As previously reported, the Consolidated Appropriations Act, 2021 ("CAA") amends the Mental Health Parity and Addiction Equity Act of 2008 "MHPAEA") to require group health plans and health insurers to conduct a comparative analysis of non-quantitative treatment limitations ("NQTLs") imposed on mental health/substance use disorder ("MH/SUD") benefits as compared to medical and surgical benefits. NQTLs are limits on the scope or duration of treatment that are not expressed numerically.
On April 2, 2021, the Departments of Labor, the Treasury and Health and Human Services (collectively, "the Departments") issued FAQ 45, providing the first guidance on this new requirement.
Briefly, the FAQ:
Below you will find additional details on the guidance.
The Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) applies to:
With respect to NQTLs, the focus is not on whether the final result is the same for MH/SUD benefits as for medical/surgical benefits, but rather on whether the underlying processes, strategies, evidentiary standards, and other factors are in parity.
The CAA amends MHPAEA to expressly require a group health plan that imposes NQTLs on MH/SUD benefits to perform and document a comparative analysis of the design and application of NQTLs. Beginning February 10, 2021, plans (and health insurance carriers) must make a comparative analysis available to the Departments or applicable state authorities upon request.
As the requirement applies beginning February 10, 2021, plan and issuers should now be prepared to make their comparative analysis available upon request.
Note the CAA expressly requires that plans and carriers conduct and document the comparative analysis of the design and application of NQTLs. It is no longer a best practice. The carrier is responsible for compliance for fully insured plans subject to the MHPAEA. For self-funded plans subject to MHPAEA, the employer is ultimately responsible for compliance. Employers should coordinate with third-party administrators (“TPAs”) or other vendors to assist in performing this analysis.
The FAQ provides additional clarification, including minimum requirements for a comparative analysis to be sufficient under the law. The analysis must contain a detailed, written, and reasoned explanation of the specific plan terms and practices at issue and include the bases for the plan’s or carrier’s conclusion that the NQTLs comply with MHPAEA. The report developed by the plan must include comparative analysis specific to each NQTL imposed on a MH/SUD benefit.
At a minimum, sufficient analyses must include a robust discussion of all of the elements listed below.
A general statement of compliance, coupled with a conclusory reference to broadly stated processes, strategies, evidentiary standards, or other factors will not be sufficient to meet this statutory requirement. The guidance suggests that plans should utilize the DOL’s own self-compliance tool to determine their compliance with MHPAEA. The tool can be accessed at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
Plans should be prepared to make available all documents that support the analysis and conclusions of their comparative analysis. The FAQ and the DOL’s self-compliance tool include a list of the types of documents that should be available to support a NQTL analysis.
The guidance provides examples of practices and procedures plans should avoid in responding to a request for comparative analysis as they are insufficient, including:
In addition to the Departments, state regulators, participants, beneficiaries and/or enrollees (or their authorized beneficiary) can also request a NQTL analysis. As with other requests, plans must be prepared to make this information available upon request. The guidance also makes clear that any NQTL analysis must also be provided, free of charge, upon request as part of an adverse determination appeal under a non-grandfathered group health plan.
The Departments will focus their enforcement efforts on any NQTL that is brought to their attention through a complaint or violation. In the absence of such a complaint, the Departments will focus their enforcement efforts on the following NQTLs:
If a request for a comparative analysis references a specific NQTL, plans should also be prepared to make available a list of all other NQTLs that they have performed a comparative analysis on. It is possible that plans may be required to submit analyses for these additional NQTLs.
If the Departments conclude, after review of the analyses, that the plan has provided insufficient information, the Departments can specify the information necessary for the plan to comply with the request. If the Departments conclude that the plan is not in compliance with MHPAEA, the plan will be required to specify what actions they will take to bring the plan into compliance. The Act imposes a 45-day corrective action period where the plan will be required to submit new analyses showing that they have now come into compliance with MHPAEA. If the plan is still noncompliant after the corrective action period, the plan, within 7 days of receipt of the Departments’ determination of noncompliance, must notify all individuals enrolled in the plan or coverage that the coverage has been determined to be out of compliance with MHPAEA.
Carriers of fully insured plans should be responsible for compliance with this new requirement. Self-funded plans should coordinate with their third-party administrators or carrier partners to determine if they are able to conduct the analysis for the plan. Plans should be prepared to apply pressure on their TPAs or carrier partners if they initially refuse to conduct the analyses. The carriers and TPAs are in the best position to complete these NQTL analyses. However, if after repeated requests these vendors are still unwilling to provides the analyses, plans must be prepared to complete the analyses themselves.
Our Advisors offer in-depth analysis and are ready to help you successfully navigate employee benefits and health insurance.