Federal Departments Issue Final Mental Health Parity Rules

The federal government recently released final regulations related to the Mental Health Parity and Addiction Equity Act (MHPAEA).

The MHPAEA, one of the most misunderstood federal healthcare laws, prohibits “group health plans and health insurance issuers that provide mental health or substance use disorder benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical benefits.”

The MHPAEA is one of the most misunderstood federal healthcare laws.

Put more simply, if the plan offers mental health or substance use disorder benefits, those benefits must be equivalent to the medical/surgical benefits the plan offers. The final rules will be generally applicable to all group health plans on the first day of the first plan year beginning on or after January 1, 2025. However, certain standards related to the comparative analyses requirements will apply to plan years beginning on or after January 1, 2026.

What are the Final MHPAEA Regulations?

The Department of Labor, Health and Human Services, and the Treasury (the Departments) proposed regulations are meant to better ensure that people seeking coverage for mental health and substance use disorder care can access treatment as easily as people seeking coverage for medical treatment. The proposed regulations would:

• Make clear that MHPAEA requires that individuals be able to access their mental health and substance use disorder benefits in parity with medical/surgical benefits.
• Require plans and issuers to collect and evaluate outcomes data and take action to address material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, with a specific focus on ensuring that there are not any material differences in access as a result of the application of their network composition standards.
• Codify the requirement that plans and issuers conduct meaningful comparative analyses to measure the impact of non-quantitative treatment limitations (NQTLs). This includes evaluating standards related to network composition, out-of-network reimbursement rates, and prior authorization NQTLs.
• Prohibit health plans and issuers from using more restrictive NQTLs than the predominant NQTLs applied to substantially all medical and surgical benefits in the same classification.
• Implement the sunset provision for self-funded, non-Federal government plan elections to opt out of compliance with MHPAEA, adopted in the CAA, 2023. These sunset provisions provide that no opt-out election may be made on or after December 29, 2022, and no election expiring on or after June 27, 2023, may be renewed.

As a reminder, a nonqualified treatment limitation (NQTL) is, in its simplest terms, a limitation on benefits that cannot be expressed numerically. An example of an impermissible NQTL is a coverage guideline under which claims for inpatient mental health treatment are reviewed more harshly than the guidelines under which claims for inpatient medical treatment are reviewed.

To perform a proper NQTL comparative analysis, the plan or issuer may have to use information that isn’t readily available. For example, the Departments are concerned that participants more often use out-of-network providers for mental health and substance use disorders than when they seek medical or surgical benefits. Because out-of-network providers typically charge more for the benefit, a participant needing these services may be less likely to seek them.

Key Provisions for Health Plan Sponsors

The final rules require health plans and issuers to:

1. Define whether a condition or disorder is a mental health condition or substance use disorder in a manner consistent with the most current version of the International Classification of Diseases or Diagnostic and Statistical Manual of Mental Disorders.
2. Offer meaningful benefits, including core treatment, for each covered mental health condition or substance use disorder in every classification in which medical and surgical benefits are offered.
3. Not use evidentiary standards and factors to design NQTLs that discriminate against mental health conditions and substance use disorders.
4. Include specific elements in documented comparative analyses and make them available to the Departments, any applicable state authority, or individuals upon request.

ERISA plans must also include a certification that they have engaged in a prudent process and monitored their service providers according to their ERISA fiduciary duties.

Next Steps for Employers

Plan sponsors are encouraged to work with their carrier and/or third-party administrator (TPA) to ensure that participants’ access to mental health and substance use disorder treatment is in parity with their access to medical and surgical benefits. MHPAEA enforcement remains a focus of the Biden-Harris Administration. If you have questions about these final regulations, or any aspect of MHPAEA compliance, contact your OneDigital consultant.

For guidance on supporting the mental health and wellbeing of your workforce, check out this podcast episode: A Conversation Around Employee Engagement, Mental Health & Wellbeing.