/>iLast week, the Departments of Labor, Treasury, and Health and Human Services finalized regulations implementing the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Although the final regulations step back from certain burdensome aspects of the proposed rules (which we blogged about here), compliance with the final rules will require action from virtually all group health plans that cover mental health and substance use disorder (MH/SUD) benefits before the end of the year.
How did we get here?
MHPAEA requires that group health plans that provide MH/SUD benefits cover them in parity with medical and surgical benefits. Evaluation of whether benefits are in parity is performed for each classification of benefits under the plan, and this analysis requires evaluating: (1) financial and other quantitative treatment limitations, and (2) non-quantitative treatment limitations (NQTLs). At the end of 2020, Congress added a requirement that group health plans document their comparative analyses for NQTLs applied to MH/SUD benefits and make the comparative analyses available upon request to regulators.
What are the significant changes in the final MHPAEA regulations compared to the current regulations?
| Summary | Effective Date | |
| New plan fiduciary certification | For plans subject to ERISA, plan fiduciary must certify in comparative analyses of NQTLs that fiduciary engaged in prudent process to select a qualified service provider to perform and document the comparative analyses and monitored the service provider’s performance and documentation of the comparative analyses
Note: The final regulation steps back from the proposed rule, which would have required that a plan fiduciary certify that the comparative analyses of NQTLs complied with MHPAEA |
Plan years starting on or after 1/1/25 |
| New required comparative analyses content | Group health plan is required to prepare and make available comparative analyses detailing the design and application of NQTLs for MH/SUD benefits covered by the plan, including six minimum content elements; while details regarding many of these required elements were included in prior subregulatory guidance, the required inclusion of outcomes data and plan fiduciary certification is a significant change from the current requirements:
– Description of each applicable NQTL and benefits to which it applies – Description of how factors are used in the design and application of each NQTL – Demonstration that NQTL, as written, for MH/SUD benefits is comparable to and applied no more stringently than for medical/surgical benefits – Demonstration that NQTL, in operation, for MH/SUD benefits is comparable to and applied no more stringently than for medical/surgical benefits—including showing the required data was collected, evaluated, and “material” differences were addressed. Note: There is uncertainty about how this element will apply because neither “material” differences nor reasonable steps to sufficiently address such differences are defined in the final rule; yet, material differences will be considered a “strong” indicator of noncompliance* – Findings and conclusions, identification of all individuals involved in preparing the comparative analyses, and plan fiduciary certification (summarized above) |
Plan years starting on or after 1/1/25; *enforcement date for content elements related to outcomes data delayed until plan years starting on or after 1/1/26 |
| Revised definitions of MH/SUD and medical/surgical conditions | For plan definitions of MH/SUD conditions to be considered consistent with generally recognized independent standards of current medical practice (and permitted by MHPAEA), definitions must be consistent with most current version of World Health Organization’s International Classification of Diseases (ICD) adopted by HHS and/or the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM) | Plan years starting on or after 1/1/25 |
| New “meaningful benefits” standard | Group health plan that offers any benefits for MH/SUD condition in any classification must provide meaningful benefits for that MH/SUD condition in every classification that medical/surgical benefits are provided | Plan years starting on or after 1/1/26 |
| Revised standards for NQTLs | Group health plan cannot impose any NQTL with respect to MH/SUD benefits in any classification that is more restrictive, as written or in operation, than predominant NQTL that applies to substantially all medical/surgical benefits in the same classification; NQTL is considered more restrictive if plan fails to meet “design and application” and “data evaluation” prongs with respect to the NQTL:
– Design and application: Cannot apply an NQTL to MH/SUD benefits unless the processes, strategies, evidentiary standards, or other factors used to design and apply the NQTL are comparable to and applied no more stringently than those used to design and apply the limit to medical/surgical benefits in the same classification—with a ban on relying on “discriminatory” factors and evidentiary standards – Data evaluation: Group health plan must collect relevant data designed to assess the impact of the NQTL on access to MH/SUD benefits as compared to medical/surgical benefits; if data reveals material differences with respect to NQTL likely to have a negative impact on access to MH/SUD benefits, plan is required to take reasonable actions to address the differences and document those actions Note: The proposed regulations would have applied the substantially all/predominant mathematical test to NQTLs, as we blogged about here; however, this mathematical test was not included in the final rule |
Plan years starting on or after 1/1/26 (before that date, current regulatory standards for NQTLs apply) |
What are the implications of the final regulations for network composition?
The Departments have remained focused on NQTLs related to network composition (e.g., provider and facility network admission standards, credentialing standards, and reimbursement rate methodology) throughout this rulemaking process. The final regulations do not include the proposal that outcomes data for NQTLs related to network composition showing material differences in access would automatically be deemed to violate MHPAEA. However, the final regulations make clear that plan sponsors are expected to take significant steps to address such material differences, including by: (1) strengthening efforts to recruit mental health providers to a network (such as by increasing provider reimbursement rates); (2) expanding telehealth availability; (3) providing outreach to participants to help them find in-network providers; and (4) ensuring provider directories are up to date.
As plan sponsors might surmise, compliance with this part of the final regulations may prove to be somewhat of a moving target and will likely require significant plan sponsor investment to ensure compliance. Although the Departments had issued a proposed safe harbor regarding NQTLs for network composition, that safe harbor was not finalized as part of the final regulations, and the Departments have indicated they are still reviewing the comments they received in response to the proposal.
Timing takeaways for group health plan sponsors?
Since the final rules were released last week, several advocacy groups have indicated they are weighing the possibility of filing a lawsuit to set aside certain portions of the final rule on the basis it exceeds the regulatory authority of the Departments (in particular, the new “meaningful benefits” standard and outcomes data requirements, which would be effective starting in 2026). It’s hard to predict the outcome and speed at which such litigation might proceed, and whether the court’s decision would impact any portions of the rule set to take effect in 2025. For that reason, some plan sponsors may choose to focus on compliance deadlines with a 2025 effective date for now (which is plenty to address on its own), and adopt a wait-and-see approach on the new requirements slated for 2026 until the outcome of any potential litigation becomes clearer.
