By: David Ostrowsky

In 2008, under the George W. Bush administration, the Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted to ensure that health insurance plans did not impose more restrictive limitations on mental health and substance use disorder (MH/SUD) benefits – assuming they were initially covered – than those imposed on medical and surgical (M/S) benefits. More specifically, health insurers were forbidden from applying limitations such as prior authorizations, unreasonably high copays, or visit restrictions to mental health/substance use disorder treatments when medical/surgical treatments did not have such imposing constraints.

The 2008 law was hailed as a great advancement for the millions of Americans long struggling to afford adequate treatment for their respective mental health and substance use disorders. However, in the ensuing years, many insurers found ways to skirt around the legislation without incurring devastating financial ramifications; subsequently, this vulnerable segment of the population was deprived of many protections that the MHPAEA was ostensibly created to provide. Subsequently, in 2021 the Department of Labor (DOL) passed the Consolidated Appropriations Act, 2021 (CAA), which further required health plans to meticulously document their compliance with nonquantitative treatment limitation (NQTL) requirements under the MHPAEA by completing an NQTL comparative analysis. Essentially, health plans and issuers are required to prepare a comparative analysis of how NQTLs are applied to their respective MH/SUD benefits and M/S benefits to ensure parity. But even the DOL’s concerted efforts to enforce consistent standards earlier this decade were not deemed fully sufficient.

And so, this past New Year’s Day, new MHPAEA rules went into effect in order to bolster parity between MH/SUD and M/S benefits. For plan sponsors charged with guaranteeing that mental health parity is embedded into their plans, the bar has been raised. The stewards of health plans need to be even more mindful of working closely with their TPAs, PBMs, network administrators and other service providers to thoroughly execute NQTL comparative analysis reports that comply with the more stringent DOL standards that are now in place, some of which have already taken effect while others will not go into effect until January 1, 2026. Here are some specific considerations that would be prudent for plan sponsors to bear in mind throughout the balance of the year:

• Plans may need to broaden the scope of their mental health provider networks to make sure there is sufficient access for plan participants. The updated MHPAEA rules include prerequisites for the design and application of NQTLs pertaining to network composition standards (i.e., requirements for provider admission to a network.) Accordingly, plan sponsors will need to gather and assess data involving in-network and out-of-network utilization rates as well as network adequacy metrics and provider reimbursement rates so that their plans can evaluate how an NQTL impacts applicable patient outcomes related to access.

• Plans may be compelled to cover additional mental health services. Currently, the MHPAEA organizes benefits into six classifications: (1) emergency services; (2) in-network inpatient; (3) out-of-network inpatient; (4) in-network outpatient; (5) out-of-network outpatient; and (6) prescription drugs. However, the new MHPAEA rules have initiated a new “meaningful benefits” standard, which declares that if a plan offers any benefits for a mental health condition or substance use disorder in any of the aforementioned classifications of benefits, then it has to offer meaningful benefits for that mental health condition or substance use disorder in every classification in which medical/surgical benefits are offered. In essence, this means that a plan must provide coverage for the core treatments of each mental health condition or substance use disorder covered by the plan in each classification in which standard services for medical/surgical conditions are covered by the plan. This meaningful benefits standard will become effective for plan years beginning on or after January 1, 2026.

• Plans now have a shorter response turnaround time for delivering the NQTL analysis. For self-funded plans subject to ERISA, they are required to provide a copy of their NQTL comparative analysis to plan participants upon request within 30 days. The final rule codifies that plans subject to a DOL audit inquiry must respond within 10 business days. If the DOL decides that the initial response is inadequate, further information must also be provided within 10 business days of the DOL’s follow-up request; if the DOL makes an initial determination of there being noncompliance, the plan subsequently has 45 more days to address the findings; if the DOL ultimately makes a final determination of noncompliance, the plan has 7 business days to inform all participants of that determination. Employers must also post the final notice of noncompliance in their facility locations. Plans and their vendors in receipt of such a final notice will also be named in the annual MHPAEA Report to Congress. In sum, plan sponsors cannot wait to prepare an NQTL comparative analysis until a member or the DOL makes the request; they should already be working on this and develop a process for updating the analysis every time there is a material benefit design change.
   
• Finally, plan fiduciary certification is required, meaning that for ERISA plans, the named fiduciaries have to go over the NQTL comparative analysis and confirm in writing that they have undergone a thorough process to identify a qualified service provider to conduct the NQTL comparative analysis and prepare the subsequent written report. In more layperson terms, this means that plan sponsors have to select a plan fiduciary (or fiduciaries) to manage the process of searching for a vendor to conduct the NQTL comparative analysis as well as oversee said vendor’s work in preparing the analysis.

Though it remains to be seen whether some of the provisions of the new mental health parity rules such as the novel “meaningful benefits” standard and mandates for addressing “material differences” between a plan’s MH/SUD and M/S benefits will be challenged in court, plan sponsors will still need to conduct NQTL comparative analysis reports – and have those results readily available – for the foreseeable future. As such, it is paramount for plan sponsors who have not yet hired an NQTL comparative analysis report vendor to do so sooner rather than later.