Achieving Mental Health Parity: Your Guide to NQTL Compliance

Michael Berman

Michael Berman, FSA, MAA, Director, Actuarial Solutions

April 5th 2024

The Mental Health Parity and Addiction Equity Act (MHPAEA) aims to ensure your employees have access to mental health and substance use disorder (MH/SUD) benefits at a level that is not more restrictive than the health plan’s coverage of medical/surgical benefits. However, demonstrating compliance, especially around Non-Quantitative Treatment Limitations (NQTLs), can be a significant hurdle. Let’s explore NQTLs, the common obstacles in analyzing them, and how to get the help you need for a successful outcome.

What are NQTLs & Why Do They Matter?

NQTLs are plan restrictions that impact the ability of plan members to access certain types of medical care without a clinical review process. Examples of NQTL’s include inpatient prior authorization, prescription drug step therapy, concurrent care reviews, or provider network restrictions. The Mental Health Parity legislation mandates that NQTLs for MH/SUD benefits cannot be more restrictive than those for comparable medical/surgical benefits.  Self-insured employers are required to illustrate parity via a comparative analysis that has been prescribed by the United States Department of Labor (DOL).

The Challenge of Comparative Analysis

The real difficulty lies in proving parity. This requires a detailed comparative analysis – examining how all your NQTLs are adjudicated across both MH/SUD and medical/surgical benefits on both an “as written” and “as applied” basis; many employers stumble here. Recent enforcement data indicates that the DOL has found employer MPHAEA comparative analysis’ to be deficient in illustrating parity for MH/SUD benefits.  Self-insured employers must be ready to provide the DOL with a compliant comparative analysis to avoid potential penalties and other enforcement actions. This underscores the complexity of navigating MHPAEA compliance and the need for specialized support.

Navigating the Path to Compliance: Don’t Get Lost in the Maze

While a comparative analysis may seem daunting, there are clear steps you can take to ensure it is completed accurately and efficiently:

  • Understand the Nuances. Each NQTL must be carefully evaluated, and it’s not just about the wording of a benefit plan restriction. You need to analyze how the plan administrator adjudicates the NQTL in practice.
  • Gather Data. This means having systems to track the degree to which each NQTL applies to medical/surgical claims to evaluate whether the DOL’s “substantially all” test has even been met to assess whether the NQTL can be applied to MH/SUD claims. Employers must also measure approval rates, reasons for denials, network adequacy, and other relevant metrics depending on the specific NQTL being tested.
  • Seek Expertise. MHPAEA specialists can guide your analysis, ensuring it meets the rigor required and helping you avoid the pitfalls many plans fall into.


The Benefits of Getting It Right: More Than Just Checking a Box

Achieving MHPAEA compliance through a robust NQTL analysis isn’t just about avoiding penalties. Here’s what you gain by getting it right:

  • Equitable Care demonstrates a commitment to providing mental health care without unnecessary barriers—fostering a positive and supportive work environment for your employees.
  • Cost Management avoids enforcement actions, which saves time, money, and the hassle of revisions. Proactive compliance can also help identify areas for streamlining your benefit plan administration.
  • A Healthy Workforce improves access to MH/SUD services and ultimately benefits your employees’ well-being and overall productivity. A healthy workforce translates to lower absenteeism and higher engagement, ultimately boosting your bottom line.


Davies Is Your Partner in Compliance

At Davies, we understand the complexities of NQTLs. Our team offers in-depth knowledge and analytical tools to help you conduct a robust comparative analysis. We don’t just help you meet the law; we help create benefit plans that truly serve your people.

Want to learn more about ensuring NQTL parity for your plan? Get in touch with Michael Berman at

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