Group health plans and insurers have been required since 2008 to ensure that any “nonquantitative treatment limitations” (NQTLs) imposed on mental health or substance use disorder (MH/SUD) benefits are comparable and no more restrictive than similar limitations imposed on medical or surgical benefits. However, as of February 10, 2021 (only 45 days after the requirement was enacted under the Consolidated Appropriations Act, 2021), group health plan sponsors and insurers must test their plans for compliance and be prepared to prove their compliance to regulators, including the Department of Labor (DOL), which has made no secret of its eagerness to utilize its new enforcement tool.
What is an NQTL?
An NQTL is a non-numerical standard that limits the scope or duration of benefits for services under a plan. NQTLs include, but are not limited to, the following items:
- Medical management standards;
- Standards for network provider admission including reimbursement rates;
- Formularies for prescriptions;
- Plan methods for determining customary charges;
- Fail-first policies or step-therapy protocols;
- Exclusions based on failure to complete a course of treatment;
- Network tier design for plans with multiple network tiers; and
- Restrictions based on geographic location, facility type, or provider specialty.
Who must prepare the analysis?
For insured plans, this responsibility falls on the insurer. However, for self-insured plans, the employer is solely responsible and cannot expect third-party administrators to prepare the analysis. In any case, whoever is responsible must be ready to provide the comparative analysis upon request of the applicable agencies. For plans subject to the Employee Retirement Income Security Act (ERISA), the request is likely to come from the DOL. For other plans, such as church plans, the request may come from the Internal Revenue Service (IRS) or even a state agency.
Practice Pointer: As one can imagine based on the sample list of NQTLs above, preparing an analysis that compares the application of NQTLs to MH/SUD benefits and to medical and surgical benefits is no simple matter. For this reason, if you sponsor a self-insured health plan, you should ensure that the consultant or advisor you engage to prepare the analysis is competent and experienced in providing this type of analysis.
What have the agencies said about this new requirement?
The DOL, IRS, and Department of Health and Human Services have jointly issued FAQs elaborating on this new compliance obligation. In addition, the Centers for Medicaid and Medicare Services has previously issued guidance and templates for analyzing and documenting the processes, strategies, evidentiary standards, or other factors used in applying NQTLs to MH/SUD benefits. Furthermore, the DOL recently finalized its Self-Compliance Tool, which is designed to help employers comply with this and other requirements stemming from the Mental Health Parity and Addiction Equity Act of 2008. The Self-Compliance Tool includes revised compliance examples, best practices for establishing an internal compliance plan, and “warning signs” that may indicate potential violations. According to the DOL, plans that have carefully applied the guidance in the Self-Compliance Tool should be in a strong position to submit comparative analyses upon request. However, the completion of the Self-Compliance Tool itself is also fairly involved and may require the assistance of an advisor with specific expertise in this area.
How are the agencies enforcing the new requirement?
Agency requests for the comparative analysis may be random or in response to a complaint alleging a parity violation. If the agency’s review of the provided information indicates a parity violation, the plan will have 45 days in which to provide additional analysis or specify the actions it will take to correct the violation. If the agency makes a final determination that the plan is still out of compliance, the plan will be required to notify all enrollees of the noncompliance within seven days of the determination.
In addition, the agencies may share findings of compliance and noncompliance with applicable state officials (with respect to plans subject to state regulation). ERISA plan participants are also entitled to receive a plan’s comparative analyses and supporting information upon request. In addition, with respect to non-grandfathered plans, claimants may request the analyses in conjunction with an appeal of an adverse benefit determination. Health plans need to be aware of these requirements in connection with participant requests and appeals.
Practice Pointer: If you sponsor a self-insured health plan, you may want to arrange now for the comparative analysis to be performed, or, at a minimum, find an advisor who can prepare the analysis (and determine the time and cost involved).
If you have any questions about the new requirement, please contact one of the attorneys in the Employee Benefits and Executive Compensation Group at Bradley.