The Mental Health Parity and Addiction Equity Act and its implementing regulations and guidance (MHPAEA) prohibit health insurance policies and group health plans that cover mental health and substance use disorder (MH/SUD) benefits from imposing limitations on MH/SUD benefits that are less favorable than the limitations imposed on medical/surgical benefits. As we have written about previously, the Consolidated Appropriations Act, 2021 (CAA) added a requirement for health plans to document their compliance with nonquantitative treatment limitation (NQTL) requirements under the MHPAEA by completing an NQTL analysis. This is an area of Department of Labor (DOL) enforcement priority. You can find more information on NQTLs, as well as a discussion of the DOL’s focus on this area, in Foley’s prior articles located here and here.

Last year, the DOL, Department of Health and Human Services, and the Department of the Treasury (“the Departments”) published proposed rules (described here) which provided additional direction and guidance related to the NQTL analysis and MHPAEA compliance in general. After a good amount of time and a lot of fanfare, on September 9th, the Departments published final MHPAEA regulations (Final Rule). For a summary of the Final Rule, you can view the Departments’ fact sheet here.

Some portions of the Final Rule will take effect as soon as January 1, 2025, so plan sponsors need to begin implementing compliance efforts now. This article highlights five changes for plan sponsors under the Final Rule and the key takeaways from those changes.

1. The NQTL Analysis Has Gotten More Complex

As shown in the chart below, the Final Rule expands the NQTL analysis beyond the CAA requirements, and describes specific types of information that must be included in each element of the analysis, with the fifth element in particular requiring plan-specific, detailed analysis.

The takeaway for plan sponsors is that the bar for an NQTL analysis has been raised. The Departments have defined specific data points to be considered in the analysis, which are generally outside of the hands of plan sponsors. More than ever, plan sponsors will need to work with their TPAs, network administrators, PBMs and other service providers to complete an NQTL analysis that will meet DOL standards. Most of these changes take effect for plan years beginning on or after January 1, 2025, though some portions will take effect for plan years beginning on or after January 1, 2026.

2. Plans May Need to Expand Their Mental Health Provider Networks

The Final Rule includes requirements for the design and application of NQTLs related to network composition standards, such as requirements for provider admission to a network. This may include, but is not limited to, collecting and reviewing data related to in-network and out-of-network utilization rates, network adequacy metrics and provider reimbursement rates. The goal of this requirement is for plans to conduct an assessment of the impact of an NQTL on relevant patient outcomes related to access. Plans are expected to take reasonable action, as necessary, to address any material differences in access and to document any actions taken to mitigate the material differences.

The takeaway for plan sponsors is that your plan may need to expand its network or take other actions (like ensuring your TPA verifies an adequate network for your plans) to ensure adequate access to mental health providers for members. If in conducting an NQTL analysis, the data reveals a disparity in access between mental health or substance use disorder providers and medical or surgical providers, your plan might be viewed as violating the MHPAEA. The Departments indicate that contracting with additional mental health providers, expanding the availability of telehealth arrangements and providing outreach and assistance programs to connect patients with available providers are all possible mitigation options. These data collection and mitigation requirements generally take effect for plan years beginning on or after January 1, 2026.

3. Plans May Need To Cover Additional Mental Health Services

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. The Final Rule imposes a new “meaningful benefits” standard, which requires that if a plan provides any benefits for a mental health condition or substance use disorder in any classification of benefits, it must provide meaningful benefits for that mental health condition or substance use disorder in every classification in which medical/surgical benefits are provided. A plan does not provide meaningful benefits unless it also provides benefits for a core treatment for the mental health condition or substance use disorder in each classification in which the plan provides benefits for a core treatment for one or more medical conditions or surgical procedures.

In other words, a plan must provide standard, core services for each mental health condition or substance use disorder covered by the plan in each classification in which standard, core services for medical conditions covered by the plan are provided. A plan cannot provide comparable, meaningful benefits by making ancillary or non-standard mental health services available under a classification, if fulsome services for medical conditions are available under that classification. However, if a plan does not provide, for example, core treatments on the medical/surgical side in the out-of-network outpatient classification, it would not be required to provide core treatments on the MH/SUD side in that classification.

The takeaway for plan sponsors is that your plan may need to expand the scope of covered mental health and substance use disorder services or to start covering services in additional classifications to ensure parity. If your plan covers core treatments in a classification for medical/surgical benefits, you will need to cover core treatments for those mental health conditions and substance use disorders covered by the plan in the same classification. The meaningful benefits standard takes effect for plan years beginning on or after January 1, 2026.

4. Plans Have a Tight Response Timeframe for Providing the NQTL Analysis

The Final Rule requires plans to provide a copy of their NQTL analysis to the DOL and to plan participants upon request, and to take certain follow-up actions depending on DOL findings. Under the final rule, the following response deadlines apply:

• Upon participant request, 30 days.
• Upon DOL initial request, 10 business days.
• If DOL determines the initial response is insufficient, additional information must be provided within 10 business days of the DOL’s follow-up request.
• If the DOL makes an initial determination of noncompliance, then the plan has 45 additional days to address the findings; and
• If the DOL makes a final determination of noncompliance, then the plan has seven business days to notify all individuals covered under the plan of that finding.

The takeaway for plan sponsors is that you cannot wait to prepare an NQTL analysis until a participant or the DOL asks. Plan sponsors should be working on this now, and start building a process to update their analysis each time they have a material benefit design change.

5. Plan Fiduciary Certification is Required

For plans that are ERISA covered plans (generally, all group health plans other than those sponsored by churches or governmental entities), the plan’s named fiduciaries must review the NQTL analysis and certify in writing that they engaged in a prudent process to select one or more qualified service providers to conduct the NQTL analysis and prepare the written report on that analysis and satisfied their duty to monitor the service provider(s).

The takeaway for plan sponsors is that you will need to identify a named plan fiduciary or fiduciaries (including, for example, a plan fiduciary committee) that will oversee the process of selecting a vendor to conduct the NQTL analysis as well as the selected vendor’s work in preparing the analysis.

What Next?

There is already talk of lawsuits challenging the scope of the Final Rule, and in particular, the new “meaningful benefits” standard and requirements that address “material differences” between a plan’s MH/SUD and medical/surgical benefits. However, the NQTL analysis requirement is contained in a statute added by the CAA, which means that while a court may strike down some portion of the Final Rule or require the Departments to go back to the drawing board, plan sponsors are required to conduct an NQTL analysis and have the results of that analysis available on demand.

While there is still more to come in this area, including an updated MHPAEA Compliance Tool from the Departments and some expected additional guidance, as well as the outcome of the likely litigation over the Final Rule, we urge those plan sponsors who have yet to engage a service provider to conduct an NQTL analysis for the plan to start that process by talking to your plan’s TPAs. There are some pieces of compliance that you may choose to hold off on – specifically the new network adequacy and meaningful benefits given that they are not effective until January 1, 2026 and likely to be the subject of litigation) – but the NQTL analysis is a statutory requirement enacted under the CAA and for better or for worse, that requirement is not going away (unless by act of Congress).