The Consolidated Appropriations Act (CAA), 2021, enacted late in 2020, imposes a new requirement on group health plans to ensure compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA). Unlike many of the other provisions of the CAA that affect group health plans, the MHPAEA requirement under CAA section 203 goes into effect very soon—on February 10, 2021.
The MHPAEA prohibits group health plans that provide mental health and substance use disorder benefits (referred to as “MH/SUD” benefits) from imposing less favorable terms and conditions on MH/SUD benefits than on medical and surgical benefits.
One specific area of concern under the MHPAEA are nonquantitative treatment limitations (NQTLs), which are the limits that group health plans place on benefits that are not tied to specific monetary or visit limits. Some examples of NQTLs include requirements for preauthorization of certain services, provider-credentialing requirements to be admitted to a plan’s network, and use of “step therapy” or “fail-first” requirements.
Section 203 of the CAA requires group health plans to “perform and document comparative analyses of the design and application of NQTLs.” Group health plans must make this comparative analysis available, upon request, to the secretaries of the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury. Further, those agencies are required under the CAA to request these comparative analyses from at least 20 group health plans and/or health insurance issuers each year. The agencies are also required to issue a report to Congress each year, and make publicly available information about the comparative analyses, including the names of the group health plans selected, whether the group health plans submitted sufficient information, and whether any of the plans were found not to be in compliance with the MHPAEA.
Despite the requirement to perform and document a “comparative analysis,” section 203 does not provide any guidance on how the comparative analysis should be conducted, or what information it must contain. The CAA does indicate that if the agencies request a group health plan’s comparative analysis, not only must the analysis be provided, but the following information must also be submitted to the agencies:
- “The specific plan or coverage terms or other relevant terms regarding the NQTLs and a description of all [MH/SUD] and medical or surgical benefits to which each term applies in each respective benefits classification.”
- “The factors used to determine that the NQTLs will apply to [MH/SUD] benefits and medical or surgical benefits,” and the “evidentiary standards” used for these factors.
- “The comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to [MH/SUD] benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to medical or surgical benefits in the benefits classification.”
- “The specific findings and conclusions reached by the group health plan or health insurance issuer with respect to the health insurance coverage, including any results of the analyses … that indicate that the plan or coverage is or is not in compliance with [the MHPAEA].”
The secretaries of HHS, the DOL, and the Treasury are required to issue guidance regarding the required MHPAEA analysis within 18 months of the date the CAA was signed into law. Accordingly, guidance is not required to be issued until late June 2022.
So what should group health plans—and the employers that sponsor them—do to prepare in the absence of guidance?
Although the MHPAEA and section 203 specifically apply to group health plans and insurance carriers, nearly all group health plans rely on their insurance carriers or third-party administrators (TPAs) to conduct most or all of the activities that establish or implement NQTLs. These activities include the design of the group health plan’s benefits, the development and application of medical management techniques, the building and maintaining of provider networks, the processing of claims, and the development of the factors used in provider reimbursement methodologies. For that reason, and because carriers and TPAs tend to be reluctant to disclose that information, plan sponsors may need to rely heavily on their insurance carriers (for insured plans) or TPAs to conduct the comparative analysis of NQTLs and collect the required data under section 203.
Plan sponsors may want to reach out to their insurance carriers or TPAs and ask what specific steps they are taking in preparation for compliance with section 203. In addition, plan sponsors may also want to ask what information would be available to them now, if the agencies requested their plans to submit a comparative analysis of their NQTLs under section 203.
The DOL also has made available a MHPAEA Self-Compliance Tool that group health plans can use to audit their compliance with the MHPAEA. While use of the self-compliance tool doesn’t satisfy the requirement for the comparative analysis under section 203, it may help group health plans identify areas of noncompliance to address prior to an agency request for information. Plan sponsors may wish to work with their insurance carriers or TPAs to review the self-compliance tool and address any areas of noncompliance.
