Mental Health Parity: Comparative Assessments Required for Certain Nonquantitative Treatment Limits in Group Health Plans

As noted in several recent blog posts, the year-end Consolidated Appropriations Act (CAA) included a number of employee benefits-related changes. One set of changes represents an effort to further strengthen protections under the Mental Health Parity and Addiction Equity Act (MHPAEA). These new provisions will require group health plans and health insurance issuers (collectively, “group health plans”) that provide both medical and surgical (M/S) benefits and mental health or substance use disorder (MH/SUD) benefits and that impose nonquantitative treatment limitations (NQTL) on MH/SUD benefits to perform comparative analyses to demonstrate compliance with mental health parity requirements. Plans will also be required to provide that comparative information to the DOL, HHS or applicable State authority upon request (DOL for ERISA-governed group health plans). These new requirements go into effect February 10, 2021 (45 days after enactment of the CAA).

These new mental health parity requirements are the latest in a series of efforts to strengthen protections for mental health-related benefits in group health plans. Last year, the DOL updated its MHPAEA self-compliance tool to assist group health plans in evaluating various differences in M/S and MH/SUD benefits.

Group health plans will be required to “perform and document comparative analyses of the design and application of NQTLs.” NQTLs include limitations like preauthorization or pre-approval requirements, fail-first protocols, medical necessity review authority, likelihood of improvement limitations and similar limitations to treatment. The analyses must document that the processes, strategies, evidentiary standards and other factors used to apply the NQTL to MH/SUD benefits are comparable to, and no more stringent than, those applied to M/S benefits.

In addition, the group health plan must make its comparative analyses available to the DOL upon request, along with certain additional information demonstrating compliance with these requirements. If the group health plan’s analyses do not adequately support compliance with respect to the plan’s NQTLs, the plan will have a 45-day correction period to propose actions and submit additional data and analysis to bring the plan into compliance. If that process fails, the DOL will make a final determination of non-compliance. In that event, the group health plan must notify participants of the non-compliance determination. The DOL will also identify non-compliant plans by name in the publicly available annual reports it is required to make to Congress on these matters.

The CAA requires group health plans to make this information available to requesting agencies beginning on February 10, 2021. It also requires the agencies to make these requests of at least 20 plans per year.

The DOL and other agencies are also obligated to issue additional guidance on these matters. Regulations must be finalized within 18 months of CAA’s enactment. In discussing those requirements, the CAA provisions also specifically reference the prior DOL “Warning Signs” guidance on NQTLs. That guidance provided some examples of “red flag” limitations on MH/SUD benefits that might indicate a potential MHPAEA compliance issue.

The February 10 effective date was an unwelcome surprise in the legislation. While it may be some time before the DOL and other agencies gear up to begin requesting this information, group health plans should consider these issues promptly. Some plans may have already performed the assessments contemplated by these new requirements when implementing NQTLs in their plans. If not, these additional steps will need to be taken to ensure compliance and prepare for possible informational requests from the DOL. While employers that sponsor insured health plans will presumably look to their insurers with respect to these matters, sponsors of self-funded group health plans will likely need to work with their third party administrators, counsel or other benefits consultants to prepare the analyses necessary to meet these new requirements.