Acronyms
non-quantitative treatment limitations
(NQTLs)
mental health and substance use disorder
(MH/SUD)
The Mental Health Parity and Addiction Equity Act
(MHPAEA)
Consolidated Appropriations Act
(CAA)
Since 2021, employers that offer group health plans have been required to complete an analysis to determine whether a plan’s design and application of non-quantitative treatment limitations (NQTLs) are more stringent for mental health and substance use disorder (MH/SUD) benefits than for medical/surgical benefits. A final rule released in September 2024 by the Departments of Labor, Treasury and Health and Human Services (collectively, the departments) that implements substantive requirements for NQTL analyses has been the subject of ongoing litigation. In a recent court filing, the departments announced that they do not intend to defend or enforce the 2024 final rules and will propose replacement rules by the end of the year. While the rules are yet to be determined, the underlying statutory requirement to conduct and provide an NQTL analysis upon request remains in effect.
Current Requirements
The Mental Health Parity and Addiction Equity Act (MHPAEA) generally requires group health plans to ensure that any financial requirements and treatment limitations placed on the MH/SUD benefits they provide are no more restrictive than those placed on medical/surgical benefits. The MHPAEA does not require plan sponsors to cover MH/SUD benefits; however, if they do, those benefits must be at parity with medical/surgical benefits.
Plans must perform an analysis demonstrating parity in each of these six benefits classifications:
- Inpatient, in-network benefits
- Inpatient, out-of-network benefits
- Outpatient, in-network benefits
- Outpatient, out-of-network benefits
- Emergency care benefits
- Prescription drug benefits
The 2021 Consolidated Appropriations Act (CAA) amended the MHPAEA to require health plans to produce an analysis that compares NQTLs for MH/SUD with those applied to medical/surgical benefits. Plans must be prepared to provide an NQTL comparative analysis upon request from the departments or plan participants. Prior to the enactment of the 2021 CAA, the departments recommended that plans analyze NQTLs and maintain documentation as a best practice; it is now a requirement.
Each comparative analysis must:
- Describe the plan or coverage terms regarding the NQTL.
- Identify the factors used to determine that the NQTL will apply.
- Provide the evidentiary standards used for the factors identified.
- Demonstrate that the strategies used to apply the NQTL to MH/SUD benefits are comparable to medical/surgical benefits.
- State specific conclusions and results of the analysis.
The 2021 CAA requires government auditors to request NQTL comparative analyses from at least 20 different plans each year. The departments must annually submit a report to Congress, summarizing their efforts to collect comparative analyses as well as any findings with respect to noncompliance. The 2025 report to Congress identified prior authorization and utilization review, network adequacy and NQTL documentation as the most common areas of noncompliance.
Trump administration to draft new rules
In 2024, the Biden administration finalized rules defining terms and standards to be used in the comparative analyses. The rules included a mandate that plans provide “meaningful benefits” for MH/SUD in every benefit classification in which medical/surgical are also provided. It also required fiduciaries to certify that they have satisfied their fiduciary obligation to prudently select and monitor a plan service provider to perform the NQTL comparative analysis.
The ERISA Industry Committee, an industry trade group representing large employers, filed a lawsuit challenging the 2024 final rules as exceeding the MHPAEA’s statutory requirements. Additionally, this lawsuit was filed around the same time that the Trump administration released an executive order announcing a broader deregulatory focus for government agencies. In a March 30, 2026, court filing, the departments indicated they will not defend the 2024 final rules and will prioritize new rules as part of their spring 2026 regulatory agenda.
Moving forward
As we await new regulations from the departments, the underlying statutory requirements remain in effect, including the requirement to provide an NQTL comparative analysis upon request. The 2023 CAA eliminated the MHPAEA opt-out provision for self-funded, non-federal governmental group health plans, so these requirements extend to state and local governments as well. The departments have indicated that the new rules will include “significant revisions” and that they will provide a joint progress update by September 30, 2026.
From a pharmacy perspective, pharmacy benefit managers will provide plans with an NQTL analysis as to the plan’s prescription drug formulary development and structure. Plan sponsors must coordinate with all of their plan service providers to ensure MHPAEA compliance and document their NQTL comparative analyses. Employers Health will continue to monitor these regulations and provide updates when necessary.
For more information, please contact, Madison Connor at [email protected].
