The Consolidated Appropriations Act of 2021 (CAA) was enacted on December 27, 2020. The CAA says that as of February 10, 2021, all fully-insured carriers and all employer plan sponsors subject to the MHPAEA must be prepared to perform and document comparative analyses of how every plan design they offer applies non-quantitative treatment limitations (NQTL) for mental health (MH)and substance use disorders (SUD). All applicable plans will need to be prepared to make this information available to Health and Human Services (HHS) and the Department of Labor (DOL) upon request.
Part of verifying parity is making sure that coverage conditions for MH/SUD benefits aren’t harder to meet than they are for other plan services. There are two types of conditions that plans must look out for:
Quantitative treatment limits (QTLs) and
Non-quantitative treatment limits (NQTLs).
QTLs are numbers-based and include things like cost-sharing requirements and treatment limits that can be counted (such as a limit on the number of covered visits to a specific kind of provider).
NQTLs are all the treatment limitations that cannot be tabulated, such as pre-authorization requirements, provider network limitations, formulary design, and medical necessity standards. Plans can't apply NTQLs for MH/SUD differently or more stringently than the NQTLs applied to medical/surgical benefits in the same classification.
Components of NQTL Comparative Analyses
A general statement of compliance, coupled with broadly stated processes, strategies, or other factors is insufficient to meet the statutory requirement. This written analysis must include the following items for each plan offered:
• The specific plan or coverage terms or other relevant terms regarding the NQTLs.
• A description of all mental health or substance use disorder and medical or surgical benefits in each respective benefits classification.
• The factors used to determine that the NQTLs will apply to mental health or substance use disorder benefits and medical or surgical benefits, and every factor shall be defined.
• The standards used for the factors identified when applicable, and any other source or evidence relied upon to design and apply the NQTLs to mental health or substance use disorder benefits and medical or surgical benefits.
• The comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to mental health or substance use disorder benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to medical or surgical benefits in the benefits classification.
• The specific findings and conclusions reached by the group health plan or health insurance issuer with respect to the health insurance coverage, including any results of the analyses described in this subparagraph that indicate that the plan or coverage is or is not in compliance with this section.
What to Expect Upon a Request for Information
If a group health plan sponsor or health insurance issuer receives a request to send the federal government their NQTL comparative analyses, they will need to do so within the timeframe the specified. If the information provided is insufficient to judge compliance, a request for more information will follow. If the DOL or HHS concludes that the issuer or group health plan is out-of-compliance, then the plan sponsor or issuer will have 45 days to fix their mistakes and provide a new comparative analysis.
If the federal departments review the new documentation and conclude that there are still compliance violations, within seven days of that determination, then the plan or issuer must notify all individuals enrolled in the plan or coverage that the coverage is determined to be noncompliant with MHPAEA. The Departments will also share findings of compliance and noncompliance with the State where the group health plan is located or where the issuer is licensed to do business.
The CAA requires that the DOL request a copy of a plan’s MHPAEA NQTL analysis when they suspect a parity violation, when a plan participant complains, or for any other reason they deem necessary. This is essentially the same criteria that the DOL uses now to trigger a group health plan audit. So, while the CAA does not specifically address DOL audits, it stands to reason that MHPAEA NQTL analyses will become an audit component moving forward.
Guidance is Expected
The CAA requires the DOL and HHS to prepare rules and sub-regulatory guidance within the next 18 months. These rules and related guidance must include updated resources for employers and insurers, such as examples and methodologies for them to use to guide their analyses. But employers that self-fund their coverage, and the third-party administrators and other vendors that help offer their employees’ health benefits, can’t afford to wait 18 months before acting.
Which Health Plans Need to Comply with the New CAA Requirements?
This new compliance requirement applies to all group health plan sponsors and individual and group health insurers that are subject to the MHPAEA. The MHPAEA applies to employers with more than 50 employees who offer group health coverage (including group Medicare Advantage coverage) and any related health insurance carriers. Self-funded health plans do not technically have to cover MH/SUDs. However, if they do, then MHPAEA applies. Fully insured plan must cover mental health benefits in order to comply with Affordable Care Act essential health benefit rule. So, all of these entities need to start performing NQTL parity analyses on their plan offerings as soon as possible.
However, the following plans are not subject to the MH/SUD parity provisions:
Retiree-only group health plans
Self-insured non-Federal governmental plans that have obtained a waiver and group health plans
Group or individual health insurance coverage offering only excepted benefits, (Note: if under an arrangement(s) to provide medical care benefits by an employer any participant or beneficiary can simultaneously receive coverage for medical/surgical benefits and MH/SUD benefits, the MH/SUD parity requirements apply separately with respect to each combination of medical/surgical benefits and MH/SUD benefits and all such combinations are considered to be a single group health plan.
Under ERISA, the MHPAEA requirements do not apply to employers who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.
MHPAEA also contains an increased cost exemption available to group health plans and issuers that meet the requirements for the exemption.
Who Is Responsible for Performing the NQTL Analyses?
Fully Insured Plans
When it comes to individual health insurance offerings, the health insurance carrier is the entity responsible for performing NQTL analyses on all health plan options that they offer. For groups, if the coverage is fully insured, both the health insurance issuer and the employer plan sponsor have compliance liability. So, businesses that offer fully insured medical coverage to employees need to check with their health insurance carrier annually to make sure their plans are compliant and request a copy of the NQTL analyses for all coverage options offered.
While self-insured plans do not have carrier assistance the plan’s third-party administrator (TPA) and other vendors may assist with the analysis, ultimately the business sponsoring the group plan (i.e., the employer) is the one with fiduciary and compliance responsibility concerning parity compliance. Thus, employers that offer self-funded or level-funded health insurance coverage should reach out to their TPA or administrative service organization to determine how they will complete the required NQTL analyses and ensure their plan meets MHPAEA standards.
Is There Any Help Available for Self-Insured Plans?
Employers can engage with a compliance vendor to help analyze a plan. Otherwise, there are some existing federal compliance resources available. Plus, the law directs HHS and DOL to develop more resources for insurers and plan sponsors over the next 18 months.
The DOL has a self-compliance assessment tool for employer group plans. This tool includes many NQTL compliance examples and red flags for plan sponsors, carriers, and third-party administrators to review, and is required to be updated by the DOL at least every two years. The DOL also maintains a parity website, which includes links to all federal guidance, FAQs, and the model disclosure form. The links are found at the bottom of this information.
Another resource for employer plan sponsors is an older MHPAEA compliance requirement. According to existing rules, all group plans need to be ready to disclose details about QTL and NQTL procedures to any plan participant that requests that information within 30 days. The DOL has a model form for employees to use to request this information. While the disclosure form is intended for employees to help them request the "right" information, plan sponsors can also use it in reverse as part of the comparative analysis process.
For details, visit:
DOL Self-Compliance Tool for the MHPAEA: compliance-assistance-guide-appendix-a-mhpaea.pdf (dol.gov)
DOL Parity Website: Mental Health and Substance Use Disorder Parity | U.S. Department of Labor (dol.gov)