# NQTLs and mental health parity. What employers must document, and what is on hold.

Source: https://ethosbenefits.com/benefits-101/mental-health-parity-nqtl
Type: Benefits 101
Topic: Compliance rules and deadlines
Author: Chelsea Ryckis, Founder and President
Reviewed by: Patrick Ansara, Partner and Director of Client Operations
Publisher: Ethos Benefits
Published: 2026-03-04
Last updated: 2026-11-03
Cite as: "NQTLs and mental health parity," Ethos Benefits, https://ethosbenefits.com/benefits-101/mental-health-parity-nqtl, updated 2026-11-03.

**Short answer:** An NQTL, or nonquantitative treatment limitation, is a non-numeric limit on benefits, such as prior authorization, step therapy or network admission standards. Since February 10, 2021, group health plans covering mental health or substance use disorder benefits must keep a written comparative analysis of each NQTL and produce it when regulators or participants ask.

## What is an NQTL?

An NQTL, or nonquantitative treatment limitation, is any limit on mental health or substance use disorder (MH/SUD) benefits that is not expressed as a number. It shapes who can get care, from whom, and for how long. Plans use NQTLs to manage utilization and cost.

The Mental Health Parity and Addiction Equity Act (MHPAEA) does not ban NQTLs. It requires that the processes, strategies, evidentiary standards and other factors behind an NQTL on MH/SUD benefits be comparable to, and applied no more stringently than, those behind the same kind of limit on medical and surgical benefits. That test applies both to how the limit is written and how it works in practice.

## What is the difference between a QTL and an NQTL?

A quantitative treatment limitation (QTL) is a number: a visit cap, a day limit, a copay or a deductible. Parity for QTLs is a math test. An NQTL is a rule or process, so parity has to be shown through documentation and data.

| | Quantitative (QTL) | Nonquantitative (NQTL) |
|---|---|---|
| **What it is** | A numeric limit on scope or duration, or a cost share | A non-numeric rule or process that limits scope or duration |
| **Examples** | 20 outpatient visits per year; 30 inpatient days; $40 copay; deductibles and out-of-pocket maximums | Prior authorization; concurrent review; medical necessity criteria; step therapy (fail-first); network admission standards; provider reimbursement methods; formulary design; facility type, geographic and licensure limits |
| **How parity is tested** | Compare the numbers against those that apply to substantially all medical and surgical benefits in the same classification | Compare the factors, evidentiary standards and processes, as written and in operation |
| **What proves it** | The plan's benefit schedule | A written NQTL comparative analysis, backed by data |

The six benefit classifications used for these comparisons are inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care and prescription drugs.

## What is an NQTL comparative analysis?

An NQTL comparative analysis is the written, plan-specific proof that each NQTL on MH/SUD benefits meets the parity test. The Consolidated Appropriations Act, 2021 (CAA) added it to the parity statute. Any group health plan or insurer that covers both medical and surgical and MH/SUD benefits, and imposes NQTLs on the MH/SUD side, must perform and document the analysis. That includes [self-funded](https://ethosbenefits.com/benefits-101/self-funded-health-insurance), [level-funded](https://ethosbenefits.com/benefits-101/level-funded-health-insurance) and fully insured plans.

**When it must be produced:** beginning February 10, 2021 (45 days after the CAA was enacted on December 27, 2020), the analysis must be available to the Department of Labor, HHS or the Treasury on request. The Departments' FAQs Part 45 add that it must also be available to participants, beneficiaries and their authorized representatives on request.

Under the statute, the analysis must cover:

1. **The NQTL and the benefits it applies to,** in each classification.
2. **The factors** used to decide the NQTL applies to MH/SUD and medical and surgical benefits.
3. **The evidentiary standards** behind those factors, and any other sources relied on.
4. **The comparison** showing the processes, strategies and standards for MH/SUD benefits are comparable to, and no more stringent than, those for medical and surgical benefits, as written and in operation.
5. **Findings and conclusions,** including whether the plan complies.

The FAQs are clear that a general statement of compliance, a stack of documents with no explanation, or a recital of the legal standard does not meet the requirement. The analysis has to be specific, reasoned and tied to your plan. It should also show the date it was prepared and who prepared it.

If the Department finds the analysis insufficient, it specifies what is missing. If it finds a violation, the plan has 45 days to submit corrective actions and a new analysis. After a final finding of noncompliance, the plan must notify all enrolled individuals within 7 days.

