Better Hide the Wine … Employer Considerations as the DOL Doubles Down on Mental Health Parity Compliance in New Proposed Regulations

/in , , , , , , ,

by Alex Smith

The Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of Treasury (collectively, the Departments) recently issued proposed Mental Health Parity and Addiction Equity Act (MHPAEA) regulations and their second joint report to Congress regarding their MHPAEA enforcement activities as required under the MHPAEA and the Consolidated Appropriations Act, 2021 (CAA).

In addition, the DOL issued Technical Release 2023-01P, requesting comments on potential data requirements related to non-quantitative treatment limitations (NQTLs) and network composition. The proposed regulations and Technical Release indicate that employers can expect increased compliance obligations related to NQTLs and the NQTL comparative analysis reporting and disclosure requirements established by the CAA. For additional information about the CAA’s MHPAEA NQTL comparative analysis reporting and disclosure requirements, please see our blog posts from 2022 and 2021.

If finalized in their current form, the new compliance obligations imposed by the Departments’ proposed regulations include:

  • Substantially revising the 2013 MHPAEA regulations to impose a 3-part test on NQTLs that are applied to mental health and substance use disorder (MH/SUD) benefits.
    • The 3-part test would (i) impose a “predominant/substantially all” test similar to what currently applies to quantitative treatment limitations and financial requirements to prohibit NQTLs from being more restrictive when applied to MH/SUD when compared to medical/surgical benefits, (ii) impose specific requirements related to the design and application of NQTLs, and (iii) require group health plans to collect, evaluate, and address relevant data on access to MH/SUD benefits as compared to medical/surgical benefits.
  • Emphasizing the importance of network adequacy as it relates to MH/SUD benefits.
    • In addition, the DOL’s Technical Release specifically focuses on data regarding network composition and the potential for group health plans to need to collect specific data related to NQTL network composition.
  • Requiring plans to cover benefits in all classifications for a specific MH/SUD if the plan covers benefits in one classification for the condition, as compared to benefits provided for medical/surgical benefits.
  • Indicating a focus on exclusions related to autism spectrum disorder, eating disorders, and opioid treatments.
  • Imposing specific content requirements on the NQTL comparative analysis as required under the CAA.
    • The Departments’ report to Congress indicated that most, if not all, of the NQTL comparative analyses that have been requested from employers on audit have been insufficient.
  • Requiring a plan fiduciary to certify that the plan’s NQTL comparative analyses were completed in accordance with the proposed regulations’ content requirements.
  • Requiring group health plans to provide their NQTL comparative analyses to a Department within 10 days of the Department’s request.
  • Requiring group health plans to provide their NQTL comparative analyses to participants within 30 days of a participant request.
  • The proposed regulations indicate they are intended to be applicable beginning with the first plan year starting on or after January 1, 2025.

Based on the proposed regulations, the DOL’s Technical Release, and the Departments’ report imposing significant new obligations and the reality that plan sponsors are not in a position to independently evaluate their plan’s NQTLs or prepare the NQTL comparative analyses, sponsors of self-insured plans may want to:

  • Confirm that their TPA will make the necessary changes to their plan’s NQTLs based on the potential heightened requirements once final regulations are issued.
  • Confirm that their TPA will retain and evaluate the necessary data regarding NQTLs and network adequacy once guidance is finalized.
  • Confirm that their TPA is preparing the required comparative analyses in a manner consistent with the proposed regulations.
  • Independently review any NQTL comparative analyses that have been or are prepared.
  • Negotiate contractual protection in the event the TPA’s NQTL comparative analyses are determined to be deficient or the TPA’s application of NQTLs is determined to be impermissible.