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DON’T PANIC – Mental Health Parity Compliance Expanded

By: Nick Bonds, Esq.

Among the compliance headaches nestled within the Consolidated Appropriations Act, 2021 (“CAA”), few have inspired more anxiety than Sec. 203 “Strengthening Parity in Mental Health and Substance Use Disorder Benefits.” With such little guidance and the shockingly early effective date (February 10, 2021), many self-funded groups are understandably alarmed that this CAA expansion of mental health parity compliance will get them in hot water with the DOL or HHS.

Granted, depending on the design of the health plan in question, and the types of limitations the group has imposed on their MH/SUD benefits, conducting and documenting this comparative analysis could be a daunting, labor-intensive task. Even so, it is worth noting that the February 10 date is not the deadline for plans to turn in their analysis – the documentation that a group has performed this analysis isn’t a filing that groups are required to hand in by a set calendar date. This analysis must only be disclosed to the DOL or HHS upon request by the regulators, and the regulators are required to request analyses from a minimum of 20 plans per year – the overwhelming majority of plans will likely not be asked to submit anything at all.

Furthermore, once a plan submits its documentation and analysis it will be on the regulators to review the information provided to determine if the group is not in compliance, at which time the plan will have 45 days to complete a new analysis and provide the regulators with their action plan for getting the group on the right track. The CAA itself is frustratingly sparse on detail, but it does list the following required information:

  1. The specific plan terms or other relevant terms regarding the NQTLs and description of all mental health or substance use disorder and medical or surgical benefits to which each such term applies in each respective benefits classification.
  2. The factors used to determine that the NQTLs will apply to mental health or substance use disorder benefits and medical or surgical benefits.
  3. The evidentiary standards used for the factors identified in clause (ii), when applicable, provided that every factor shall be defined, and any other source or evide3nce relied upon to design and apply the NQTLs to mental health or substance use disorder benefits and medical or surgical benefits.
  4. The comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to mental health or substance use disorder benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to medical or surgical benefits in the benefits classification.
  5. A disclosure of the specific findings and conclusions reached by the group health plan, including any results of the analyses described in this subparagraph that indicate that the plan is or is not in compliance with this section (i.e., the MHPAEA).

Of course, every plan subject to the MHPAEA will be best served by having their NQTL comparative analysis and documentation in order as soon as possible. Unfortunately, the DOL and HHS have yet to release comprehensive guidance on how to comply with this comparative analysis requirement. All we can say with certainty right now is that this analysis will likely require a fair amount of coordination between many facets of a plan’s administration, including claims processing, legal/compliance, PBMs, TPAs, and other vendors just to name a few. The DOL has in the past made other materials available that can provide a useful starting point, particularly the recently updated MHPAEA Self-Compliance Tool and the DOL’s “Warning Signs” checklist.

While neither of these documents perfectly align with the new analysis required under the CAA, these documents should give plans and administrators at least a baseline idea of the types of NQTLs that may receive the most scrutiny from the DOL. The CAA requires the regulators to finalize more extensive guidance and regulations within the next 18 months. While we keep our eyes out for that, plans with any of those NQTLs currently in place can start their analysis here.