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How Proposed Mental Health Parity Regulations Could Impact Access to Benefits

The COVID pandemic was responsible for a number of things:  Some good, many bad, and a lot of things in between. 

From a healthcare perspective, one of the good things that came out of the COVID pandemic was the rise of telehealth, with an increased spike in telehealth utilization, which generally came with high satisfaction rates among those employees and their dependents utilizing telemedicine-related services, and with a greater acceptance that telehealth services should remain available post-pandemic. 

One of the bad things – which continues to adversely impact young children, teenagers, and adults today – is the increased prevalence of mental health and substance use disorders.   

Employers sponsoring health plans for their employees have been quick to recognize the mental health crisis, and in many cases, these employers have voluntarily increased their coverage of mental health and substance use disorder (“MH/SUD”) benefits and/or broadened their network of providers to treat mental health and substance use disorders. 

Congress and both the Trump and Biden Administrations have also responded to the onset of the mental health crisis by passing legislation and promulgating regulations that, for example, made it easier for Medicare beneficiaries and employees and their families to access tele-mental and tele-behavioral services, as well as prescription drugs and other medications to treat anxiety and depression. 

On July 25, the Biden Administration took yet another step toward increasing access to MH/SUD benefits by issuing proposed regulations governing parity between MH/SUD benefits and medical and surgical (M/S) benefits covered under an employer-sponsored health plan.   

What Did the Proposed Mental Health Parity Regulations Say? 

The proposed rule would make clear that self-insured and fully insured health plans need to evaluate the outcomes of their plans’ coverage of MH/SUD benefits to make sure that participants have equivalent access between their MH/SUD benefits and M/S benefits. This includes evaluating, among other things, the plans’ provider networks, how much it pays out-of-network providers, and, for example, how often prior authorization is required and the rate at which prior authorization requests are denied.   

More specifically, a plan sponsor would be required to collect claims data (e.g., claims paid and claims denied) for purposes of determining the impact of a Non-Quantitative Treatment Limitation (“NQTL”) on access to MH/SUD benefits relative to access to M/S benefits (note, an NQTL is a limitation or restriction you can’t count like prior authorization, medical management tools, step therapy, utilization review, and concurrent review).   

Then, the plan must evaluate the claims data to determine outcomes, and the plan would then be required to analyze – based on these outcomes – whether there is a material difference in access to MH/SUD benefits as compared to M/S benefits. If the plan determines that there is indeed a material difference in access between benefits, the plan must take specific action to address (i.e., fix) the material differences in access. 

The proposed regulations would also require a plan to include a significant amount of new information in a plan’s NQTL “comparative analysis” so the Federal Departments and State regulators can undertake their own evaluations to determine whether the plan is complying with the proposed requirements, and thus, offering the appropriate level of access to MH/SUD benefits as compared to M/S benefits. 

Impact on Employer-Sponsored Coverage and Access to MH/SUD Benefits 

It is important to emphasize that employers voluntarily offer health benefits – including MH/SUD benefits – to attract and retain talented workers and to keep their employees healthy and productive.  In addition, most employers pride themselves on the type and level of benefits they offer and the care they exhibit for their workforce. 

In response to these proposed regulations, however, the employer community is concerned that the regulatory burden that is required to be compliant with the law will have the opposite effect on increasing access to MH/SUD benefits. This is due in large part to the fact that the employer community largely believes that the proposed requirements are unworkable and efforts to even attempt to comply will be extremely costly.   

Some employers are even suggesting that the proposed requirements may force them to re-think the type and level of their plans’ coverage of MH/SUD benefits. Any shift in coverage is not necessarily because employers want to adopt changes to their current coverage, but employers are concerned that they may have no other choice due to the unworkability of and the cost associated with the proposed rules. 

Stakeholders Will Weigh In 

Public comments on the proposed regulations are due October 17, and stakeholders on both sides of these issues will certainly have a lot to say on whether these proposed requirements should or should not be finalized.   

The Biden Administration – after a thorough review of the comments received – will then have to determine the appropriate next steps: Whether to scrap the proposed rules, finalize the rules as is, or do something in between. Stay tuned… 


The information provided does not, and is not intended to, constitute legal advice; instead, all information and content herein is provided for general informational purposes only and may not constitute the most up-to-date legal or other information.