This case study showcases the implementation of the nation’s first comprehensive NQTL analysis, creating a robust compliance framework that protects health plan sponsors from mental health parity scrutiny and potential regulatory deficiencies.
Leading the Nation in MHPAEA Compliance
Client: Group Health Plan Client
Group Health Plan Client, sponsoring a health plan offering mental health benefits, must comply with the Mental Health Parity and Addiction Equity Act (MHPAEA) by preparing a comparative analysis demonstrating parity between mental health/substance use disorder (MH/SUD) and medical/surgical benefits. This non-quantitative treatment limitation (NQTL) analysis is required on demand by DOL, IRS, or HHS. Hall Benefits Law (HBL) conducted the nation’s first such analysis for this client in April 2022, reviewing rules, data, and standards to ensure compliance, document efforts, and create a reusable template praised by colleagues, with annual updates ongoing.
THE CHALLENGE
MHPAEA demands detailed parity analyses, but providers often withhold necessary data, risking deficiencies if agencies request the report. As fiduciaries, sponsors face penalties for non-compliance or incomplete analyses, especially without precedents for NQTL evaluations amid evolving enforcement.
THE TURNING POINT
To proactively position for regulatory scrutiny, the client engaged ERISA experts for a comprehensive NQTL analysis—the first known nationwide. Without this, potential data gaps could expose deficiencies attributable to the sponsor, prompting HBL’s involvement to mitigate risks through thorough documentation.
THE SOLUTION
HBL partners Tim Kennedy and Anne Tyler Hall reviewed MHPAEA regulations, third-party/provider data (MH/SUD and medical/surgical), factors, and implementation standards to assess parity. They documented all data requests to show deficiencies stemmed from providers, not sponsor oversight, and developed a template for firm-wide use in compliant plan designs.
Our Results
First NQTL Analysis Completed
Mitigated over $10 million in IRS and DOL penalties through a $53,700 settlement, including $10,000 in sanctions and $43,700 in taxes.
Parity Demonstrated
Evaluated benefits to confirm MH/SUD parity with medical/surgical, addressing regulatory requirements.
Documentation Safeguards
Recorded data requests to protect against deficiencies, attributing gaps to providers.
Template Innovation
Created a comprehensive MHPAEA template in April 2022, leveraged firm-wide with annual updates.
WHY IT MATTERS
MHPAEA enforcement intensifies, demanding proactive parity analyses to avoid penalties. This case illustrates how specialized reviews can fulfill obligations, shield fiduciaries from blame, and innovate tools for broader compliance, essential as agencies increase scrutiny on mental health benefits.
ABOUT HBL
Hall Benefits Law (HBL) is a boutique ERISA and employee benefits law firm helping employers design and defend retirement and health plans. With offices nationwide, HBL advises on M&A benefits, ESOPs, executive compensation, and compliance, and drives savings and transparency through TPA and PBM negotiations. Firm clients have realized over $400MM+ in penalty abatements and multimillion-dollar annual plan savings.