On April 2, 2021, the Departments of Labor, Health and Human Services, and Treasury (Departments) released FAQs on the new mental health parity comparative analysis requirement passed under the Consolidated Appropriations Act of 2021 (CAA). The CAA requires plans and issuers perform an analysis that documents compliance with the non-quantitative treatment limitation provisions of the Mental Health Parity and Addiction Equity Act of 2008. Further, the CAA requires plans and issuers to provide this analysis to plan participants, the Departments, or relevant state agencies, upon request.

Compliance Snapshot

  • As of February 10, 2021, plans and issuers must provide a comparative analysis if requested by plan participants, the Departments, or relevant state agencies.
  • Employers may want to check with their carrier (if fully insured) or third party administrator (if self-insured/level funded) to determine what steps are being taken to comply with the new requirements and to request a copy of the latest comparative analysis conducted (if any).
  • If a comparative analysis is requested, employers should work with their insurance carrier (if fully insured) or third-party administrator (if self-insured/level funded) to produce the analysis and relevant documentation.

Background

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prohibits plans from imposing higher financial requirements (such as insurance and copays) or stricter treatment limitations (such as visit limits) on mental health and substance use disorder (MH/SUD) benefits as compared to medical/surgical benefits. As such, plans and issuers can only impose non-quantitative treatment limitations (NQTLs) on MH/SUD benefits if the processes, strategies, evidentiary standards, or other factors used for applying such NQTLs are comparable to those used for medical/surgical benefits.

The Department of Labor (DOL) maintains a MHPAEA Self-Compliance Tool that can be used by plan sponsors and issuers to determine whether a plan complies with MHPAEA. Among other guidance, the MHPAEA Self-Compliance Tool outlines a process for analyzing whether a particular NQTL meets the MHPAEA requirements.

On December 27, 2020, the CAA was passed, which amended the MHPAEA to expressly require group health plans that offered MH/SUD benefits to perform and document a comparative analysis on the design and application of NQTLs on MH/SUD benefits. As of February 10, 2021, plans and issuers must make this comparative analysis available to plan participants and applicable federal or state agencies upon request.

Frequently Asked Questions

  1. How is the CAA NQTL comparative analysis requirement different from previous MHPAEA requirements?
    The CAA now explicitly requires plans and issuers to conduct and document a NQTL comparative analysis and provide that analysis upon request. Prior to the CAA amendment, MHPAEA required plans and issuers “to comply” with NQTL requirements but plans were not specifically required to perform a comparative analysis.
  2. Which plans are subject to the NQTL comparative analysis requirement?
    Plans that offer MH/SUD benefits and impose NQTLs on those benefits must complete and document the comparative analysis.
  3. What is a non-quantitative treatment limitation (NQTL)?
    A NQTL is generally a limitation on the scope or duration of benefits for treatment. NQTLs include, but are not limited, to the following:
    1. Medical management standards limiting or excluding benefits for medical necessity;
    2. Prior authorization requirements;
    3. Plan or issuer methods for determining usual, customary, and reasonable charges;
    4. Restrictions on applicable provider billing codes;
    5. Standards for accessing out-of-network providers;
    6. Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective.
  4. How can plans conduct the NQTL comparative analysis?
    The Departments point out that the information gathered when using the DOL MHPAEA Self-Compliance Tool’s process for determining NQTL compliance closely aligns with the information that must be included in the CAA comparative analysis. Therefore, plans and issuers that use the Self-Compliance Tool to analyze and document NQTL compliance will be in a strong position to comply with the CAA comparative analysis requirements.

    Specifically, the Self-Compliance Tool outlines a four-step process for analyzing whether a particular NQTL meets the MHPAEA requirements. For each step, the Self-Compliance Tool identifies certain information needed to support the analysis and the conclusions reached on whether the plan complies with MHPAEA. The Self-Compliance Tool also provides examples and compliance tips on how to conduct the comparative analysis of NQTLs, as well as potential warning signs that may indicate non-compliance.
  5. What information must a NQTL comparative analysis contain?
    The comparative analysis must contain a written detailed explanation of whether processes, strategies, evidentiary standards, or other factors that apply a NQLT to MU/SUD benefits are comparable and are not applied more stringently than to medical/surgical benefits. The CAA requires, at a minimum, that the comparative analysis contain a robust discussion of 9 elements:
    1. A clear description of the specific NQTL, plan terms, and policies at issue;
    2. Identification of the specific MH/SUD and medical/surgical benefits to which the NQTL applies;
    3. Identification of any factors, evidentiary standards, or processes considered in the application of the NQTL to MH/SUD and medical/surgical benefits;
    4. If any factors, evidentiary standards, strategies, or processes are defined in a quantitative manner, the precise definitions used;
    5. Explanation of whether there is any variation in the application of a guideline or standard between MH/SUD and medical/surgical benefits;
    6. If the application of the NQTL turns on specific decisions, the nature of the decisions, the decision makers, the timing of the decisions, and the qualifications of the decision makers;
    7. If the plan relies on experts, the experts’ qualifications and the extent to which the plan relies on the experts’ evaluations when setting recommendations for MH/SUD and medical/surgical benefits;
    8. A discussion of the plan’s findings and conclusions as to the comparability of the process, strategies, evidentiary standards, and factors of the above categories and the plan’s compliance with MHPAEA; and
    9. The date of the analysis and the name, title, and position of the persons who performed the comparative analysis.

      The CAA provides that plans should be prepared to provide documents that support the analysis and conclusions of the NQTL comparative analysis. Plans may need to provide records that document the NQTL process, any guidelines or policies on the application of NQTLs, samples of covered and denied claims, and documents related to service providers’ compliance with MHPAEA.
  6. What if the Departments determine a plan is non-compliant?
    If the Departments determine the plan or issuer has not submitted sufficient information for the comparative analysis, the Departments will specify the information the plan or issuer must provide.

    If the Departments determine a plan is non-compliant after reviewing the comparative analysis, the CAA requires the plan to specify the actions it will take to come into compliance. Specifically, the plan or issuer must submit an additional comparative analysis to demonstrate compliance within 45 days of the initial determination. Following the 45 days, if the Departments still determine the plan is non-compliant, the plan must notify all enrollees that the plan is not compliant with MAPAEA within 7 days. The Departments will also share the finding of compliance or non-compliance with the state where the plan is located or where the issuer is licensed to do business.  

Employer Action

Employers should be prepared to furnish a comparative analysis upon request by participants, the Departments, and relevant state agencies. Although compliance with NQTL requirements themselves are not new, the requirement to conduct a comparative analysis and furnish this analysis upon request is a new requirement. It is important to note that some plans may have already been conducting this type of analysis when using the Self-Compliance Tool to check the plan’s compliance for MHPAEA.

Employers may want to reach out to their carrier (if fully insured) or their third-party administrator (if self-insured/level funded) to ask what steps are being taken to comply with the new comparative analysis requirements. Employers may also ask whether a comparative analysis has been conducted on their plans, and if so, request a copy of the most-recent analysis. If a NQTL comparative analysis is requested, fully insured employers should work with their carrier and self-insured/level funded employers should work with their third-party administrator to produce the analysis and associated documents.

Additional Resources

Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2021 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.