The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) mandates that group health plans and health insurance issuers that offer mental health or substance use disorder (MH/SUD) benefits must provide such benefits in parity with medical and surgical (M/S) benefits. To advance this objective, MHPAEA prohibits group health plans and health insurance issuers from imposing financial requirements or treatment limitations, including non-quantitative treatment limitations (NQTLs), that are stricter for MH/SUD benefits than for M/S benefits. On September 9, 2024, the final rules amending MHPAEA were released. This article provides an overview of new obligations and penalties for noncompliance under the final rules that plan sponsors will face beginning in 2025.

Comparative Analysis Must Measure NQTL Effects as Written and in Operation

Group health plans and issuers offering plans that cover both M/S and MH/SUD benefits and impose NQTLs on MH/SUD benefits must prepare comparative analyses showing that the factors used to apply an NQTL to MH/SUD benefits are comparable to and applied no more stringently than the factors used to apply that same NQTL to M/S benefits. These analyses have been required since 2022 under the Consolidated Appropriations Act of 2021. However, effective next year under the final rules, certain requirements that apply to the analyses have changed. These analyses must measure the effect of NQTLs on the plan — both as written and in operation.

New Required Comparative Analysis Content

The final rules specify that the comparative analyses of each NQTL must include the following six content elements:

1. A description of the NQTL;
2. Identification and definition of the factors and evidentiary standards used to design or apply the NQTL;
3. A description of how factors are used in the design or application of the NQTL;
4. A demonstration of comparability and stringency, as written;
5. A demonstration of comparability and stringency, in operation, including the required data, evaluation of that data, explanation of any material differences in access, and a description of reasonable actions taken to address such differences; and
6. Findings and conclusion, including a fiduciary certification (as described below).

Although details regarding many of these content elements were included in prior subregulatory guidance, the required inclusion of outcomes data and the plan fiduciary certification requirement are significant changes from the current requirements. These changes are generally effective for plan years starting on or after January 1, 2025; however, enforcement for content elements related to outcomes data has been delayed until plan years starting on or after January 1, 2026.

New Plan Fiduciary Certification

As mentioned above, the final rules require that the plan fiduciary of any plan subject to MHPAEA certify in the comparative analysis that the plan fiduciary (1) engaged in a prudent process to select at least one qualified service provider to complete the comparative analyses and (2) has satisfied the fiduciary duty to monitor the service providers. This requirement in the final rules is a regression from the proposed rule, which would have required that a plan fiduciary certify that the comparative analysis complied with MHPAEA.

Short Timeline for Providing Comparative Analyses

The final rules solidified the requirement for plans and issuers to promptly provide comparative analyses to certain parties upon request. Plan participants and beneficiaries may request a copy of a plan’s comparative analysis after receiving an adverse benefit determination relating to MH/SUD benefits or at any time in accordance with ERISA §104. For such requests, the analysis generally must be provided within 30 days of a written request.

Importantly, plans and issuers must provide their comparative analysis to regulators within 10 business days upon request. If regulators make an initial determination of noncompliance, the plan or issuer only has 45 calendar days to respond with specific actions it will take to bring the plan into compliance and provide additional comparative analyses that demonstrate compliance. If regulators make a final determination of noncompliance, notice of noncompliance must be given to all participants, beneficiaries, and enrollees within seven business days after the determination.

New Definitions Effective in 2025

The final rules added new definitions for the following terms:

• Evidentiary standards: Any evidence, sources, or standards that a plan or issuer considered or relied upon in designing or applying a factor with respect to an NQTL
• Factors: All information, including processes and strategies (but not evidentiary standards), that a plan or issuer considered or relied upon to design an NQTL or to determine whether or how the NQTL applies to benefits under the plan or coverage
• Processes: Actions, steps, or procedures that a plan or issuer uses to apply an NQTL
• Strategies: Practices, methods, or internal metrics that a plan or issuer considers, reviews, or uses to design an NQTL

Additionally, the final rules revised the definitions of “Medical/Surgical Benefits,” “Mental Health Benefits,” and “Substance Use Disorder Benefits” by removing references to state guidelines. In practice, a plan can no longer refer to state insurance requirements to justify any limitation in its benefit offerings.

Conclusion

Going into the new year, plan sponsors who have previously performed comparative analyses should assess whether their comparative analyses meet the MHPAEA requirements that will become effective in 2025. For those plan sponsors who have not yet engaged a third party to perform such comparative analyses, now is very much the time to take such action. In addition to ensuring that they are able to provide an adequate comparative analysis promptly upon request, plan sponsors should also develop a process so that they can quickly address any material changes to benefit design in the future.