NOTE: As we were preparing to publish this eAlert, the DOL issued proposed mental health parity regulations. We will provide an update on the proposed regulations in a future eAlert. Nonetheless, group health plans must still conduct an NQTL comparative analysis, and the “Action Items for Employers” below are still applicable.
Employers continue to struggle with the non-quantitative treatment limitation (NQTL) comparative analysis for their health plans – a requirement since early 2021 under the federal mental health parity law. The federal government has repeatedly stated that compliance with the federal mental health parity law is a top enforcement priority, and the government gave a failing grade to every one of the 100+ NQTL comparative analyses it audited in 2022. But employers and practitioners are frustrated with the lack of guidance from the federal government to help plans comply with the NQTL comparative analysis requirement. Hopefully, proposed regulations that the U.S. Department of Labor (DOL) recently sent to the executive branch for review will provide much-needed guidance. In the meantime, the requirement for health plans to conduct an NQTL comparative analysis is still in place, and employers need to figure out how to comply.
The Mental Health Parity and Addiction Equity Act (MHPAEA) prohibits health plans from imposing NQTLs that are more restrictive for mental health and substance use disorder (MH/SUD) benefits than for the plan’s medical and surgical benefits. NQTLs are non-numerical limits on benefits, including those created by processes, strategies and evidentiary standards. For example, a plan cannot require prior authorization for inpatient alcohol addiction rehabilitation if it does not also require prior authorization for inpatient hospitalization for a surgery. Under the Consolidated Appropriations Act, 2021 (CAA), group health plans must complete a written analysis that compares the plan’s NQTL design and application with respect to its MH/SUD benefits and its medical and surgical benefits, beginning February 10, 2021. The NQTL comparative analysis must include a robust, detailed evaluation of nine specific elements:
- Description of the specific NQTL, plan terms and policies at issue.
- Identification of the specific MH/SUD and medical and surgical benefits to which the NQTL applies.
- Identification of any factors, evidentiary standards or sources, or strategies or processes considered in the design or application of the NQTL and in determining which benefits, including both MH/SUD benefits and medical and surgical benefits, are subject to the NQTL.
- Precise definitions of the factors, evidentiary standards, strategies or processes, and any supporting sources.
- Explanation of whether there is any variation in the application of a guideline or standard used by the plan between MH/SUD and medical/surgical benefits and, if so, a description of the process and factors used for establishing that variation.
- If the application of the NQTL turns on specific decisions in administration of the benefits, identification of the nature of the decisions, the decisionmaker(s), the timing of the decisions and the qualifications of the decisionmaker(s).
- If the plan’s analyses rely upon any experts, an assessment of each expert’s qualifications and the extent to which the plan ultimately relied upon each expert’s evaluations in setting recommendations regarding both MH/SUD and medical and surgical benefits.
- A reasoned discussion of the plan’s findings and conclusions as to the comparability of the processes, strategies, evidentiary standards, factors and sources identified above within each affected classification, and their relative stringency, both as applied and as written.
- The date of the analyses and the name, title and position of the person or persons who performed or participated in the comparative analyses.
Action Items for Employers
If you have a fully-insured plan, the insurer prepares the NQTL comparative analysis, and you should request a copy from the insurer for your plan’s particular design.
If you have a self-funded plan, compliance has been trickier. First, ask your third-party claims administrator (TPA) if it has completed an NQTL comparative analysis for your plan’s particular design. However, almost all of the TPAs we’ve spoken to have stated they are not preparing the NQTL comparative analysis on behalf of their self-funded groups. If that is the case with your TPA, you will need to prepare the NQTL yourself, or with the assistance of a third party vendor. Ask your TPA what information it will provide to assist you with completing the NQTL comparative analysis. The DOL directs employers to its MHPAEA self-compliance tool as a resource to assist employers in evaluating NQTLs and completing the comparative analysis. Unfortunately, the self-compliance tool does not provide specific guidance on the nine elements required for the NQTL comparative analysis, so it has limited use to employers and plans.
Since employers and plans are clearly struggling to comply with the NQTL comparative analysis requirement, we’re hopeful that the newly proposed regulations will provide much-needed guidance. Compliance with the NQTL comparative analysis has become a top enforcement priority, and we’ve seen a significant amount of litigation related to MHPAEA compliance. If you have questions about the NQTL comparative analysis or need assistance with completing it, Warner can help! Please contact Stephanie Grant or any member of Warner’s Employee Benefits Practice Group.