Key Considerations for All Employers: Mental Health Parity and Addiction Equity Act (MHPAE) Final Rule

This September, the tri-agencies (Department of Labor, Internal Revenue Service, and Health and Human Services) released the long-awaited Final Rule regarding the Mental Health Parity and Addiction Equity Act (MHPAE Final Rule). The Final Rule, which is effective on November 22, 2024, has a series of enforcement dates, most of which begin on plan years beginning on or after January 1, 2026. 

Generally speaking, health plans and insurance companies that provide medical/surgical benefits and mental health or substance use disorder (MH/SUD) benefits must perform and document comparative analysis of the design and application of any nonquantitative treatment limitations (NQTLs) that are imposed on MH/SUD benefits. This must be made available to state or federal agencies upon request. NQTLs can be things like prior authorization requirements, step therapy or “fail-first” policies, and limits on access to out-of-network providers. The Final Rule clarifies and solidifies how these analyses should be done and when they are due. There is also a fiduciary certification that must be completed. Read more about the Final Rule here: https://aleragroup.com/insights/are-you-prepared-comply-new-mental-health-parity-final-rule-2025

There are four NQTL’s that are the DOL’s primary focus at this time:  

• Prior authorization requirements for in-network and out-of-network inpatient services; 
• Concurrent review for in-network and out-of-network inpatient and outpatient services; 
• Standards for provider admission to a network, including reimbursement rates; 
• Out-of-network reimbursement rates, including plan methods for determining usual, customary and reasonable charges.

The rules regarding mental health parity and NQTL analysis have been challenging for employers to comply with because employers are required to provide the analysis to regulators upon request while not having the information available to do the analysis themselves. This means employers must work with their carriers and TPAs, and potentially an outside service provider, to ensure these requirements are being met. Essentially, both the carrier or TPA and the employer must shoulder the burden of these obligations in a collaborative manner for success.