Final Rules on MHPAEA and NQTL Benchmarking | Venable LLP

The government recently issued final rules on the Mental Health and Addiction Equity Act (MHPAEA). The rules implement requirements for plans to benchmark their nonquantitative treatment limitations (NQTLs). These comparative analyzes should assess disparities in coverage between plan benefits for mental health and substance use disorder (MH/SUD) and medical/surgical (Med/Surg) benefits. The new rules set out content requirements and deadlines associated with NQTL benchmarking. Some parts of the rules take effect for plan years beginning on or after January 1, 2025. The rest of the rules are in effect. January 1, 2026. This customer alert addresses important aspects of the final rules.

applicability

• MHPAEA only applies to plans that offer Med/Surg benefits and are not “excepted benefits” plans. Generally speaking, this means that MHPAEA applies to primary medical plans, not stand-alone vision or dental plans, and not to account-based plans such as health flexible spending accounts.
• If an employer’s primary medical plan is fully insured: The insurance company is responsible for preparing an NQTL benchmark. We believe that an employer will be able to rely on this analysis and will not have to prepare their own. However, because employers are required to monitor their service providers, employers should check the status of the analysis and request a copy.
• If an employer’s primary medical plan is self-funded: The employer is responsible for NQTL benchmarking. Few employers can carry out the analysis: the employer will need to hire a service provider and will also need the cooperation of its external administrator. Employers who have not yet obtained the required analysis (or have not engaged a service provider to prepare the analysis) should contact a benefits attorney as soon as possible.

Fiduciary Certification

Under the final rules, at least one plan fiduciary must certify that the fiduciary has conducted a prudent process to select a qualified service provider to prepare the NQTL benchmark. The fiduciary must also certify that the fiduciary has engaged in a process to monitor the service provider’s performance. The process for the fiduciary should include, at a minimum, asking questions about the analysis and discussing it with the service provider to understand the findings and conclusions. The fiduciary must ensure that the service provider ensures that the analysis complies with MHPAEA. The fiduciary certification requirement is effective for plan years beginning on or after January 1, 2025.

time frames

The final rules set new (and very short) deadlines for plans to respond to the government’s request for an NQTL benchmark. A plan must provide the analysis to the government within 10 business days of such a request. If the government finds the analysis insufficient, the government will request additional information, which the plan must provide within 10 business days. If the government concludes that the plan has failed to meet the NQTL benchmarking requirements, within 45 calendar days, the plan must provide the government with a corrective action plan and additional benchmarking. If the government ultimately determines that the plan is not in compliance, within 7 business days, the plan must notify all plan participants and beneficiaries of the government’s determination. These terms are effective for plan years beginning on or after January 1, 2025.

Definitions

The final rules amend the definitions of the terms “medical/surgical benefits,” “mental health benefits,” and “substance use disorder benefits” by removing a reference to state guidelines. A plan’s definition of whether a condition or disorder is MH/SUD should follow the most current version of the International Classification of Diseases or the Diagnostic and Statistical Manual of Mental Disorders. These definitions are effective for plan years beginning on or after January 1, 2025.

Rules with late entry date

• The final rules contain certain requirements that are effective for plan years beginning on or after January 1, 2026:
• Significant Benefit Requirement: A plan that provides MH/SUD benefits in any classification must provide significant MH/SUD benefits in all classifications in which Med/Surg benefits are provided.
• Design and Application Requirements: The plan cannot use discriminatory factors or standards of evidence to design an NQTL.
• Data evaluation requirement: The plan must collect and evaluate relevant data in a manner reasonably designed to assess the impact of the NQTLs. For example, the plan could collect the number of claims in which preauthorization was denied within a classification and then evaluate the denial rate for MH/SUD benefits compared to the denial rate for Med/ Surg.

Key contributions

• Employers with fully insured plans should contact their insurance company to request a copy of the NQTL Benchmarking.
• Employers with major self-funded medical plans that have not yet conducted or arranged an NQTL benchmarking should contact their benefits attorney as soon as possible.
• Employers who have already obtained an NQTL benchmark should:
  • Contact the service provider that performed the analysis to discuss whether it meets the requirements of the final rules.
  • Review the analysis and engage in a discussion with the service provider to understand the findings and conclusions.
  • Ensure that at least one plan fiduciary certifies in writing that the fiduciary engaged in a prudent process to select the service provider and has monitored the performance of the service provider.