The Departments of Labor (DOL), Health and Human Services (HHS), and Treasury aim to codify compliance and ensure equitable access to mental health and substance use disorder (MH/SUD) benefits, reinforcing the importance of mental health parity compliance.

These proposed changes impact all group health plan sponsors. Today, fully insured plans are waiting on their carriers to act.

Self-funded health plan sponsors, on the other hand, need to be prepared, not yesterday but nearly 4 years ago. Not aware yet? That’s okay, COVID was a crazy time.

Back in December 2020, the Consolidated Appropriations Act of 2021 enabled the above agencies to require health plan sponsors to complete a Non-Quantitative Treatment Limit (NQTL) analysis, attesting that their health plan(s) are following Mental Health Parity and Addiction Equity Act (MHPAEA) NQTL standards, a crucial aspect of mental health parity compliance.

To ensure compliance with MHPAEA, it’s important to understand what constitutes an NQTL. These limits are not numeric but can affect the scope and duration of treatment. Examples include:

• Criteria for Medical Necessity: How the plan determines if treatment is necessary.
• Prior Authorization: Requirements for pre-approval of care.
• Coverage Limitations: Restrictions based on treatment type or distance to provider.
• Coverage Availability: Does the network provide parity in mental health care access?

When performing an NQTL comparative analysis to meet the DOL’s requirements and to ensure mental health parity compliance, it’s advisable to consult with experts. This complex process requires examining all vendors involved in your plan, not just the Third-Party Administrator (TPA). This includes the TPA, Pharmacy Benefit Managers, networks, utilization review vendors, and any other entities that could affect treatment limits for mental health and substance use benefits.

This analysis must be available to plan members upon request starting on February 10th, 2021, in accordance with Department of Labor regulations, further highlighting the need for mental health parity compliance.

Overview of the Updated Guidance

In July 2023, the DOL, HHS, and Treasury published a comprehensive package of guidance designed to reinforce the fundamental goal of MHPAEA: ensuring that families have equal access to MH/SUD benefits compared to medical/surgical (M/S) benefits. The new guidance introduces several critical changes:

Proposed Rules: (September 2023)

• NQTL Comparative Analysis must be provided within 10 days of request by a governing authority.
• 45 days to rectify after an initial determination of NQTL non-compliance (not that you didn’t complete the analysis, but that your plan is out of compliance with standards).
• Failure to comply within 45 days and the DOL will force a group health plan to notify all vendors and participants of their violation with 7 days.

“The requirements under Code section 9812(a)(8), ERISA section 712(a)(8), and PHS Act section 2726(a)(8) and these proposed rules to perform and document comparative analyses of the design and application of NQTLs are essential components of a plan’s or issuer’s legal obligation to ensure mental health parity compliance with MHPAEA. Plans and issuers should work with their service providers to ensure that they have performed and documented comparative analyses for their NQTLs as required by MHPAEA, as amended by the CAA, 2021, regardless of the timing of any request by the Departments, applicable State authorities, or participants and beneficiaries.” – DOL Guidance (Proposed Rules)

Technical Release: (July 2023) Outlines principles for data submissions related to network composition and potential enforcement safe harbors.

Enforcement Report: (July 2023) Details efforts to achieve compliance and work with plan sponsors to ensure mental health parity compliance.

These updates aim to eliminate barriers to accessing mental health care and enhance transparency and consistency in benefit administration. They may, however, pose some burden on self-funded health plans, especially if you are prone to making vendor changes, but they are essential for mental health parity compliance.

Compliance Challenges and Observations

The DOL has recognized several challenges faced by health plans in meeting these requirements for mental health parity compliance.

The 2023 Enforcement Report by the Employee Benefits Security Administration (EBSA) highlights progress in addressing non-compliant NQTLs:

• Revisions and Removals: Plans have been motivated to correct violations due to follow-up requests and enforcement actions.
• Service Provider Engagement: EBSA has worked directly with service providers to remove impermissible exclusions.

Self-insured plans often struggle to obtain the necessary comparative analyses from TPAs. Frequently, opaque network contracts or poorly structured plan documents are the culprit, creating hurdles in mental health parity compliance.

“We’re really hopeful that interested parties—like plan sponsors, insurers, advocates for participants—that everybody is taking a very close look at the proposed rules and the report to Congress and comes back to us with comments on what they think works, what doesn’t work, and how it can be improved. We’re hopeful that we’re going to get a lot of helpful feedback so that we can move forward with a final rule.” – Lisa Gomez, Assistant Secretary of Labor

As a self-funded employer, you essentially have four options to proactively complete your NQTL comparative analysis for mental health parity compliance:

1. Your TPA – Some offer this service, some are price competitive, many are not.
2. Your Broker – This pushes the bounds of what most brokers should be doing. Ill-advised in my opinion unless they’ve built a killer internal solution I haven’t seen yet.
3. DIY – Not many will opt for this alternative, although you will certainly learn a TON in the process.
4. Hire a Vendor – Quick, relatively easy, and “affordable” when you realize the hours you may otherwise need to commit.

“Despite the fact that none of the comparative analyses submitted by plans or issuers during the Reporting Period were initially sufficient to satisfy provisions of MHPAEA added by the CAA, 2021, follow-up requests, continued conversations, insufficiency letters, and the possibility of being named as non-compliant in this report eventually incentivized a significant proportion of plans, plan sponsors, and issuers to correct MHPAEA violations.” – EBSA Report submitted to Congress

Completing an NQTL Analysis (DIY)

Understanding and documenting the elements of your NQTL analysis accurately is essential for proving mental health parity compliance. Unfortunately, doing so alone is no easy task.

The DOL provides a 6 Step Process in their comprehensive The “Six-Step” Parity Compliance Guide for Non-Quantitative Treatment Limitation (NQTL) Requirements (2021) – note that these guidelines may be revised based on the 2023 Technical Release and final Proposed Rules:

Practical Steps for Employers

To navigate these changes effectively and ensure mental health parity compliance, employers should take the following actions:

1. Collaborate with Partners: Work closely with your benefit consultant to identify a solution provider or set of providers to help you get started.
2. Review/Perform NQTL Comparative Analyses: Ensure that analyses are complete and align with the new rules. Sample Example of a Sufficient NQTL Comparative Analysis.
3. Update Documentation: Always be prepared to furnish your comparative analysis within the specified timeframe if requested by the DOL’s EBSA teams.
4. Be Proactive: Don’t wait for the request. It’s likely you’ll need to attest you have this on file soon, and the DOL won’t want to wait 60+ days while you work to complete it if they come knocking.

Staying informed and being proactive will be key to navigating these requirements and ensuring mental health parity compliance successfully.

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