On September 9, 2024, the U.S. Department of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, the Departments) issued a Final Rule clarifying and adding additional requirements on health plans to provide equitable access to health insurance coverage for treatment of mental health and substance use disorders (SUDs), as required by the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and implementing regulations at 45 C.F.R. Part 146 and 147 (the 2024 Final Rule).
MHPAEA is a federal law that prevents group health plans and health insurance issuers (collectively, Health Plans) that provide mental health or substance use disorder benefits from imposing less favorable benefit limitations on those benefits than it does for a medical condition or surgical procedure. This means that Health Plans cannot impose additional financial requirements or apply non-quantitative treatment limitations (NQTLs) to these benefits more stringently than those applied to medical/surgical benefits.
Past Compliance Issues
When MHPAEA was amended by the Consolidated Appropriations Act of 2021 (CAA), a provision was added that requires plans and issuers to perform and document comparative analyses of the design and application of their NQTLs and provide those analyses to the Departments upon request. This provision also requires the Secretaries to report to Congress annually on the results of these NQTL comparative analyses reviews conducted by the Secretaries. In January 2022, the Departments published the first report since the enactment of the CAA.
The report noted that every comparative analysis reviewed was in some way insufficient when it was initially submitted to DOL’s Employee Benefits Security Administration (EBSA) or to HHS’s Centers for Medicare & Medicaid Services (CMS).
Building on the lessons learned from implementing and enforcing MHPAEA, in August 2023 the Departments published a notice of proposed rulemaking (NPRM) recommending modifications consistent with the requirements of MHPAEA, as amended by the CAA. While the Final Rule adopts many of the proposals set forth in the NPRM, it also includes additional modifications that were informed by public comment in an effort to ensure that plans and issuers understand and comply with NQTL requirements and to ensure that participants, beneficiaries, and enrollees can access the mental health and SUD care they need without facing greater restrictions than when accessing medical and surgical care.
The Final Rule aims to strengthen the existing NQTL standard to prohibit group health plans and health insurance issuers from placing greater restrictions on access to mental health and SUD benefits compared to medical or surgical benefits. Specifically, the Rule requires plans and issuers to collect and evaluate relevant data to assess the impact of NQTLs on access to mental health and SUD benefits and take reasonable action to address material differences in access and mandates that health plans and issuers conduct comparative analyses to evaluate the impact of NQTLs. Areas impacted include network composition, out-of-network reimbursement rates, and medical management and prior authorization practices. Health Plans may not use biased information or standards that unfairly limit access to mental health/SUD benefits compared to medical/surgical benefits when creating NQTLs.
Impact on Compliance Requirements—an Emphasis on Enforcement
Nearly 16 years after the enactment of MHPAEA, the United States continues to face a mental health and SUD crisis, with persistent disparities in coverage for these conditions. A study published in 2024 found that 10 percent of adults and 8.5 percent of children still have private insurance that does not cover these services. The 2024 Final Rule emphasizes the need for Health Plans to take reasonable action to address material differences in access to mental health or SUD benefits compared to medical/surgical benefits. The Final Rule includes provisions to ensure compliance and enforcement of the new standards which may include immediate cessation of the application of an NQTL.
What’s Next…
The Final Rule generally applies to group health plans starting on January 1, 2025. However, group health plans have until January 1, 2026, to be in compliance with the meaningful benefits standard, the prohibition on discriminatory factors and evidentiary standards, the relevant data evaluation requirements, and the related requirements in the provisions for comparative analyses. Individual health plans must be in compliance by January 1, 2026.
We recommend that group and individual health plans begin reviewing their policies and practices.
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