Beginning February 10, 2021, group health plans and insurers that cover mental health/substance abuse disorder (“MH/SUD”) and medical/surgical benefits (“M/S”) are subject to two new federal requirements. Provisions in the Consolidated Appropriations Act, 2021 (“CAA”) now require group health plans to perform and document a comparative analysis of the design and application of nonquantitative treatment limits (“NQTLs”) and to disclose the analysis and related information to the Department of Labor (“DOL”) upon request.
NQTLs refer to qualitative limitations on the scope and duration of medical benefits. Examples of NQTLs include medical-management standards that limit or exclude coverage based on medical necessity or methods used to determine provider reimbursement rates. Under the Mental Health Parity & Addiction Equity Act (“MHPAEA”), the “processes, strategies, evidentiary standards and other factors” used to define plan terms and administer NQTLs for MH/SUD benefits must be comparable to and applied similarly to M/S benefits. The CAA requires group health plans and insurers to perform an analysis comparing these factors.
Although the CAA does not define the comparative analysis or explain how to document it, on April 2, 2021, the DOL released FAQs Part 45, which provides guidance on the type of information group health plans should include in the analysis, as well as the types of documents plans should make available to support it. Further, the analysis must contain a detailed explanation of the basis for a plan’s conclusion that NQTLs comply with the parity law. The DOL’s self-compliance tool provides guidance for group health plans, and plans that carefully apply the guidance are likely in compliance with the CAA.
Investigations into group health plans have increased as of late, and the DOL can bring enforcement actions against both fully insured and self-insured employer-sponsored plans for failing to meet the dictates of the MHPAEA. In fiscal year 2020, the DOL closed investigations of 180 health plans and found two NQTL violations. The DOL can require plans to correct parity violations by, for example, requiring the plans to reprocess improperly denied claims. Additionally, the DOL can refer violations to the IRS, which can assess civil penalties of up to $100 a day.