Mental Health Parity and Addiction Equity Act (MHPAEA) Final Rules Issued | Bricker Graydon LLP

The Mental Health Parity and Addiction Equity Act (MHPAEA) final regulations have been issued; Self-funded government employers can no longer opt out

MHPAEA exemptions are over

If you are a state or local government that sponsors a “self-funded” employee group health plan instead of using an insurance provider, you have previously been allowed to “opt out” of the four health plan mandates of the following federal group that are otherwise applicable under the Affordable Care Act:

• The Mental Health Parity and Addiction Equity Act (MHPAEA) which requires plans that cover mental health and substance use disorder benefits to provide those benefits on par with medical and surgical benefits.
• Law for the protection of the health of newborns and the mother (NMHPA) that requires plans to cover minimum hospital stays after delivery.
• Women’s Health and Cancer Rights Act (WHCRA) that requires plans to cover reconstructive surgery after mastectomy.
• Michelle’s Law which requires plans to extend coverage to a dependent child when medical leave causes high school students to lose eligibility.

The Consolidated Appropriations Act (CAA) of 2023, enacted on December 29, 2022, removes MHPAEA from this list. The effective dates for this change depending guidance from the Centers for Medicare and Medicaid Services (CMS), are as follows:

• Opt-out elections are not permitted after December 29, 2022
• Any opt-out election that expires after June 27, 2023 cannot be renewed
• A plan subject to a collective bargaining agreement (CBA) may choose to opt out of the CBA’s validity
• A plan subject to multiple CBAs of variable duration that has elected not to participate in MHPAEA as of June 27, 2023, may extend the election until the last collective agreement expires.

Now only small government employers (generally those with 50 or fewer employees) can avoid compliance with the MHPAEA.

If you sponsor a self-funded government health plan, you can continue to use the existing CMS procedure to opt out of the NMHPA, WHCRA, and Michelle’s Law.

Final regulations of the MHPAEA

On September 23, 2024, final regulation were published amending the previous MHPAEA regulations by adding new requirements. The regulations generally take effect on January 1, 2025 with certain provisions requiring significant plan sponsor effort delayed until January 1, 2026. Government employers (except small employers), whether sponsoring a insured health plan as a self-insured, must comply with the final regulations.

MHPAEA requires plans that provide benefits for a mental health or substance use condition (MH/SUD) to provide “significant benefits” for that condition in all classifications where medical/surgical benefits are provided.

The CAA has added to these requirements by requiring plan sponsors to perform a comparative analysis of any non-quantitative treatment limitations (NQTL), which include medical management standards (such as medical necessity requirements) and network participation standards imposed on MH/SUD benefits. Under the final rules, plan sponsors will be required to collect and evaluate data to ensure that such NQTL parity exists between the types of benefits offered and will be required to take steps to correct the differences.

What should an entrepreneur do now?

First determine if your plan offers mental health services. MHPAEA does NOT require group health plans to cover MH/SUB benefits. If your plan does, get help.

The final rules are complex and you will need to work closely with your third party administrator, insurance broker, benefits attorney or other service provider to ensure compliance. Start now by asking your service providers about the final rules and how they can help you.

Whether you are newly subject to MHPAEA with the elimination of the exclusion or have an insured plan that has been subject to the law since the beginning of the Affordable Care Act, compliance with the final regulations will take time and effort . Legal counsel can help you review your current supplier contracts and make suggestions for any modifications that require compliance assistance, if applicable.

(See source.)