Employee Benefits
Mental Health Parity Compliance: What Steps Should an Employer Take Next?
By Allison Bans
The Mental Health Parity and Addiction Equity Act (“MHPAEA”) and its implementing rules require group health plans to ensure that financial requirements (e.g., co-pays, deductibles, and coinsurance), quantitative treatment limitations (e.g., visit limits and day limits), and nonquantitative treatment limitations (“NQTLs”) (e.g., prior authorization requirements, step therapy, and standards related to network composition) that apply to mental health or substance use disorder (“MH/SUD”) benefits are no more restrictive than the predominant requirements or limitations that apply to substantially all medical/surgical (“M/S”) benefits. Additionally, effective February 10, 2021, group health plans that offer M/S benefits and MH/SUD benefits and impose NQTLs on the MH/SUD benefits must perform and document a comparative analysis of the design and application of the NQTLs (the “NQTL Analysis”).
Compliance with these rules is often overwhelming to the most compliant of employers. This is largely because the regulations are dense, the calculations to ensure parity are complex, and third-party administrators (“TPAs”) rarely provide a sufficient NQTL Analysis. Despite these challenges, employers should continue to work towards compliance and consider prioritizing the NQTL Analysis. The DOL Office of Inspector General, frustrated with years of noncompliance, is currently urging Congress to pass legislation to enhance the DOL’s enforcement authority (e.g., through civil penalties) and, until that happens, urging DOL to use other enforcement tools. Such tools include: (1) referring plans to the U.S. Treasury to levy excise taxes; (2) pursuing litigation through DOL’s Office of the Solicitor, and (3) performing audits under the 21st Century Cures Act.
Below are some plan design and plan administration issues employers may want to consider now:
| Litigation | Next Steps |
| Mental Health Conditions | Confirm that the plan treats eating disorders, autism spectrum disorder, and gender dysphoria as mental health conditions and that any limitations on such conditions comply with MHPAEA. |
| Plan Definitions | Review definitions of M/S benefits, mental health benefits, and SUD benefits. Confirm that these terms are “consistent with generally recognized independent standards of current medical practice,” which means that they should be consistent with the most current version of the International Classification of Diseases (“ICD”) or the Diagnostic and Statistical Manual of Mental Disorders (“DSM”). These terms should not rely on “State guidelines.” |
| Administrative Services Agreements | Confirm that administrative services agreement(s) with the plan’s TPA(s) requires the TPA(s) to help the plan timely and accurately respond to a government and/or participant request for an NQTL Analysis and make available to the government and/or named fiduciary a written list of all NQTLs imposed under the plan. |
| NQTL Comparative Analysis Requirements | Request the plan’s NQTL Analysis and ensure that it addresses all the plan’s current NQTLs and contains, at a minimum, the following six elements: 1. A description of the NQTL; 2. The identification and definition of the factors 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; and 6. Findings and conclusions. |
| NQTL Comparative Analysis – Fiduciary Certification (ERISA Plans) Effective first day of plan year beginning on or after January 1, 2025 | Confirm that one or more named fiduciaries certify in the NQTL Analysis that they have engaged in a prudent process to select service provider(s) to perform and document an NQTL Analysis and have monitored the service provider(s) as required under ERISA. At a minimum, DOL expects a plan fiduciary to review the NQTL Analysis, to ask questions about the NQTL Analysis and discuss it with service providers, as necessary, to understand the findings and conclusions, and to ensure that the service provider provides assurances that the NQTL Analysis complies with MHPAEA. |
