CAA requires health plans to demonstrate MHPAEA compliance

The Consolidated Appropriations Act, 2021 (CAA), the year-end stimulus and budget law enacted on December 27, 2020, includes a requirement for group health plans providing mental health and substance use disorder (MH/SUD) benefits, as well as medical/surgical (M/S) benefits, to formally analyze and compare nonquantitative treatment limitations (NQTLs) between those benefits. The data and results must be reported to the applicable federal agency — either the Department of Labor (DOL)¹ or the Department of Health and Human Services (HHS), as appropriate — upon request, within 45 days of the CAA’s enactment. This means the DOL can begin requesting a comparative analysis report from group health plans starting February 10, 2021.

While the Mental Health Parity and Addiction Equity Act (MHPAEA)² currently requires group health plans to provide parity between MH/SUD and M/S benefits with respect to quantitative financial and treatment limitations (e.g., copays/coinsurance, visit limits, day limits) and NQTLs (e.g., preauthorization requirements, network sufficiency, medical management standards), the CAA has created more formal analyses and reporting requirements.

Formal NQTL parity comparative analysis

The NQTL analysis required by the CAA must include the following:

• The specific plan terms or other relevant terms regarding the NQTLs and a description of all MH/SUD and M/S benefits to which each such term applies in each respective benefit classification
• The factors used to determine that the NQTLs will apply to MH/SUD benefits and M/S benefits
• The evidentiary standards used for the factors identified in the preceding bullet, when applicable, provided that every factor shall be defined, and any other source or evidence relied upon to design and apply the NQTLs to MH/SUD benefits and M/S benefits
• The comparative analyses demonstrating that the processes, strategies, evidentiary standards and other factors used to apply the NQTLs to MH/SUD benefits are comparable to, and applied no more stringently than, those same factors used to apply the NQTLs to M/S benefits in the benefits classification
• The specific findings and conclusions reached by the group health plan, including any results of the analyses described above, that indicate that the plan is or is not in compliance with these requirements

Note that the government regulators must finalize any draft or interim guidance and regulations relating to the NQTL analysis requirements in CAA within 18 months after the date of enactment.

Reporting analysis results

Generally, the DOL can request that a group health plan submit the new NQTL comparative analyses for potential violations of the MHPAEA, complaints regarding NQTL noncompliance and “any other instances in which the DOL determines appropriate.” The CCA also requires the DOL to request no fewer than 20 of the NQTL compliance analyses per year.

The following briefly describes the process under which an NQTL analysis will be reviewed, as set forth in the CAA:

• If the DOL concludes that the group health plan has not submitted sufficient information for it to review the comparative analyses, the DOL will specify the information the plan must submit to be responsive.
• If the DOL concludes the group health plan is not in compliance, within 45 days of that finding, the group health plan must provide an action plan that it will implement to bring itself into compliance, as well as additional comparative analyses.
• If, after the 45-day corrective action period, the plan is still found to be noncompliant, the DOL will notify all group health plan participants of the noncompliance within seven days.

The DOL Secretary must submit a report to Congress on December 20, 2021, with a summary of the comparative analyses received, and then no later than October 1 of each year thereafter. That report, available to the public, will include the group health plans and issuers that are not in compliance with the MHPAEA. Also, the DOL is required to share its findings on whether or not a group health plan is in MHPAEA compliance with the states where the group health plan is located.

Going forward

Employers should determine whether MHPAEA analysis (including NQTL analysis) has been conducted (and documented) on their group health plans:

• Those that have conducted a NQTL analysis of their group health plan should determine whether the analysis meets the requirements provided in the CAA and be prepared to report data and results to the DOL.
• Those that have never tested their group health plans for MHPAEA compliance or that need to update testing due to plan design changes should conduct testing and prepare the analysis report as soon as practicable.

It is not yet known whether the DOL will begin reviews before formal implementation guidance is issued. Employers should consult with those knowledgeable in how NQTLs operate in group health plan administration to ensure compliance.

Footnotes

¹ The DOL will enforce the provisions for group health plans subject to ERISA. 

² See “Final FAQs issued on nonquantitative treatment limits under MHPAEA,” Insider, September 2019.