On September 9, 2024, the U.S. Departments of Health and Human Services, Labor, and the Treasury (collectively, the Departments) released much-anticipated final rules under the Mental Health Parity and Addiction Equity Act (the Mental Health Parity Act, or Act), specifically addressing the requirement that plans document their compliance with the Act through a detailed written comparative analysis of each nonquantitative treatment limitation (NQTL) that applies to mental health and substance use disorder (MH/SUD) benefits.

The final rules generally apply to group health plans on the first day of the first plan year beginning on or after January 1, 2025.  However, several requirements are not effective until the first plan year beginning on or after January 1, 2026.

Background.  Under the Mental Health Parity Act, group health plans are required to perform and document a comparative analysis of the design and application of each NQTL that applies to MH/SUD benefits under the plan.  The analysis must demonstrate, through a detailed review of plan terms and operations, that the plan does not impose any NQTLs with respect to MH/SUD benefits that are more restrictive than those that are applied to medical and surgical (M/S) benefits.

An NQTL is any limit imposed by a group health plan on the scope or duration of benefits that is not expressed numerically, for example pre-certification requirements, network composition, formulary design for prescription drugs, or standards limiting or excluding benefits based on medical necessity.

The required comparative analysis must be made available to the Departments for review upon request.  It must also be provided to plan participants within 30 days of a written request, including in connection with an adverse benefit determination related to MH/SUD benefits.

Key Aspects of the New Rules.  The new final rules:

• Formalize and expand the components required to be included in the NQTL comparative analysis.
• Prohibit plans and issuers from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to MH/SUD benefits as compared to M/S benefits when designing NQTLs.
• Require plans to review and evaluate claims and other relevant data to determine the impact of the plan’s NQTLs on participants’ access to MH/SUD benefits and take reasonable action to address any material issues.
• Create a new “meaningful benefits” standard for MH/SUD benefits. Under this standard, if a plan provides any MH/SUD benefits, the plan must provide “meaningful benefits” for each condition or disorder covered in every benefit classification in which meaningful M/S benefits are provided. This provision may require plans to evaluate and expand the scope of their covered MH/SUD services.
• Require plan fiduciaries to certify in writing that they (i) engaged in a prudent process to select one or more qualified service providers to conduct the plan’s NQTL comparative analysis, and (ii) satisfied their fiduciary obligation under ERISA to monitor those service providers.
• Set forth the steps the Departments and a group health plan must follow when the Departments request a group health plan’s NQTL comparative analysis. Notably, under the final rules, a group health plan has only 10 business days to respond to an initial request for a comparative analysis and 45 days to respond to any notice that the analysis is insufficient.

Required Coordination with, and Necessary Reliance on, Plan Service Providers.  For self-insured group health plans, completion of an NQTL comparative analysis requires significant coordination with plan’s applicable third-party administrators (TPAs) for medical, prescription drug, and behavioral health benefits.

The Departments have generally been unsympathetic to how difficult it has been for plan sponsors to collect the information necessary to ensure compliance from their TPAs.  The analysis is considerably more difficult for plans that use multiple TPAs to administer their medical, prescription drug, and behavioral health claims, because the TPAs must coordinate and share information to ensure a complete analysis.

A potential silver lining is that the final rules provide plan sponsors with an opportunity to engage (or re-engage) their TPAs to discuss a process for compliance, and to insist on contract provisions in administrative services agreements that: (i) require TPAs to provide the applicable data and analysis needed to comply with the NQTL comparative analysis requirements, and (ii) ensure compliance with related ERISA fiduciary obligations.

If you have any questions about the Mental Health Parity Act, please contact your SGR benefits counsel.