Mental Health Parity and Addiction Equity Act (MHPAEA) Final Regulations Have Been Issued

Mental Health Parity and Addiction Equity Act (MHPAEA) Final Regulations Have Been Issued; Self-Funded Governmental Employers Can No Longer Opt-Out of Compliance

MHPAEA Opt-Outs are Over

If you are a state or local government that sponsors a “self-funded” employee group health plan instead of using an insurance provider, you had previously been allowed to “opt out” of compliance with the following four federal group health plan mandates that are otherwise applicable under the Affordable Care Act:

• The Mental Health Parity and Addiction Equity Act (MHPAEA) which requires that plans covering mental health and substance use disorder benefits provide those benefits in parity with medical and surgical benefits.
• The Newborns’ and Mothers’ Health Protection Act (NMHPA) which requires that plans cover minimum hospital stays after childbirth.
• The Women’s Health and Cancer Rights Act (WHCRA) which requires plans to cover post-mastectomy reconstructive surgery.
• Michelle’s Law which requires plans to extend coverage to a dependent child when medical leave causes loss of postsecondary student eligibility.

The 2023 Consolidated Appropriations Act (CAA), enacted on December 29, 2022, eliminates MHPAEA from this list. The effective dates for this change according to guidance from the Centers for Medicare & Medicaid Services (CMS), are as follows:

• No opt-out elections are allowed after December 29, 2022
• Any opt-out election that expires on or after June 27, 2023 cannot be renewed
• A plan subject to a collective bargaining agreement (CBA) can elect to opt out for the term of the CBA
• A plan subject to multiple CBAs of varying lengths that has opted out of MHPAEA as of June 27, 2023, may extend the election until the last collective bargaining agreement expires.

Now only small governmental employers (generally those with 50 or fewer employees) are permitted to avoid complying with MHPAEA.

If you sponsor a self-funded governmental health plan, you may continue to use the existing CMS procedure to opt out of NMHPA, WHCRA and Michelle’s Law.

MHPAEA Final Regulations

On September 23, 2024, final regulations were issued amending prior MHPAEA regulations adding new requirements. The regulations generally take effect January 1, 2025 with certain provisions that require significant plan sponsor effort delayed until January 1, 2026. Governmental employers (except small employers) whether sponsoring an insured or a self-insured health plan will need to comply with the final regulations.

MHPAEA requires that plans that provide benefits for a mental health or substance use disorder (MH/SUD) condition have to provide “meaningful benefits” for that condition in every classification where medical/surgical benefits are provided.

The CAA added to these requirements by mandating that plan sponsors perform a comparative analysis of any nonquantitative treatment limitations (NQTLs), which include medical management standards (such as medical necessity requirements) and standards for network participation imposed on MH/SUD benefits. Under the final rules, plan sponsors will need to collect and evaluate data to ensure that this NQTL parity between the types of benefits offered exists and will need to take steps to correct differences.

What Should an Employer Do Now?

First determine if your plan offers mental health services. MHPAEA does NOT require group health plans to cover MH/SUB benefits. If your plan does - get help.

The final rules are complex and you will need to work closely with your third-party administrator, insurance broker, benefits attorney or other service provider to ensure compliance. Get started now by asking your service providers about the final rules and how they can help.

Whether you are newly subject to MHPAEA with the elimination of the opt out or have an insured plan that has been subject to the law from the inception of the Affordable Care Act, compliance with the final regulations will require time and effort. Legal counsel can help review your current vendor contracts and make suggestions for any amendments to require necessary compliance assistance where appropriate.