At the end of 2020, the Consolidated Appropriations Act (CAA) was signed into law. The CAA amended the Mental Health Parity and Addiction Equity Act (MHPAEA) and requires group health plans that provide mental health and substance use disorder (MH/SUD) benefits and medical and surgical (Med/Surg) benefits to prepare a comparative analysis regarding nonquantitative treatment limits (NQTLs). As of February 10, 2021, group health plans must be prepared to provide their NQTL comparative analysis to a requesting governmental authority. On April 2, 2021, the Department of Labor (DOL), the Department of Health and Human Services, and the Department of Treasury (collectively, the "Agencies") issued FAQs to help group health plans understand their compliance obligations.
Under the MHPAEA, group health plans must comply with the following three requirements:1
- Annual or Lifetime Limits: Under this requirement, group health plans that apply annual or lifetime dollar limits for Med/Surg benefits must apply the same (or higher) dollar limits for MH/SUD benefits.
- Parity as to Other Financial Requirements and Quantitative Treatment Limitations: Group health plans must provide parity between Med/Surg benefits and MH/SUD benefits with respect to the application of financial requirements (such as deductibles, coinsurance, copays, and out-of-pocket maximums) and quantitative treatment limitations (such as number of treatments, visits, or days of coverage).
- Parity as to NQTLs: Group health plans must also provide parity between Med/Surg benefits and MH/SUD benefits with respect to NQTLs (such as medical management, step therapy, and pre-authorizations).
More specifically, with regard to NQTL parity, the MHPAEA prohibits a group health plan from imposing NQTLs with respect to MH/SUD benefits in any classification, unless any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to MH/SUD benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors that apply to Med/Surg benefits in the same classification.
To ensure compliance with the NQTL parity mandates of the MHPAEA, the CAA requires group health plans to perform and document a comparative analysis showing the design of NQTLs and their application to MH/SUD benefits and Med/Surg benefits. Under the CAA, the DOL must request at least 20 comparative analyses from different health plans per year and may be based, at least initially, on complaints received. The DOL must request a comparative analysis if it receives a complaint regarding MHPAEA noncompliance that concerns NQTLs or if it discovers potential violations. Additionally, plans that are subject to ERISA must make their comparative analyses available to plan participants and beneficiaries upon request.
The Agencies' FAQs provide guidance to assist plans in determining what information should be included in their NQTL comparative analysis. The Agencies advise that the comparative analyses must be "sufficiently specific, detailed, and reasoned" and that a general statement of compliance will be insufficient. Furthermore, the Agencies note that DOL's MHPAEA Self-Compliance Tool provides a helpful process with examples and tips that plans may use to conduct an NQTL comparative analysis.
Additionally, the Agencies provide the following list of nine elements that, at a minimum, must be included in the comparative analysis:
- A clear description of the specific NQTL, plan terms, and policies at issue.
- Identification of the specific MH/SUD and Med/Surg benefits to which the NQTL applies within each benefit classification, and a clear statement as to which benefits identified are treated as MH/SUD and which are treated as Med/Surg.
- Identification of any factors, evidentiary standards or sources, or strategies or processes considered in the design or application of the NQTL and in determining which benefits, including both MH/SUD benefits and Med/Surg benefits, are subject to the NQTL. Analyses should explain whether any factors were given more weight than others and the reason(s) for doing so, including an evaluation of any specific data used in the determination.
- To the extent the plan defines any of the factors, evidentiary standards, strategies, or processes in a quantitative manner, it must include the precise definitions used and any supporting sources.
- The analyses, as documented, should explain whether there is any variation in the application of a guideline or standard used by the plan between MH/SUD and Med/Surg benefits and, if so, describe the process and factors used for establishing that variation.
- If the application of the NQTL turns on specific decisions in administration of the benefits, the plan should identify the nature of the decisions, the decision maker(s), the timing of the decisions, and the qualifications of the decision maker(s).
- If the plan's analyses rely upon any experts, the analyses, as documented, should include an assessment of each expert's qualifications and the extent to which the plan ultimately relied upon each expert's evaluations in setting recommendations regarding both MH/SUD and Med/Surg benefits.
- A reasoned discussion of the plan's findings and conclusions as to the comparability of the processes, strategies, evidentiary standards, factors, and sources identified above within each affected classification, and their relative stringency, both as applied and as written. This discussion should include citations to any specific evidence considered and any results of analyses indicating that the plan or coverage is or is not in compliance with MHPAEA.
- The date of the analyses and the name, title, and position of the person or persons who performed or participated in the comparative analyses.
The Agencies also provide a list of examples of practices that plans should avoid in responding to requests for NQTL comparative analyses, such as:
- Producing a large volume of documents without a clear explanation of how and why each document is relevant to the comparative analysis;
- Identifying processes, strategies, sources, and factors without the required or clear and detailed comparative analysis;
- Identifying factors, evidentiary standards, and strategies without a clear explanation of how they were defined and applied in practice; or
- Referencing factors and evidentiary standards that were defined or applied in a quantitative manner, without the precise definitions, data, and information necessary to assess their development or application.
Finally, the Agencies published the following list of NQTLs that are expected to be the current focus of DOL enforcement actions:
- Prior authorization requirements for in-network and out-of-network inpatient services;
- Concurrent review for in-network and out-of-network inpatient and outpatient services;
- Standards for provider admission to participate in a network, including reimbursement rates; and
- Out-of-network reimbursement rates (plan methods for determining usual, customary, and reasonable charges).
Considerations for Employers Sponsoring Group Health Plans
Based on this new requirement and the FAQs, plan sponsors should consider:
- Reviewing their services agreements with third-party administrators to determine who is responsible for MHPAEA compliance.
- Compiling the nine data elements listed above into a comparative analysis in the event they receive a request from a governmental authority or plan participant. Plan sponsors will need to request much of the required data from their third-party administrator.
- Engaging an expert to analyze the data and evaluate whether the plan's NQTLs comply with the requirements under the MHPAEA.
As part of this exercise and to satisfy the MHPAEA, plan sponsors may also wish to incorporate a documented review of the annual/lifetime dollar limits, other financial requirements, and quantitative treatment limitations.
 The mental health and substance use disorder parity requirements do not apply to group health plans of small employers. See 42 U.S.C. § 300gg-26(c)(1).