Federal Agencies Finalize Rules Governing Parity in Mental Health and Substance Abuse Coverage for Health Benefit Plans
Rob Thomas, Of Counsel
Enacted in 2008, the Mental Health Parity and Addiction Equity Act (“MHPAEA” or the “Act”) aims to put benefits offered by insurers and group health plans for the treatment of mental health and substance use disorders (“MH/SUD”) on an even playing field with benefits for other medical or surgical treatments by prohibiting plans and insurers from placing undue restrictions or limitations on MH/SUD benefits (both qualitative and quantitative), as compared to other medical or surgical benefits being offered. Now, in furtherance of this goal, the United States Departments of Labor, Health & Human Services, and the Treasury (“Departments”) released exhaustive final regulations on September 9, 2024 (the “Final Rules”), intended to further bring insurers and plans into compliance with the MHPAEA and to further close the gap between patient access to offered MH/SUD services and other medical/surgical services.[1]
The MHPAEA, Generally
Under the MHPAEA, and from a quantitative perspective, if a group health plan or health insurance policy offers MH/SUD benefits alongside other medical/surgical benefits, then the financial obligations or treatment limitations imposed on participants or beneficiaries for both benefit categories must be treated comparably—such as copayments for both types of treatments or restrictions on the number of covered visits for both types of treatments.
However, one of the MHPAEA’s most significant requirements relates to non-numerical, or nonquantitative, treatment limitations (NQTLs), and provides that covered group health plans and other health insurers may not implement NQTLs which have the effect of placing greater restrictions on access to MH/SUD benefits as compared to medical/surgical benefits. Examples of impermissible NQTLs on MH/SUD treatments include imposing greater coverage restrictions based on geographic location or facility type, imposing more restrictive standards as to medical necessity, requiring prior health plan approval before receiving care, or other similar restrictions which might not be present for more traditional medical or surgical benefits under a particular plan or policy.
The Departments’ Final Rules
The Departments’ Final Rules contain hundreds of pages of discussion and regulatory text, but one of the primary changes implemented by the Final Rules requires group health plans to prepare and make available an exhaustive comparative analysis detailing the design and application of NQTLs for MH/SUD benefits as compared to other offered medical/surgical benefits, to include: 1) a description of the NQTL; 2) identification and definition of the factors and evidentiary standards 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 the NQTL is written; 5) a demonstration of comparability and stringency in operation, supported by empirical data, explanations of any material differences in access, and a description of reasonable actions taken to address the differences; and 6) overall findings and conclusions. Such comparative analyses must be made available to the Department Secretaries within 10 business days, upon request.
The Final Rules also specify that if a plan provides any benefits for a MH/SUD condition in any benefits classification (emergency services, in-network inpatient, in-network outpatient, prescription drugs, etc.), then it must provide “meaningful” benefits for that condition or disorder in every classification in which “meaningful” medical/surgical benefits are provided. A benefit is “meaningful” if it provides coverage of a core treatment for that condition or disorder in each classification in which the plan provides benefits for a core treatment for comparable medical or surgical procedures. This “meaningful” standard is intended to address situations in which a plan or insurer might provide MH/SUD benefits with comparable NQTLs, but nonetheless exclude or restrict core treatments related to the MH/SUD condition at issue for a particular benefit classification.
Other notable requirements include the requirement for ERISA-covered plans to have their named fiduciaries (such as plan administrators who make benefit determinations) review the plans’ NQTL analyses and certify that they found the comparative analyses to be in compliance with the content requirements of the Final Rules. The Final Rules likewise prohibit plans and insurers from using discriminatory information, evidence, sources, or other standards that systematically disfavor or are otherwise designed to disfavor access to MH/SUD benefits as compared to other medical/surgical benefits when designing NQTLs.
Employer and Plan Considerations
The Final Rules are generally set to go into effect as of January 1, 2025 for plans with plan years commencing on or after that date, but the “meaningful benefits” standard, the prohibition on discriminatory factors and evidentiary standards, the relevant data evaluation requirements, and the guidance regarding the design and scope of the comparative analyses are set to go into effect on January 1, 2026 for plans with plan years commencing on or after that date. Nonetheless, the Final Rules will certainly require an exceptional amount of empirical analysis in order to ensure that MH/SUD benefits offered are on par with other medical/surgical benefits, and likewise may require plans to expand the scope of coverage of MH/SUD benefits to ensure parity. Such efforts may ultimately impact the cost of group health coverage for both employers and employees, but the effects of the Final Rules in this arena remain to be seen. Campbell Litigation remains available to assist with these and other ERISA plan-related questions
[1]See https://public-inspection.federalregister.gov/2024-20612.pdf for the full text of the Departments’ regulations.