The rules amend the longstanding 2013 final rules and establish new standards for nonquantitative treatment limitations (NQTLs), including implementing the additional documented comparative analyses requirements that were added through the Consolidated Appropriations Act of 2020.

The rules contain additional definitions, call for coverage of core treatments for covered mental health and substance use conditions, and require collection and review of data outcomes.

These rules advance the administration’s continued efforts to strengthen parity between medical/surgical and mental health and substance use disorder (MH/SUD) treatment. The rules have staggered applicability dates, with some provisions taking effect for plan years beginning on or after January 1, 2025, and others for plan years beginning on or after January 1, 2026.

The final rules were published after a comment period that generated more than 9,500 comments in response to the 2023 proposed rules.

Background

On December 27, 2020, Congress enacted the Consolidated Appropriations Act, 2021 (CAA), which amended MHPAEA, in part, to require group health plans and health insurers that offer both medical/surgical benefits and mental health/substance use disorder (MH/SUD) benefits and impose NQTLs on MH/SUD benefits to perform and document comparative analyses of the design and application of their NQTLs. (We discussed these requirements in our January 14, 2021 insight, “New Law Strengthens Parity for Mental Health and SUD,” which includes examples of NQTLs.)

The comparative analysis requirements became effective on February 10, 2021. Plans and insurers must make their comparative analyses available to the Departments or applicable state authorities, upon request.

On July 25, 2023, the Departments announced proposed rules (published in the Federal Register on August 3, 2023), which we discussed in our August 1, 2023 insight. Additionally, the DOL issued Technical Release 2023-01P seeking comments related to network composition requirements.

The final rules

Notably, the final rules issued by the Departments do not finalize the application of the substantially all/predominant test to NQTLs that was in the 2023 proposed rules. This test, if even feasible, would have created significant burden for plans and their administrators.

Under the final rules, plans must ensure that the “processes,” “strategies,” “factors” and “evidentiary standards” used in designing and applying an NQTL are comparable and applied no more stringently with respect MH/SUD conditions than for medical/surgical conditions. The final rules include an express prohibition on factors and evidentiary standards that discriminate against MH conditions and SUDs. The final rules do not include the proposed exceptions for clinically standards of care and fraud and abuse. Consequently, such activities should be incorporated, if appropriate, into NQTL analysis.

In addition, the Departments finalized requirements relating to data collection and reviewing data outcomes. Applicable for the 2026 plan year, plans will be required to identify material differences in outcomes. Unlike the proposed rules that suggested de facto findings of noncompliance, plan sponsors will need either to substantiate such differences or take corrective measures to address them. Plans are required to document corrective measures. The Departments acknowledge telehealth as a measure that supports access to MH/SUD benefits which can be taken into account in comparative information.

The final rules add definitions, including relying on the most current versions of the Diagnostic and Statistical Manual (currently the DSM-V) and the International Classification of Diseases (currently the ICD-10). Further, the rules finalize the meaningful benefits standards, which specify that if a plan provides any benefits for a MH/SUD condition or disorder in any classification of benefits, the plan must provide core treatment for that condition or disorder in each classification in which comparative medical/surgical benefits are provided.

Like the proposed rules, the final rules detail the required content of the documented comparative analysis, including a fiduciary certification requirement. In a departure from the proposed regulation, under the final rules the fiduciary certification focuses on the prudent selection and monitoring of service providers involved in the development of documented comparative analysis. The Departments discuss the process for findings of noncompliance, including that plans will have to demonstrate compliance for NQTLs or take remedial action to address violations.

The final rules retain the strict timing requirements for providing information to the Departments or individuals requesting information. This means that plans have 10 days to respond to an initial request. In instances where the response to an initial request is considered insufficient and DOL or HHS request supplemental information, a plan again has 10 days to respond. Finally, in instances of a final determination of noncompliance, plans will be required to provide notice to individuals covered under the plan within seven days.

Finally, as expected, the final rules implement the sunset provision for self-funded, non-federal governmental plan elections to opt out of compliance with MHPAEA.

Additional resources

The Departments issued the final rules in conjunction with a press release, a fact sheet and one-page documents for plans and issuers, consumers and providers.

The Departments are expected to issue additional guidance, including guidance related to outcomes data collection and evaluation, as well as an updated self-compliance tool.

Implications for plan sponsors

The final rules set forth new standards for imposing NQTLs on MH/SUD conditions and requires additional data collection and evaluation requirements for compliant NQTL documented comparative analyses. Plan sponsors should evaluate the final rules and determine the impact on future MHPAEA compliance efforts.

In November, Segal will be hosting a webinar to discuss the final rules. If you’re not on our email list, sign up to be sure to receive an invitation that will include more information and the details.