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The Departments of the Treasury (IRS), Labor (EBSA), and Health and Human Services released the updated final rules implementing the changes to the Mental Health Parity and Addiction Equity Act (MHPAEA), including amendments made by the Consolidated Appropriations Act, 2021 (CAA). The final regulations will be effective 60 days after they are published in the Federal Register, so group health plans will be required to comply with some of the final rules in 2025- but they will not be fully implemented until plan years starting in 2026.

Background 

MHPAEA was first passed in 2008 to address mental health concerns and the disparity in coverage for mental health benefits in group medical plans and health insurance as compared to the coverage in those plans for medical and surgical coverage. In the intervening years, additional concerns were raised that the insurance carriers and group medical plans were using nonquantitative treatment limitations (NQTLs) in a way that undermined comparability in the types of coverage. Several changes were enacted via legislation, and the agencies audited several carriers and group plans to determine how to address ongoing disparities. 

Summary of the Final Rules 

The agencies note in the preamble that the final rules: 

Make clear that MHPAEA requires that individuals will not face greater restrictions on access to mental health and substance use disorder benefits as compared to medical/surgical benefits. 

Reinforce that health plans and issuers cannot use NQTLs, such as prior authorization and other medical management techniques, standards related to network composition, or methodologies to determine out-of-network reimbursement rates, for mental health and substance use disorder benefits, that are more restrictive than the predominant NQTLs applied to substantially all medical/surgical benefits in the same classification. 

Require plans and issuers to collect and evaluate data and take reasonable action, as necessary, to address material differences in access to mental health and substance use disorder benefits as compared to medical/surgical benefits, where the relevant data suggest that the NQTL contributes to material differences in access. 

Codify the requirement in MHPAEA, as amended by the CAA, 2021, that health plans and issuers conduct comparative analyses to measure the impact of NQTLs. This includes evaluating standards related to network composition, out-of-network reimbursement rates, medical management, and prior authorization NQTLs. 

Prohibit plans and issuers from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to mental health and substance use disorder benefits when designing NQTLs. 

Implement the sunset provision for self-funded non-Federal governmental plan elections to opt out of compliance with MHPAEA. 

In addition, the plans and carriers will be required to document the comparative analysis between the mental health and medical/surgical NQTLs and maintain the documentation to provide to the agencies upon demand.

Impact on Employer Group Medical Plans 

Employers have fairly broad flexibility with respect to their group medical plan designs and operations. Nevertheless, almost universally, employers rely on their insurance carriers and other vendors to design and implement coverage options that comply with the various requirements under state and federal coverage mandates and design requirements. Employers do not have the expertise to properly evaluate detailed coverage decisions, and operations demanded to comply with a complex set of rules and factors that go into making various options covered, network affiliations, medical management, and preauthorization requirements. Therefore, they have to rely on the experts in those fields to make those determinations.   The final regulations, including the preamble, are 536 pages long. Employers and their HR and Benefits personnel cannot be expected to read and implement such a complex set of rules and be certain they can implement them properly. Therefore, employers will want to obtain assurances from their carriers and vendors that they will be taking these changes into account to ensure they are implemented timely. Employers with fully insured plans will likely be able to rely on their insurance carriers for full compliance and documentation of the requirements. Self-funded plan sponsors may find that they will have to push their vendors to provide that documentation so that they will have it when required.

This Legal Update is not intended to be exhaustive, nor should any discussion or opinion be construed as legal advice. Readers should contact legal counsel for legal advice. All rights reserved.