March 31, 2022

On January 25, 2022, the US Department of Labor (DOL), Department of Health and Human Services (HHS), and Department of Treasury – collectively the Departments – issued their annual report to Congress on the enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA). The 2022 enforcement report was the first annual report issued after the enactment of the Consolidated Appropriations Act, 2021 (CAA), which instituted new comparative analysis and obligations on employer plan sponsors with respect to the nonquantitative treatment limitations applied by health plans. We summarize below the key takeaways from the 2022 enforcement report, providing background on the CAA requirements and a look ahead at the legislative and regulatory landscape for MHPAEA.

Background on MHPAEA and the Impact of the CAA

Under MHPAEA, group health plans and issuers are required to ensure that financial requirements (FRs), quantitative treatment limitations (QTLs), and nonquantitative treatment limitations (NQTLs) on mental health and substance use disorder (MH/SUD) benefits are no more restrictive than those on medical/surgical benefits (M/S). This is commonly referred to as the plans providing MH/SUD benefits “in parity with” M/S benefits.

The CAA instituted a new requirement that group health plans perform and document comparative analyses of the design and application of NQTLs, with group health plans required to make these comparative analyses available to government regulators and plan participants upon request. The law required that the Departments review and investigate a minimum of 20 group health plans’ comparative analyses per year and submit their findings in an annual report to Congress.

Additional information on the CAA provisions related to MHPAEA compliance is available in our January 2021 and April 2021 webinars.

Highlights from the 2022 Enforcement Report

The Employee Benefits Security Administration (EBSA), who enforces MHPAEA compliance for employer plans, launched 86 investigations between April and October 2021 – significantly more than the minimum of 20 required by the CAA. None of the comparative analyses EBSA reviewed, however were deemed to contain sufficient information upon initial submission to satisfy the Departments’ expectations. The report to Congress highlights the following common deficiencies in the initial submissions to EBSA:

• Failure to identify the specific benefits, MHPAEA classifications, or plan terms to which the NQTL applies;
• Conclusory assertions lacking supporting evidence or detailed explanation;
• Lack of meaningful comparison or meaningful analysis;
• Non-responsive comparative analysis;
• Documents provided to EBSA without adequate explanation;
• Limited scope of comparative analysis to only a portion of the NQTL at issue;
• Failure to identify all factors, or a lack of sufficient detail about identified factors;
• Failure to demonstrate the application of identified factors in the design of an NQTL; and
• Failure to demonstrate compliance of an NQTL as applied.

Of the 86 investigations conducted during this period, EBSA issued 30 initial determinations of noncompliance for the following failures:

• Limitation or exclusion of applied behavioral analysis (ABA) or treatment for autism spectrum disorder;
• Exclusion or limitation on residential care or partial hospitalization to treat MH/SUD conditions;
• MH/SUD provider qualification or billing restrictions;
• Limitation or exclusion of medication assisted treatment (MAT) for opioid use disorder;
• Preauthorization or precertification requirements;
• Limitation or exclusion of nutritional counseling for MH/SUD conditions; and
• Provider experience requirement beyond licensure.

Crucially, EBSA has not yet made any final determinations of noncompliance regarding any of the investigations. conducted in 2021.

In addition to documenting ongoing enforcement efforts, the report asks Congress to expand the Departments’ regulatory authority in the following ways, arguing these will strengthen MHPAEA’s protections:

• 1 | Authority to assess civil monetary penalties for parity violations;
• 2 | Authority for the DOL to directly pursue MHPAEA violations by entities that provide administrative services to group health plans (e.g., health insurance issuers and TPAs);
• 3 | Allowing the DOL, on behalf of participants and beneficiaries, to recover claims dollars lost due to wrongful denial of claims in violation of MHPAEA; and
• 4 | Amending MHPAEA to define MH/SUD benefits by referencing current authoritative external sources like the Diagnostic and Statistical Manual of Mental Disorders (DSM) and the International Classification of Diseases (ICD).

What’s Next?

MHPAEA compliance remains an ongoing area of focus for regulators. The 2022 report highlights the Departments’ investment in resources and personnel dedicated to enforcement efforts. Employers can look forward to additional guidance being released in coming months, as the CAA requires the Departments to issue guidance regarding the NQTL comparative analysis requirements no later than June 2022 (18 months from enactment of the CAA). The Departments have previously issued MHPAEA guidance in the form of Frequently Asked Questions (FAQs), a format we anticipate will continue.

The enforcement report also indicates the Departments will update the DOL’s MHPAEA Self-Compliance Tool, which was last updated prior to the enactment of the CAA. It remains, unclear, however, whether any additional sub-regulatory guidance – for example, resources such as model fully-compliant NQTL comparative analyses – will be issued to support employer plan sponsors in ensuring their compliance.

On the legislative front, Congress has held hearings on MHPAEA enforcement as part of broader efforts to address mental health and substance use issues. Of the expanded authorities requested by the Departments in the 2022 enforcement report, there appears to be growing support for allowing the DOL to issue civil monetary penalties.

The Business Group will continue to monitor future developments and keep our members informed of ongoing enforcement efforts and any developments granting the Departments expanded regulatory authority. In the meantime, we recommend that employers discuss how to comply with MHPAEA generally – and the NQTL comparative analysis requirements specifically – with TPAs, health plans, other vendors and legal counsel.

A detailed discussion of the 2022 enforcement report and the implications for employer plan sponsors is available in our February 2022 webinar.

• FAQs about Mental Health and Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021 Part 45
• Business Group on Health Webinar: Regulatory & Compliance Update, February 2022
• Business Group on Health Webinar: Regulatory & Compliance Update, April 2021
• Business Group on Health Webinar: Regulatory & Compliance Update, January 2021

If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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