Alerts

Background 

The federal government (the Departments of Health and Human Services, Treasury, and Labor) recently announced a pause on enforcement of the new requirements introduced by the 2024 Final Rule under the Mental Health Parity and Addiction Equity Act (MHPAEA), specifically those affecting nonquantitative treatment limitations (NQTLs). NQTLs are non-numerical limits on benefits, such as prior authorization, step therapy, medical necessity criteria, and network adequacy for mental health and substance use disorder (MH/SUD) benefits. A final rule was released last year that imposed highly specific and complex requirements that health plans would have to comply with. Fully insured plans are able to rely on the carrier analysis and documentation. Self-funded plans are required to comply with the rules without being able to rely on carrier analyses. That caused substantial consternation to employers looking at the issue and provoked a lawsuit by ERIC (the ERISA Industry Committee). Hopefully, the pause will allow rules to be adjusted that self-funded plans can implement. 

What Is Paused 

The enforcement pause means that the new, more stringent requirements from the 2024 Final Rule—including expanded content and evidentiary standards for NQTL comparative analyses, fiduciary certification requirements, and network adequacy standards—will not be enforced until at least 18 months after the conclusion of ongoing litigation challenging the rule. The Departments of Labor, Health and Human Services, and the Treasury are also using this period to reconsider their enforcement approach to MHPAEA.

Key paused provisions include

• The requirement for detailed data collection and analysis of NQTLs
• New standards for demonstrating “meaningful benefits” for MH/SUD conditions
• Fiduciary certification that the plan’s NQTL analysis process is compliant
• Expanded documentation and outcomes data requirements for NQTL comparative analyses
  
  

What Remains in Effect

Despite the pause, existing MHPAEA obligations, as enhanced by the Consolidated Appropriations Act of 2021 (CAA 2021), remain fully enforceable. Plans and issuers must continue to:

• Maintain and update NQTL comparative analyses as required under the 2013 Final Rule and CAA 2021.
• Provide these analyses to federal agencies or plan participants upon request within statutory timeframes.
• Ensure that NQTLs applied to MH/SUD benefits are comparable to, and no more stringent than, those applied to medical/surgical benefits.
  
  

In summary:

The pause gives plan sponsors temporary relief from the new 2024 Final Rule requirements but does not suspend the underlying parity law or the need for NQTL comparative analyses under previous rules. Plans must still perform, the analysis, document that process, and be prepared to produce these analyses if requested by regulators or plan participants.

Practical Implications for Employers and Plan Sponsors

• Continue compliance: Maintain and update NQTL comparative analyses as under pre-2024 rules.
  • Fully insured plans can rely on the insurer analyses to meet those compliance obligations.
  • Self-funded (including many level funded) plans need to confirm with their third-party administrators or contracted vendors that the analyses are being performed.
  • Plans should specifically maintain current and detailed analyses that identify benefit design, vendor processes and standards, and outcomes that will demonstrate compliance in operation.
  • In addition, many employers may want to consult with their legal counsel regarding any next steps before making any decisions. 

• No need for new certifications or expanded data: The new requirements from the 2024 Final Rule are paused.
• Prepare for future enforcement: The pause could be lifted after litigation concludes, and agencies may revise enforcement strategies.
• Stay informed: Expect quarterly updates from regulators and monitor for further changes.
  
  

Conclusion

The pause on the NQTL analysis means enforcement of the new, more detailed requirements is temporarily suspended. Still, the obligation to maintain and provide NQTL comparative analyses under prior law remains. Employers and plan sponsors should continue current compliance activities and be ready for potential changes when the pause is lifted.

This Legal Update is not intended to be exhaustive, nor should any discussion or opinion be construed as legal advice. Readers should contact legal counsel for legal advice. All rights reserved.