DOL Issues New Guidance on Mental Health Parity Rules Enforcement
The Mental Health Parity and Addiction Equity Act (MHPAEA) requires group health plans that offer mental health or substance use disorder benefits to provide those benefits on terms that are no restrictive than medical/surgical benefits. That’s the “parity” part of the law. One of the key requirements is that plans complete a written analysis of a plan’s non-quantitative treatment limitations (NQTLs) to ensure that the plan is operating in parity. NQTLs are the non-numerical limits or restrictions a plan may place on coverage relating to mental health or substance abuse. (Quantitative limitations, QTLs, such as deductibles or visit limits are much easier to measure and determine whether they are on par with the numerical limitations placed on medical/surgical benefits). NQTLs involve the processes and standards used to determine whether a service will be covered. Common examples include prior authorization requirements, medical necessity criteria, provider credentialing standards, drug formularies and restrictions relating to provider specialty.
The Department of Labor (DOL) recently issued Field Assistance Bulletin 2026-03 (FAB 2026-03), providing new guidance on how it intends to enforce NQTL requirements. Earlier this year, the DOL announced its inclusion of these mental health parity rules in its annual list of enforcement agenda items and has now followed that up with more specific guidance in this recent Bulletin. It’s a little confusing because it was previously announced that certain provisions of the 2024 Final Rule would not be enforced. However, the underlying statutory requirement to perform and document NQTL comparative analyses remains in effect. What follows is a reminder of a self-funded plan’s NQTL analysis obligations, as well as where the DOL intends to focus its enforcement.
What are QTLs and NQTLs?
Quantitative Treatment Limitations (QTLs) are numeric benefit limits, like:
Restrictions on numbers of provider visits
Day limits on facility stays
Deductibles, coinsurance, copayments, and any other financial limitations
Non-quantitative Treatment Limitations (NQTLs) are non-numeric limits on benefits, such as:
Medical necessity criteria
Formulary design
Prior authorization requirements
Network reimbursement rates
Provider network limitations
What does the MHPAEA require?
MHPAEA requires plans to ensure that the processes, strategies, evidentiary standards, and factors used to design and apply NQTLs to mental health/substance use disorder benefits are comparable to, and applied no more stringently than, those used for medical/surgical benefits. Importantly, parity must exist both “as written” in plan documents and “in operation” through actual administration.
Who is responsible for MHPAEA compliance?
For self-funded plans, the employer plan sponsor is legally responsible and must produce the NQTL comparative analysis if requested by participants or the DOL. Vendors (TPAs, PBMs, Networks, etc.) may supply data, but do not assume compliance responsibility.
For fully-insured plans, the insurance carrier is responsible for MHPAEA compliance, including completing the NQTL analysis.
What does a compliant self-funded plan look like?
A compliant self-funded plan must be able to:
Demonstrate that their QTLs are not more restrictive for mental health/substantive use disorder benefits than they are for medical/surgical benefits
Produce written NQTL comparative analysis that includes:
Description of each NQTL and the factors/evidentiary standards used in the application of each NQTL
An explanation of how each factor/evidentiary standard is used to apply each NQTL
An analysis demonstrating that the plan’s NQTLs are not applied more stringently to mental health/substantive use disorder benefits than to medical/surgical benefits as written and in operation
A summary of any actions taken by the plan (or will take) to address areas of noncompliance
Where do self-funded plans typically fail or struggle to comply?
Failure to complete NQTL analysis or be able to produce the results on demand
Insufficient factors/evidentiary standards to support the use of the NQTL
Why this matters:
The DOL is actively requesting plans to provide these analyses in MHPAEA audits and as part of other investigations
Plans must be able to produce documentation upon request to the DOL or plan participants, often within 10 days of the request
New Enforcement Guidelines
Under the new guidance, the DOL will focus its enforcement efforts on three NQTL categories that it believes present the greatest potential for participant harm:
Separate treatment limitations and exclusions affecting mental health & substance use disorder benefits
Medical necessity standards and utilization management practices, and
Network adequacy, provider admission standards, and reimbursement methodologies.
The DOL also emphasized that it will review not only plan language, but also how plan provisions operate in practice, including the use of operational data, claims adjudication techniques and participant complaints.
For self-funded plan sponsors, the guidance provides a useful opportunity to reassess existing comparative analyses against a clearer enforcement framework. Plan sponsors should consider complying with the written NQTL comparative analysis requirement and, most certainly, understand the risks of their plans incorporating any coverage limitations or access restrictions for mental health/substance use disorder benefits that aren’t in place for medical/surgical benefits. Please contact your C&B team for more information about the comparative analysis process, your specific plan’s coverage limitations and additional MHPAEA compliance resources.