## Is the 2024 parity rule being enforced?

Not its new provisions. The 2024 rule is in effect on paper but not being enforced for its new provisions, and the Departments plan to replace it. The 2013 rule and the CAA analysis requirement are still enforced.

| Date | What happened |
|---|---|
| November 2013 | Final MHPAEA rule issued. Still the baseline regulation today. |
| February 10, 2021 | CAA comparative analysis requirement takes effect. |
| September 9, 2024 | Departments release a new final rule (published September 23, 2024), with parts applying to plan years beginning on or after January 1, 2025, and others on or after January 1, 2026. |
| January 17, 2025 | The ERISA Industry Committee (ERIC) sues to challenge the 2024 rule in federal court in Washington, D.C. |
| May 15, 2025 | Departments announce they will not enforce the parts of the 2024 rule that are new compared with the 2013 rule, for violations before a final decision in the ERIC case plus 18 months, while they reconsider the rule. |
| March 30, 2026 | In a joint status report in the ERIC case, the Departments say they will not defend the 2024 rule and will issue a new proposed rule no later than December 31, 2026. |
| September 8, 2026 | EBSA issues Field Assistance Bulletin 2026-03, restating the nonenforcement policy and naming its NQTL enforcement priorities. |

**On hold:** the provisions the 2024 rule added. These include the "meaningful benefits" standard, the ban on discriminatory factors and evidentiary standards, the outcome data evaluation requirements, and the rule's more detailed comparative analysis content and timing requirements, such as producing the analysis within 10 business days of a Department request and, for ERISA plans, a named fiduciary certification about service provider oversight.

**Still enforced:** the parity statute as amended by the CAA, including the comparative analysis requirement, and the 2013 rule. The May 2025 statement says plans may keep relying on the 2013 rule, the FAQs Part 45 and other existing guidance.

**Where DOL is focusing:** Bulletin 2026-03 says EBSA will concentrate NQTL investigations on three areas:

1. **Separate treatment limits and exclusions,** especially blanket exclusions that apply only to MH/SUD benefits.
2. **Medical necessity standards and review,** including prior authorization, concurrent review and retrospective review. Plans and their service providers must make the clinical guidelines available on request to investigators and to participants.
3. **Network adequacy,** including network admission standards and provider reimbursement methods, so participants are not pushed to out-of-network care for lack of in-network MH/SUD providers.

EBSA may still look at other NQTLs, particularly when a participant complains. A new proposed rule may change parts of this again, so check the status before your next plan year.

## What are the most common NQTL gaps?

Most problems come from thin documentation or from rules that look equal on paper but work differently in practice.

- **No plan-specific analysis.** A generic vendor template that does not describe your plan's actual NQTLs.
- **Written policy only.** An analysis that compares policy language but has no operational data, such as approval and denial rates.
- **Heavier review for MH/SUD care.** Prior authorization or concurrent review required more often, or with stricter criteria, for MH/SUD services than for comparable medical services.
- **Network and reimbursement gaps.** Lower reimbursement or tougher admission standards for MH/SUD providers, with no reasoned justification, leading to thin networks.
- **Stricter fail-first rules.** Requiring participants to fail lower-intensity MH/SUD treatment before covering residential or other higher levels of care, when no comparable rule applies on the medical side.
- **Stricter licensure or facility rules.** Requirements for MH/SUD facilities and clinicians that go beyond what the plan requires of comparable medical providers.

## How do you prepare an NQTL comparative analysis?

Employers prepare the analysis by inventorying each NQTL, documenting the factors behind it, and testing it against plan data with their vendors' help.

1. **Inventory your NQTLs.** List each one, such as prior authorization, concurrent review, medical necessity criteria, step therapy and network admission standards, by benefit classification. Pull the plan documents and vendor policies that define each.
2. **Collect factors and evidence.** For each NQTL, document why it applies to a benefit (for example, cost or variation in care), the data behind that factor and the clinical guidelines used.
3. **Compare as written and in operation.** Set MH/SUD and medical and surgical processes side by side, then test them with claims and authorization data.
4. **Document findings and fixes.** State whether each NQTL complies, and record corrective steps for any gap.
5. **Coordinate your vendors.** Your carrier, TPA, PBM and any behavioral health vendor hold most of the data. Put their obligation to supply plan-specific analyses and data in writing, and keep records of what they provide.
6. **Review it every year.** Update the analysis when the plan, a vendor or the rules change, so it is current whenever a request arrives.

