GBS Health & Benefits Compliance
Mental Health Parity Requirements and Recent Changes in Final Rule
On September 9, 2024, the Departments of Labor, Health and Human Services, and the Treasury released a final rule to strengthen the Mental Health Parity and Addiction Equity Act (MHPAEA). The purpose of the rule is to ensure that individuals with private health insurance receive mental health and substance use disorder (MH/SUD) benefits on par with medical/surgical (M/S) benefits, without facing additional restrictions.
A key element of the final rule is the introduction of stronger protections against restrictive nonquantitative treatment limitations (NQTLs). Notably, it requires group health plans and insurance issuers to collect and analyze data on NQTLs imposed on MH/SUD services and make adjustments if the data indicates insufficient access.
The final rule applies to issuers and employer sponsors of group health plans for plan years starting on or after January 1, 2025, but certain requirements, such as the NQTL data evaluation, is effective for plan years beginning on or after January 1, 2026.
Overview of MHPAEA
MHPAEA requires parity between a group health plan’s M/S and MH/SUD benefits, covering:
- Financial requirements, including deductibles, copayments, and coinsurance;
- Quantitative treatment limitations, like day or visit limits; and
- NQTLs, which affect the scope or duration of benefits, such as prior authorization, step therapy, and provider network standards.
The MHPAEA standards apply to group health plans sponsored by employers with more than 50 employees. Additionally, due to reforms from the Affordable Care Act, small group market insured health plans must also meet federal MH/SUD parity requirements.
The 2021 Consolidated Appropriations Act amended MHPAEA, requiring health plans and issuers to conduct comparative analyses of NQTLs applied to M/S versus MH/SUD benefits. These analyses must include a detailed explanation of plan terms, practices, and the basis for the plan’s conclusion that it the NQTLs are in line with MHPAEA.
- Private Right of Action:
- Individuals covered under employer-sponsored group health plans have the right to file lawsuits to recover benefits due to them under the plan, enforce their rights, or clarify future benefits under the plan. This means that plan participants can take legal action against employers or plan issuers for MHPAEA violations.
- State Enforcement Actions:
- State insurance agencies may also enforce MHPAEA compliance for fully insured plans. Penalties and enforcement mechanisms can vary by state but may include fines, corrective action plans, or other remedies.
October 2024
This document is not intended to be exhaustive, nor should any information be construed as tax or legal advice. Readers should contact a tax professional or attorney if legal advice is needed. Although we have made every effort to provide complete, up-to date, and accurate information in this document, such information is meant to be used for reference only. If there is any inconsistency between the information contained in this document and any applicable law, then such law will control.
