The Departments of Labor and Health and Human Services, along with the Treasury (the tri-agencies) have released several pieces of guidance relating to Mental Health Parity and Addiction Equity Act (MHPAEA).Specifically, they have provided an advanced copy of the proposed regulations, which have not yet been published in the Federal Register. In addition, and in conjunction with the proposed regulations the tri-agencies issued a technical release along with a new Report to Congress.

Following is a high-level overview of these documents. We will go into more detail in the weeks and months to come.

• Proposed Regulations. The proposed regulations notably are just proposed. They are not to be relied on at this point. The regulations propose to apply to plan years beginning on or after January 1, 2025.As a reminder the MHPAE requires parity in financial as well as quantitative limits, including financial and durational limits, and non-quantitative limits. Specific to the financial and quantitative limits the MHPAE requires that plans subject to the law treat mental health and substance use disorders comparably to medical/surgical services. Specific to these standards a mathematical test requiring that substantially all mental health/substance use services be comparable to medical/surgical services. Substantially all means two-thirds. This mathematical test, according to these regulations, would be extended to non-quantitative treatment limitations (NQTLs). Examples of NQTLs include but are not limited to medical management techniques such as preauthorization, network adequacy, and fair reimbursement rates among many more. The goal of the regulations is to ensure that a meaningful benefit is available for mental health/substance use disorder needs, and the regulations provide several examples of what a meaningful benefit would be. The regulations further provide guidance on what constitutes an appropriate comparative analysis. As a reminder the Consolidated Appropriations Act of 2021 (CAA of 2021) requires plans to have available a comparative analysis showing that NQTLs meet the comparability test. These regulations will require that the analysis shows that the NQTL can meet the two-thirds mathematical test. Notably, the regulations propose that an ERISA named plan fiduciary will need to certify that the analysis has been done and meets the requirements as required by the regulations. As a reminder, even during the interim, before these regulations become applicable, the comparative analysis is required, and plans should ensure that an analysis is available upon request by any of the governing agencies including states or by a plan participant. 

The proposed regulations also address thenon-federal self-funded governmental plan mental health parity opt-out.  As a reminder, the ConsolidatedAppropriations Act of 2023 enacted on December 29, 2022, repealed the right ofthis type of plan to opt-out of mental health parity and provided that newmental health parity opt-out elections could not be made on or after December29, 2022, and elections expiring 180 or more days after that date could not berenewed. 

Guidance issuedby the Centers for Medicare & Medicaid Services (CMS) indicates thatelections expiring on or after June 27, 2023, cannot be renewed. There is aspecial rule for certain collectively bargained plans, allowing the election tobe extended until the last CBA expires, those details can be found in theguidance. 

• Technical Release. Coincident with issuing the proposed regulations the governing agencies are releasing Technical Release 2023-01P asking for comment on the types of data that should be collected to prove compliance with the law. The technical release particularly focuses on network adequacy. It is possible that a so-called safe harbor that would indicate parity would be developed.
• Report to Congress. The Report to Congress, including both the report required by the CAA of 2021 and a report of agency audit activity, reflects six priority areas as follows: (1)prior authorization; (2)concurrent review; (3) adequacy standards for mental health provider networks; (4)provider adequacy including reimbursement and rate issues; (5)out of network reimbursement rate issues; and (6) impermissible exclusion of mental health treatment. These six priority areas are not exclusive of things the tri-agencies may be looking into, these are focus areas.

Unlike the first Report to Congress this report specifically names some plans that have been audited and have failed. It further indicates some of the corrective measures that are deemed appropriate. See Appendix: MHPAEA Guidance Compendium for additional information on violations and guidance issued. report offers a useful tool for a plan analyzing its compliance status. The agencies intend to update the compliance tool which was last updated in 2020.See here for the 2020 self-compliance tool. It is certainly possible that this tool will not be updated until these regulations are finalized.

In summary while these regulations grind through the comment, review and issuance as final regulations process health plan sponsors should take the time to work closely with plan service providers and insurers to work toward ensuring parity in quantitative and nonquantitative treatment limits.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.