Group Health Plan Advisory: Mental Health Parity and Addiction Equity Act
Changes from the Consolidated Appropriations Act, 2021.
The Consolidated Appropriations Act, 2021 (CAA) included provisions affecting the Mental Health Parity and Addiction Equity Act (MHPAEA). The new provisions require group health plans to perform comparative analyses demonstrating compliance with the MHPAEA. Plans will now be required to provide these analyses to the Departments of Labor, Health and Human Services and the Treasury or applicable state authorities upon request.
While these new requirements are effective February 10, 2021, the CAA also requires the DOL and other agencies to provide regulations providing guidance on these analyses. Per the CAA, these regulations must be finalized within 18 months of the CAA’s enactment. The CAA was enacted on Dec. 27, 2020; therefore, employers can expect to see guidance provided no later than June 2022.
Plan sponsors using fully-insured plans will obtain these analyses from their medical insurance carriers. Plans sponsors with self-funded plans are responsible for providing the required analyses. Oswald will work with carriers and third-party administrators responsible for processing claims for Oswald clients using self-funded plans to prepare the analyses necessary to comply with the new regulations.
The MHPAEA subjects group health plans that provide medical/surgical benefits as well as mental health or substance use disorder benefits to three different mandates:
- Annual or Lifetime Limits – group health plans that apply annual or lifetime dollar limits for medical/surgical benefits must apply those same (or higher) dollar limits for mental health benefits and substance use disorder benefits.
- Parity Regarding Financial Requirements and Quantitative Treatment Limitations – parity must be provided between medical/surgical benefits and mental health or substance use disorder benefits regarding financial requirements such as deductibles, copayments, coinsurance and out-of-pocket maximums. Quantitative treatment limitations like the number of treatments, visits or days of coverage must also be provided with the same type of parity between the types of benefits.
- Parity Regarding Nonquantitative Treatment Limitations – parity must be provided between the types of benefits regarding nonquantitative treatment limitations (NQTLs). NQTLs include medical management standards limiting or excluding benefits based on medical necessity, formulary design for prescription drugs, standards for provider admission to participate in a network, plan methods for determining usual, customary and reasonable charges, fail-first policies or step-therapy protocols, exclusions based on failure to complete a course of treatment, network tier design, for plans with multiple network tiers and restrictions based on geographic location, facility type, provider specialty and other criteria that limit the scope of duration of benefits for services provided under a plan.
The government is aware plans have struggled with the parity provisions of the MHPAEA, especially those concerning NQTLs. The interim final regulations related to the MHPAEA were issued in February 2010. Since then, the DOL issued FAQs later in 2010, Warning Signs in 2016 and a self-compliance tool, in 2018 which was updated last year, all attempting to assist plan sponsors with compliance.
The CAA requires a five-part analysis of NQTLs. Specifically:
- Identification of the NQTLs
- Factors considered in the design of the NQTLs; examples cited include:
- Excessive utilization
- Recent cost escalation
- Lack of clinical efficiency
- Evidentiary standards and sources used to develop the factors; examples cited include:
- Internal claim analysis
- Medical expert reviews
- National accreditation standards
- A comparative analysis of the NQTLs as written and in operation
- Findings and conclusions establishing compliance
If after providing the required analysis to an agency making a request, the agency deems the analysis do not indicate compliance, the sponsor will have a 45-day correction period to propose actions and provide additional data to show compliance. If those efforts fail, the DOL will make a final determination of non-compliance. Further, the Act requires the DOL to identify non-compliant plans by name in the publicly available reports it annually makes to Congress.
Plan sponsors of fully-insured plans can rely on the carriers issuing those plans to ensure compliance with the regulations. Oswald personnel will work with these carriers to supply our clients using fully-insured plans the analysis documentation they need to fulfill the requirement.
Oswald directly contacted the carriers/third-party administrators serving our clients with self-insured plans to work with them to review the current plan documents containing reference to MHPAEA issues. Our goal is to assist them in preparing analyses that comply with the new regulations and get that documentation to our self-insured clients as soon as possible. We will continue to share any updates via Oswald Advisories.
Note: This communication is for informational purposes only. Although every reasonable effort is made to present current and accurate information, Oswald makes no guarantees of any kind and cannot be held liable for any outdated or incorrect information. View our communications policy.