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Mental Health Parity and Addiction Equity Act (MHPAEA) Q&A

What is MHPAEA?

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally prohibits grandfathered and non-grandfathered group health plans that cover mental health and substance use disorder (MH/SUD) benefits from imposing limitations on these benefits that are less favorable than the limitations imposed on medical/surgical (M/S) benefits.

Are any plans exempt from MHPAEA?

Retiree only plans, self-insured non-federal governmental plans that have elected to exempt the plan from MPHAEA, and group health plans covering only excepted benefits are generally not subject to MHPAEA. In addition, self-funded plans sponsored by employers with fewer than 50 employees are exempt.

What is an NQTL?

Health plans generally impose two types of treatment limitations. “Quantitative” limitations (QTLs) are those that can be expressed as a number—of visits, of days, of doses. “Non-quantitative” limitations are not based on the number of times something happens, but still act to limit treatment under the plan. Below are a few examples of non-quantitative treatment limitations (NQTLs).

Why does my plan have to complete a Comparative Analysis of NQTLs?

In addition to many other transparency provisions, the Consolidated Appropriations Act of 2021 (CAA) imposed a new disclosure requirement on group health plans subject to federal mental health parity rules. Specifically, group health plans are required to make available to the Department of Labor (DOL), Health and Human Services (HHS) or the applicable State authority, upon request, an analysis comparing the application of NQTLs for MH/SUD benefits to those for M/S benefits.

What does a Comparative Analysis look like?

MHPAEA and CAA neither define “comparative analysis” nor provide instructions on how to document a comparative analysis. That said, the NQTL parity analysis involves a process that requires plans to:

• Inpatient, in-network;
• Inpatient, out-of-network;
• Outpatient, in-network (office visit and all other outpatient);
• Outpatient, out-of-network (office visit and all other outpatient);
• Emergency care; and
• Prescription drugs.

The analysis must state specific findings on what is and is not in compliance with parity rules. Comparative analyses are detailed, and lengthy documents based on top-to-bottom QTL and NQTL comparative analysis, claims denial analysis based on information from the carrier, third-party administrator (TPA) and/or pharmacy benefits manager (PBM), as well as a plan language review across all plan documents. Tri-agency guidance has emphasized that plans and insurers should be prepared to provide specific, detailed, and reasoned analyses with supporting documentation upon request and that a general statement of compliance, coupled with a conclusory reference to broadly stated processes, strategies, evidentiary standards, or other factors will be insufficient.

If my plan is fully-insured, can’t I rely on my group health carrier for this analysis?

Since the MHPAEA regulations apply to both self-funded and fully insured plans, the same process of a full and comprehensive Comparative Analysis is required for fully insured plans. To date, our experience is that while most carriers have undertaken some of that process, they have not done the kind of analysis that would be required by regulators. A Comparative Analysis is not just an analysis of how the plan is written, but also how they work in operation. Furthermore, the regulations themselves clearly state that the Plan Sponsor/employer is a responsible party in the comparative analysis process itself, regardless of funding type.

What about Rx benefits? Do I have to involve my pharmacy benefits manager (PBM) in this process?

An analysis of your Rx benefits formulary, utilization management, and claims history is a necessary part of a Comparative Analysis. If your Rx benefits are administered by a PBM, your PBM will need to provide data to complete the Comparative Analysis.

Who should complete this analysis?

As noted above, the Comparative Analysis is a plan obligation. While a carrier, TPA or PBM can provide much of the information necessary to undergo the analysis, many employers are finding that it is time and cost-effective to hire an experienced consultant to prepare the Comparative Analysis.

For those employers that do not wish to hire a consultant, the DOL has developed a MHPAEA Self-Compliance Tool and explained that this tool will help provide guidance and assistance with compliance. The DOL has indicated plans and issuers that have carefully applied it should be in a strong position to provide documentation considered to be adequate.

What has enforcement looked like?

The DOL’s Employee Benefits Security Administration (EBSA) actively enforces MHPAEA, and violations of MHPAEA are a frequent subject of lawsuits. 

The new law requires regulators to review MHPAEA compliance from a sample of group health plans every year, to require health plans to take corrective action when noncompliance is found, and to issue an annual report to Congress detailing the results of these reviews. The 2022 report to Congress contained the following findings on NQTLs:

Generally, we have been told that federal regulators allow employers a relatively short timeframe with which to respond to a request for the Comparative Analysis. An employer is typically given 30 days to comply, and could be granted an additional 30 days if a request is made for an extension. This is a tight timeline for completing a full Comparative Analysis, which typically takes eight weeks or more to produce. Additionally, employers that complete the Comparative Analysis ahead of an audit can proactively correct any issues identified.

What are the penalties for failing to comply with this requirement?

If federal regulators find that a plan is not in compliance with the MHPAEA, they must detail how they will bring the plan into compliance and submit additional analysis showing compliance within 45 days of failing. If the plan is unable to bring the plan into compliance, it will be given seven days to notify participants that coverage is non-compliant and federal regulators will report the plan to the state where the employer is located or licensed to do business. Failure to provide the Comparative Analysis is likely to trigger the $100 a day penalty per plan participant.

Is this an annual obligation?

Yes, the best practice is to complete an analysis annually, though the analysis in subsequent years (absent significant plan changes) should be less time-consuming.

When is this effective?

The CAA Comparative Analysis requirement went into effect on February 10, 2021. To date, compliance has been slow and incomplete. While group health carriers, ASO providers, and PBMs have provided some of the analysis required, producing a full Comparative Analysis is a complex and administratively burdensome process, one that relatively few employers have undertaken to date. However, we anticipate that enforcement efforts will increase in the coming years, and employers are well-served by completing at least an initial analysis now.

Where can I get more information on MHPAEA and NQTLs?

• CCIIO MHPAEA Fact Sheet
• EBSA FAQs
• EBSA Warning Signs on NQTLs
• 2022 MHPAEA Report to Congress

AP Keenan is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities, and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.