On April 2, 2021, the Departments of Labor, Treasury and Health and Human Services (the Departments) jointly issued FAQs regarding the amendments to the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) made by the Consolidated Appropriations Act, 2021, enacted December 27, 2020 (CAA). The MHPAEA generally applies to group health plans and health insurance issuers that provide coverage for either mental health or substance use disorder benefits as well as medical/surgical benefits. The purpose of the MHPAEA is to ensure that plans and issuers treat mental health and substance abuse (MH/SUD) benefits the same as major medical benefits by not imposing restrictions on MH/SUD benefits that don’t apply to other benefits. The MHPAEA final regulations require that a methodology be imposed to analyze whether the non-quantitative treatment limitations (NQTLs) for MH/SUD benefits have parity with those imposed on major medical benefits.
The CAA requires plans and issuers to perform and document their comparative analyses of the design and application of NQTLs for MH/SUD and major medical benefits. Effective February 10, 2021 (45 days after enactment of the CAA), plans and issuers must make their comparative analyses available to the Departments upon request. The information provided must, in part, include the specific plan or coverage terms or other relevant information regarding the NQTLs and a description of all MH/SUD and major medical benefits to which each such term applies in each respective benefits classification and the factors used to determine the NQTLs that will apply to MH/SUD and major medical benefits. Additionally, plans and issuers must provide the Departments with written comparative analyses demonstrating parity between the NQTLs for MH/SUD and major medical benefits, including the processes, strategies, evidentiary standards, and other factors used in the analysis. The information obtained by the Departments may be shared with the states in which the plan or issuer conducts business.
The FAQs are written in an easy-to-read manner and simply confirm the information reflected in the CAA. FAQ 1 confirms that as of February 10, 2021, plans and issuers should be prepared to make the comparative analysis available to the Departments. FAQ 2 provides helpful information regarding the Department of Labor MHPAEA Compliance Tool (Compliance Tool) that can be used to determine whether the MH/SUD benefits have parity with major medical. FAQ 2 also provides detailed information regarding the required content of the written analysis, which we recommend be carefully reviewed in conjunction with FAQ 3 addressing the circumstances under which the comparative analysis may be deemed insufficient by the Departments. Importantly, FAQ 6 provides that participants and beneficiaries in ERISA-covered plans are entitled to comparative information on the medical necessity criteria for both major medical and MH/SUD benefits. FAQ 8 signals that the Departments’ request for comparative analyses may be based upon receipt of potential MHPAEA complaints and not based on random examinations.
As of February 10, 2021, the Departments are authorized to request comparative analyses on MH/SUD and major medical benefit parity. Plan sponsors are encouraged to use the Compliance Tool in order to identify any disparities between MH/SUD and major medical benefits and take preemptive corrective measures to address possible plan design and administrative issues. Additionally, steps should be taken to accommodate participant and beneficiary requests for the comparative analyses. In many cases, a third-party service provider to a group health plan may be delegated the responsibility to prepare the comparative analyses. Plan sponsors are encouraged to coordinate with their providers in this regard.
Compliance with the MHPAEA, as amended by the CAA, is important because the Departments may take enforcement action due to violations, which includes the imposition of costly penalties and possible monetary relief for participants and beneficiaries. In this regard, please review information regarding 2020 MHPAEA enforcement actions.
This information is general and is provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.