Federal Agencies Propose Major Changes to Mental Health Parity Regulations

This blog post was contributed by Elena Lynett, JD, senior vice president at Segal, a CUPA-HR Mary Ann Wersch Premier Partner.

Institutions generally provide comprehensive mental health and substance use disorder (MH/SUD) benefits as part of their commitment to creating a safe and nurturing campus. However, the Mental Health Parity and Addiction Equity Act (MHPAEA) requires that institutions providing MH/SUD benefits ensure parity in coverage between the MH/SUD and medical/surgical benefits. The Department of Health and Human Services, the Department of Labor, and the Department of the Treasury recently proposed major changes to the MHPAEA regulations for group health plan sponsors and insurers.

The proposed changes address nonquantitative treatment limitations (NQTLs) — a term which references a wide range of medical management strategies and network administrative practices that may impact the scope or duration of MH/SUD benefits. Examples of NQTLs include prior or ongoing authorization requirements, formulary design for prescription drugs, and exclusions of specific treatments for certain conditions.

If government agencies issue a final rule similar to the proposal, plans will face additional data collection, evaluation, compliance and administrative requirements. The most significant proposed changes are:

• The “predominant/substantially all” testing that currently applies to financial requirements and quantitative treatment limitations under MHPAEA would apply as a threshold test for any NQTL;
• New data collection requirements, including denial rates and utilization information;
• A new “meaningful benefits” standard for MH/SUD benefits;
• Detailed requirements regarding the documented comparative analysis that plans must have for each applicable NQTL;
• Introduction of a category of NQTLs related to network composition and new rules aimed at creating parity in medical/surgical and MH/SUD networks;
• Prohibition on separate NQTLs for MH/SUD;
• For plans subject to the Employee Retirement Income Security Act of 1974 (ERISA), a requirement that a named fiduciary would have to review and certify documented comparative analysis as complying with MHPAEA; and
• For non-federal governmental plans, sunset of the ability to opt out of compliance with the MHPAEA rules.

For more information on the proposed rules, see Segal’s August 1, 2023 insight.

The deadline to comment on the proposed rules is October 17, 2023. If interested, your institution may file comments here. CUPA-HR will be filing comments with other associations representing higher education and plan sponsors. As proposed, plans could be expected to comply as early as the first day of any plan year beginning on or after January 1, 2025.