide “meaningful benefits” for that condition or disorder in every benefit classification in which meaningful medical/surgical benefits are provided. Meaningful benefits require coverage of a core treatment for the condition or disorder in each classification in which the plan covers a core treatment for one or more medical conditions or surgical procedures.
Definitions. The definitions of the terms “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits” are amended by removing references to state guidelines. When defining whether conditions or disorders are MH conditions or SUDs, plans must follow the most current version of the International Classification of Diseases (ICD) or the Diagnostic and Statistical Manual of Mental Disorders (DSM). There are new definitions and examples for the following terms used in evaluating the design and application of NQTLs:
- Evidentiary Standards. Any evidence, sources or standards used in designing or applying a factor with respect to an NQTL.
- Factors. All information, including processes and strategies (but not evidentiary standards), used to design an NQTL or determine whether or how it applies to plan benefits.
- Processes. Actions, steps, or procedures used to apply an NQTL.
- Strategies. Practices, methods, or internal metrics used to design an NQTL.
Requirements for NQTLs. Plans may not impose NQTLs with respect to MH/SUD benefits in any classification that are more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all medical/surgical benefits in the same classification. Acknowledging commenters’ concerns that NQTLs are inherently nonquantifiable, the agencies declined to finalize a proposed mathematical test for defining “substantially all” and “predominant.” In implementing an NQTL, the plan must satisfy two sets of requirements:
- Design and Application. The plan 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 applied no more stringently than, those used in designing and applying the limitation with respect to medical/surgical benefits in the same classification. In addition, plans may not use discriminatory factors and evidentiary standards in designing an NQTL to be imposed on MH/SUD benefits. Generally recognized independent professional medical or clinical standards are considered nonbiased and objective, as are “carefully circumscribed measures” reasonably designed to detect or prevent and prove fraud and abuse and minimize the negative impact on access to appropriate MH/SUD benefits.
- Relevant Data Evaluation. Plans must collect and evaluate relevant data in a manner reasonably designed to assess and consider the impact of the NQTL on relevant outcomes related to access to MH/SUD benefits and medical/surgical benefits. “Relevant data” may vary based on the facts and circumstances; examples are provided of relevant data for all NQTLs, including specific examples for NQTLs related to network composition standards.
Comparative Analysis Requirement. Plans must perform and document NQTL comparative analyses and submit them to a requesting agency within ten business days of the request. The analysis must: (1) describe the NQTL; (2) identify and define the factors and evidentiary standards used to design or apply the NQTL; (3) describe how factors are used in the design or application of the NQTL; (4) evaluate whether processes, strategies, evidentiary standards, or other factors are comparable to, and applied no more stringently than, those with respect to medical/surgical benefits, as written and as applied; and (5) address findings and conclusions regarding comparability and relative stringency. Plans must also prepare and make available to the agencies, upon request, a written list of all NQTLs imposed under the plan. An exhaustive list of NQTLs is not included as requested by commenters; rather, plans must analyze any NQTL that limits the scope or duration of treatment. The agencies intend to provide additional examples in a future update to the MHPAEA Self-Compliance Tool (see our article).
Fiduciary Certification. For plans subject to ERISA, one or more named fiduciaries must review and understand any NQTL comparative analysis prepared by or on behalf of the plan, and must certify that the fiduciary prudently selected qualified service providers to perform and document the analysis and that the fiduciaries have satisfied their duty to monitor those service providers. The final rules omit a proposed requirement to certify that the comparative analysis complies with regulatory content requirements.
Applicability Date. The final rules generally apply to group health plans for plan years beginning on or after January 1, 2025. However, several provisions— including those implementing the meaningful benefits standard, the prohibition on discriminatory factors and evidentiary standards, required use of outcomes data, and certain related comparative analysis requirements—will not apply until plan years beginning on or after January 1, 2026. In the meantime, plans must continue to comply with existing requirements, including the CAA, 2021 amendments to MHPAEA.
EBIA Comment: The agencies anticipate that the final rules will result in changes in network composition and medical management techniques related to MH/SUD care, more robust MH/SUD provider networks, and fewer and less restrictive prior authorization requirements for MH/SUD care. But opposition has already been registered by a Congressional committee, and legal challenges seem likely, even though the rules appear to have been grounded in specific statutory authority, perhaps in an attempt to stymy a challenge under Loper Bright (see our article). For more information, see EBIA’s Group Health Plan Mandates manual at Section IX (“Mental Health Parity”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C.2 (“MHPA and MHPAEA: Mental Health Parity”).
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