On September 9, 2024, the Department of Health and Human Services (“HHS”), the Department of Labor (“DOL”) and the Department of Treasury (collectively “the Departments”) issued a final rule (“Final Rule”) that amends the requirements of the Mental Health Parity and Addiction Equity Act (“MHPAEA), particularly with respect to the documentation and implementation of nonquantitative treatment limitations (“NQTLs”). The Final Rule generally is effective for plan years beginning on or after January 1, 2025, though several requirements do not take effect until 2026, as described below.
As background, plans generally are not required to cover mental health and substance use disorder (“MH/SUD”) benefits. However, if the plan does provide coverage of MH/SUD benefits, MHPAEA generally prohibits the plan from imposing more stringent benefit limitations on MH/SUD benefits than on medical/surgical benefits in the same benefits classification. (The six benefits classifications are inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs.) In 2021, Congress enacted the Consolidated Appropriations Act (CAA), which requires group health plans to perform a comparative analysis of NQTLs to demonstrate compliance with MHPAEA. The Final Rule, while generally consistent with existing guidance on NQTLs as described in our August 8, 2023 Benefits Update, provides additional requirements for a plan’s NQTL comparative analysis and outlines the process the Departments will follow when reviewing a plan’s analysis. In addition, starting in 2026, the Final Rule imposes a “meaningful benefit” requirement that could affect the scope of coverage provided for MH/SUD conditions.
Requirements effective for plan years beginning on or after January 1, 2025
Named Fiduciary Requirement: A plan’s NQTL comparative analysis must include a certification that the plan fiduciary engaged in a prudent process to select qualified service providers to develop its comparative analysis, and the plan fiduciary must sufficiently monitor its service providers consistent with its fiduciary duties under ERISA. Alternatively, a plan fiduciary may provide a certification that the plan fiduciary itself has reviewed and determined that the comparative analysis is in compliance with the Final Rule.
Responding to NQTL Requests: In response to a request from DOL or HHS, a plan must provide its comparative analysis within ten business days. In response to a request from a participant, a plan must provide its comparative analysis within (30) days, and the plan is subject to penalties under ERISA if it fails to comply.
Non-Compliance Determinations: If DOL or HHS determines that a plan’s comparative analysis does not comply with the Final Rule, the plan must respond to DOL or HHS within 45 days with information regarding how it will correct any compliance issues and provide an updated comparative analysis that satisfies the Final Rule. If DOL or HHS makes a final determination of noncompliance, the plan must notify participants and any service provider involved in the claims process within seven calendar days, and the plan may be prohibited from applying the NQTL in question until the plan demonstrates compliance with the Final Rule, at the Departments’ discretion.
Requirements effective for plan years beginning on or after January 1, 2026
Meaningful Benefits: If a plan provides coverage for a particular MH/SUD condition, the plan must provide meaningful benefits for that MH/SUD condition in every classification in which medical/surgical benefits are covered. To provide meaningful benefits, a plan must cover at least one “core treatment” for an MH/SUD condition in each classification in which the plan provides benefits for a core treatment for any medical/surgical condition. A core treatment is defined as a standard treatment, therapy, or intervention under recognized standards of current medical practice. For example, the Departments advise that a plan that covers a full range of medical/surgical benefits on an outpatient, out-of-network basis but covers only developmental screening and not applied behavioral analysis (ABA) therapy for the treatment of autism would violate the Final Rule because ABA is considered a core treatment for the condition.
New Requirements for NQTL Comparative Analyses: The Final Rule generally follows the previously issued guidance on the content requirements of NQTL analyses and includes two additional requirements. With respect to the design and application of each NQTL affecting MH/SUD benefits, plans may not rely on any factors or evidentiary standards that are discriminatory or that systematically disfavor access to MH/SUD benefits. Plans also must collect and evaluate relevant “outcomes data” to assess how an NQTL affects access to MH/SUD benefits, and must take reasonable actions to address material differences in access, potentially including modifying their plan design or reimbursement structure.
Please contact Slevin & Hart for more information about how the Final Rule affects your plan.
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