Ethos Benefits coordinates the NQTL comparative analysis with your vendors as part of [mental health parity](https://ethosbenefits.com/services/mental-health-parity) support.

## On the podcast

- [Employer Health Coalitions and Smarter Purchasing: With Karen van Caulil](https://ethosbenefits.com/podcast/employer-health-coalitions-karen-van-caulil), The Business of Benefits, Episode 86

## Frequently asked questions

### What is mental health parity?

Mental health parity is the federal rule, under the Mental Health Parity and Addiction Equity Act, that a group health plan covering mental health or substance use disorder benefits cannot limit them more strictly than medical and surgical benefits. That covers numeric limits like copays and visit caps, and nonnumeric rules like prior authorization, in each benefit classification.

### Who enforces mental health parity for employer plans?

The Department of Labor enforces parity for private employer plans under ERISA, the Department of Health and Human Services handles non-federal governmental plans, and the Treasury enforces it through the Internal Revenue Code excise tax. State insurance regulators also enforce parity for insured coverage. The three federal Departments issue the rules and guidance together.

### Is the NQTL comparative analysis still required while the 2024 rule is not being enforced?

Yes. The comparative analysis requirement comes from the Consolidated Appropriations Act, 2021, which amended the parity statute, and the Departments have said those statutory obligations continue to apply. Only the parts of the September 2024 rule that are new compared with the 2013 rule are covered by the nonenforcement policy.

### Can a TPA, PBM or utilization management vendor create NQTL risk for our plan?

Yes. Vendors often design and run the prior authorization, medical necessity and network rules that are the NQTLs. If those rules are stricter for mental health or substance use disorder benefits, the plan has a parity problem even though a vendor wrote them.

### Can employees ask to see the comparative analysis?

Yes. The Departments' FAQs say plans must make the comparative analyses available to participants and beneficiaries, or their authorized representatives such as a provider, on request. Claimants appealing a denial can also get relevant documents free of charge. Employers should keep the analysis current so they can respond promptly.

### What happens if a plan cannot produce an adequate NQTL analysis?

The Department of Labor will tell the plan what is missing, and if it finds a violation the plan has 45 days to correct it. A final finding of noncompliance means the plan must notify every enrolled person within 7 days, and employer plans can also face the Internal Revenue Code excise tax, generally $100 per day for each affected person.

### Are small employers exempt from mental health parity?

Yes, under federal parity law. Group health plans of employers with an average of 50 or fewer employees in the prior calendar year are exempt, as are retiree-only plans and plans made up only of excepted benefits. State insurance law and ACA rules for insured small-group coverage can still require parity, so confirm before relying on the exemption.

## Sources

1. [29 U.S. Code § 1185a, Parity in mental health and substance use disorder benefits](https://www.law.cornell.edu/uscode/text/29/1185a), Legal Information Institute, Cornell Law School
2. [Statement regarding enforcement of the final rule on requirements related to MHPAEA (May 15, 2025)](https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/mental-health-parity/statement-regarding-enforcement-of-the-final-rule-on-requirements-related-to-mhpaea), U.S. Departments of Labor, Health and Human Services, and the Treasury
3. [Field Assistance Bulletin No. 2026-03, MHPAEA NQTL enforcement (September 8, 2026)](https://beta.dol.gov/policy-regulations/reference-materials/guidance-searches/ebsa-field-assistance-bulletin-no-2026-03), U.S. Department of Labor, Employee Benefits Security Administration
4. [FAQs About Mental Health and Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021 Part 45](https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-45), U.S. Departments of Labor, Health and Human Services, and the Treasury
5. [Requirements Related to the Mental Health Parity and Addiction Equity Act (final rules, 89 FR 77586)](https://www.federalregister.gov/documents/2024/09/23/2024-20612/requirements-related-to-the-mental-health-parity-and-addiction-equity-act), Federal Register
6. [Fact Sheet: Final Rules under the Mental Health Parity and Addiction Equity Act](https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rules-under-the-mental-health-parity-and-addiction-equity-act-mhpaea), U.S. Department of Labor, Employee Benefits Security Administration