New Mental Health Parity Guidance Issued
Federal law does not require self-funded medical plans to provide mental health or substance use disorder benefits. However, those employers who choose to offer these benefits are required to comply with the MHPAEA’s parity requirements. Generally speaking, the MHPAEA requires mental health and substance use disorder benefits to be provided on the same or more favorable terms as substantially all medical and surgical benefits. In practice, compliance with these rules has proven to be a complex and time-consuming task for plan sponsors, as illustrated by the DOL’s updated compendium of existing MHPAEA guidance.
The proposed regulations focus primarily on the design and administration of non-quantitative treatment limitations (NQTL). NQTLs are benefit limitations that are not expressed numerically. For example, a pre-authorization requirement is an NQTL, where a copay requirement is a quantitative treatment limitation. The MHPAEA requires plans to prepare “comparative analyses” to demonstrate that NQTLs are applied to mental health and substance use benefits on the same terms as major medical benefits. (For more information on this requirement, please see our briefing on the subject.)
In their most-recent report to Congress, the Departments explained that most of the analyses provided by group health plans on audit have not met their standards:
“Comparative analyses submitted by plans and issuers should give EBSA a sound basis for determining whether plans and issuers are complying with MHPAEA's NQTL provisions. In actual practice, however, the comparative analyses that plans and issuers are performing and providing to the Secretary for review commonly fall far short of MHPAEA's requirements.”
Consistent with these findings, the Departments propose a new and more robust set of guidelines for the NQTL comparative analyses. For example, the proposed regulations would require plans to analyze outcomes data to determine whether the NQTLs for mental health and substance use disorder benefits are administered on the same terms as medical and surgical benefits.
The Departments also expressed concern that “there is a significant disparity between how often participants and beneficiaries have little or no choice under their plan or coverage but to utilize out-of-network mental health and substance use disorder providers and facilities, as compared to medical/surgical providers and facilities.” Accordingly, the proposed regulations address how to consider network adequacy when analyzing the impact of a NQTL on mental health and substance use disorder benefits. The Department of Labor issued Technical Release 2023-01P alongside the proposed regulations to provide further detail on this requirement and to solicit comments from the public.
Ballard Spahr’s employee benefits group is actively monitoring these proposed regulations and will provide additional analysis in the coming weeks. In the meantime, however, plan sponsors should be aware that the MHPAEA remains a top enforcement priority, and compliance is likely to become an even more rigorous undertaking. The proposed enhancements to the comparative analysis regulations will require plan sponsors to work closely with their claims administrators to provide the level of detail required by the Departments. Plan sponsors entering into new service agreements (or renewing existing relationships) should ensure that their outside third party administrators are prepared to provide the support necessary to meet the MHPAEA analysis obligations under both the existing requirements and the proposed version of these rules. Plan sponsors may also be forced to consider whether the burdens and costs associated with the MHPAEA will require them to rethink their coverage for mental health and substance use disorder benefits.
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