Mental Health Parity and Addiction Equity Act (MHPAEA) regulatory requirements are among the most complex and technical of all regulatory mandates applicable to group health plans. At a high level, MHPAEA prohibits group health plans from imposing barriers on access to mental health or substance use disorder (MH/SUD) benefits that do not apply to medical and surgical (M/S) benefits.

As group health plan fiduciaries, employers and plan sponsors must be prepared to respond to participant and regulator requests for a copy of an up-to-date Non-Quantitative Treatment Limitation (NQTL) Comparative Analysis demonstrating that their Plans are compliant with the MHPAEA.

Background and New Regulation

Regulators continue to demonstrate their commitment to enforcement of these requirements, as highlighted by the following.

1. The NQTL Comparative Analysis requirement was enacted three years ago by the Consolidated Appropriations Act of 2021 (CAA 2021). Since then, Plans have been required to analyze and document their compliance with specified MHPAEA requirements and to provide a copy of this analysis to regulatory agencies upon request. CAA 2021 also required applicable regulatory agencies to investigate Plans for compliance with NQTLs and publish the names of non-compliant Plans in a report to Congress.
2. The Consolidated Appropriations Act of 2023 (CAA 2023) eliminated the MHPAEA exemption for self-insured non-Federal governmental Plans (e.g., Plans sponsored by state and local governments and school districts) – expanding the NQTL Comparative Analysis requirement to those Plans as well.
3. Most recently, on September 9, 2024, final regulations were released reflecting enforcement agencies’ interpretation of the CAA 2021 NQTL Comparative Analysis requirements. These regulations further complicate the required documentation and justification of NQTLs effective as early as January 1, 2025.

Goals of the NQTL Comparative Analysis Requirement

The stated goal of the recent final agency regulations was to enhance access to MH/SUD benefits in light of the ongoing MH/SUD crisis in the U.S. The following NQTLs were therefore identified as top enforcement priorities:

• Network adequacy (particularly provider network composition and credentialing standards, including how group health plans set provider reimbursement rates and efforts to monitor the adequacy of provider networks).
• Prior authorization requirements and other medical management techniques.
• Impermissible exclusions of key MH/SUD treatments.

The NQTL Comparative Analysis report required by the MHPAEA is not, however, limited to these enforcement priorities. Reports must also include an analysis confirming all other NQTLs applied by a Plan satisfy MHPAEA requirements. Examples of other NQTLs include prescription drug formulary designs; network tier designs; methods for determining out-of-network (OON) rates (such as allowed methods for determining usual, customary, and reasonable charge amounts and application of external benchmarks for OON rates); fail first policies or step therapy protocols; and restrictions based on geographic location, facility type, provider specialty, or other criteria that limit the scope or duration of Plan benefits.

In the first two years following the enactment of CAA 2021, the US Department of Labor (DOL) reportedly made extraordinary efforts to give group health plans opportunities to cure deficiencies in their NQTL Comparative Analysis reports. Recently, the DOL has indicated that it expects more complete NQTL Comparative Analyses from the start of its review process and may not be as generous as in prior years before issuing a final determination of non-compliance. Moreover, several court cases have been filed alleging MH/SUD coverage limitations violate MHPAEA.

Considerations for Employers and Plan Sponsors

To mitigate such regulatory and litigation exposure, employers and plan sponsors will need to ensure their MHPAEA compliance, as follows.

• Non-governmental Plans must continue to perform and document NQTL Comparative Analyses, as required since the CAA 2021 was enacted, and update those analyses to comply with final regulations.
• Self-funded non-federal governmental plans must begin to comply with all MHPAEA provisions.

This NQTL Comparative Analysis process is complex requiring the collection of detailed clinical data from group health plan vendors that establish and administer NQTLs, an associated analysis of that data (to demonstrate written compliance), testing of NQTL data (to demonstrate operational outcomes compliance) and the preparation of a report that comports with onerous content requirements. Moreover, employers and plan sponsors who sponsor ERISA covered plans (i.e., most group health plans other than those sponsored by churches or governmental entities) are now required to certify that they have engaged in a prudent process to select and monitor at least one qualified service provider to complete the required NQTL Comparative Analysis.

NQTL Comparative Analysis Timeline

The final regulations set forth important timeframes regarding the NQTL Comparative Analysis, including:

• After an initial request for comparative analysis from a federal regulator, the plan sponsor must submit the analysis within 10 business days (unless another period of time has been indicated).
• If the regulator determines the comparative analysis to be insufficient, requests for additional information must be fulfilled by the plan sponsor within 10 business days (unless another period of time has been requested).
• If the regulator makes an initial determination of noncompliance, the plan sponsor has 45 calendar days to specify the actions it will take to comply and provide additional comparative analyses and seven business days to notify all plan participants, beneficiaries, and enrollees of the determination.

The final rules generally apply to group health plans and group health insurance coverage on the first day of the first plan year beginning on or after January 1, 2025.

Next Steps

Employers and plan sponsors must take steps now to ensure compliance and prepare to respond quickly to requests from federal regulators or plan participants regarding NQTL Comparative Analysis.

Bolton has the expertise employers and plan sponsors can rely upon to assist with the NQTL Comparative Analysis process. We encourage you to talk with your Bolton consultant or visit boltonusa.com for more information on how we can help.