The Release of the Final Rules to Bolster the Mental Health Parity and Addiction Equity Act

On September 9, 2024, the U.S. Department of Health and Human Services, Department of Labor, and Department of the Treasury, collectively, released the final rules of the Mental Health Parity and Addiction Equity Act (MHPAEA). The objective of the MHPAEA final rules is to help combat the significant public health concerns surrounding mental health in the United States. One of the major driving forces behind the new rules concerns the climbing cost and access to healthcare as it pertains to mental health and substance abuse treatment.

History of the Mental Health Parity Act

In 1996, the Clinton Administration passed the Mental Health Parity Act (MHPA). Although limited in scope, it mandated that large group health plans could no longer provide annual/lifetime dollar limits that were more favorable to medical and/or surgical benefits as opposed to mental health benefits. The two types of care were required to be on equal footing. Then, in 1999, President Clinton ordered equality in mental health and substance abuse treatment within the Federal Employees Health Benefits Program. However, despite President Clinton’s efforts in advancing mental health and substance abuse treatments, a 2000 report from the U.S. General Accounting Office (GAO) indicated many employers had adopted “newly restrictive” mental health benefit design features in an attempt to circumvent the 1996 federal law.

Following the GAO report, President Obama worked to pass the Mental Health Parity and Addiction Equity Act (MHPAEA) in 2008. This new law expanded the 1996 MHPA law to include substance abuse treatment and required “out-of-network behavioral health benefits to be ‘on par’ with medical and surgical coverage.” It further required that any restrictions could not have larger financial requirements, and no further treatment limitations could be imposed, etc. Finally, the MHPAEA established the minimum requirements with which the states were required to comply; however, as with other federal laws, a state could impose stricter requirements than the minimal requirements established by the federal act.

In 2013, final regulations were released pertaining to the 2008 MHPAEA law that required that the law extend to group plans and insurance issuers.

Final regulations of the 2008 MHPAEA law were released in 2016 as well, to cover Medicaid Managed Care Organizations the Children’s Health Insurance Program.

During President Trump’s first term in office, the Consolidated Appropriations Act was enacted. It amended the MHPAEA to require the following: (1) almost all commercial health plans must conduct a compliance analysis, (2) health plans must provide their compliance findings to a requesting enrollee or to any state or federal regulator who so requested the findings, and (3) the United States Department of Health and Human Services would review the analysis conducted by the insurers and develop an action plan for insurers who were in violation of the MHPAEA. The Consolidated Appropriations Act also required that any insurer who was out of compliance would be required to notify their enrollees.

Subsequently, in 2022, the Biden Administration issued a MHPAEA report to Congress that outlined the findings of the compliance analysis mandated by President Trump’s Administration. Finally, in 2024, the final rules were released by the Biden Administration in an attempt to strengthen the implementation of the MHPAEA.

What is the Mental Health Parity and Addiction Equity Act (MHPAEA)?

Before addressing the importance of the MHPAEA, it is important to understand the purpose and structure of the MHPAEA. As mentioned, the bare bones of the law were enacted in 2008 to place mental health and substance use services on the same footing as medical and surgical benefits. It was the federal government’s means of attempting to prohibit discrimination when it came to the varying treatments an insurance enrollee might need and to ensure the insurer was not placing undue restrictions on the enrollee’s ability to access benefits for mental health and substance use treatment. This meant insurers could no longer charge more for mental health and substance use treatment than would otherwise be charged for medical and/or surgical benefits. In a nutshell, all treatment needed to be equally accessible.

Unfortunately, the MHPAEA does not require group health plans or health insurance to cover mental health and substance use benefits. Such protections are, however, required under the Patient Protection and Affordable Care Act (PPACA). Under PPACA, mental health and substance use benefits are one of the basic categories of essential health benefits (EHB) that state-regulated health insurance issuers are required to cover (though not group health plans that are not regulated by state law). So these laws work in concert to make mental health and substance use treatment accessible to essentially all enrollees.

United States Mental Health and Substance Use Statistics

Although the MHPAEA’s goal was to make mental health and substance use treatment more accessible, that goal has not been easily achieved. Even now, 16 years after its initial enactment, many enrollees continue to encounter numerous obstacles when attempting to access their mental health and/or substance use benefits. These obstacles gained heightened government scrutiny during the COVID-19 pandemic, when demand for both mental health and substance use treatment soared. In fact, from August 2020 to February 2021, the number of adults experiencing anxiety/depression increased from 36.4% to 41.5%. In 2022, it was estimated that nearly 25% of adults were living with a mental illness.

In addition to mental health concerns, in 2022, nearly 54.6 million people in the United States aged 12+ were classified as needing substance use treatment, while only roughly 24% received any treatment. Between 2019–2021, the average number of monthly overdose deaths for people aged 10–19 increased 109% and deaths involving fentanyl increased 182%.

Due to the increasing demands for both mental health and substance abuse treatment, the Departments of Labor, Health and Human Services, and Treasury worked together to release the final rules to implement MHPAEA requirements last September.

How do the “Final Rules” Affect the Existing MHPAEA?

The million-dollar question is now: What exactly do these “final rules” do? Ultimately, the goal of these final rules is to require health insurers to cover mental health and substance use treatment as if it were any other health care need. According to the federal government, these final rules make this goal explicit. Specifically, the final rules:

1. Make it abundantly clear that enrollees will not be impeded by obstacles when accessing mental health and/or substance use treatment, as compared to when they seek to utilize their medical and/or surgical benefits;

2. Emphasize that health plans and insurers cannot use non-quantitative treatment limitations (NQTLs) that are more restrictive than the NQTLs that are imposed on medical and/or surgical benefits. (NQTLs are requirements that insurers may impose on an enrollee that could limit the scope/duration of benefit access. These generally include prior authorizations, medical management techniques, provider approval, etc.);

3. Require that plans and insurers now must collect and evaluate data and take reasonable action as needed to remedy material differences when an enrollee’s access to mental health and substance use treatment and the data collected indicate that NQTLs are contributing to such material differences;

4. Specify that health plans and insurers may not utilize discriminatory information, evidence, sources, or standards that would “systematically disfavor or are specifically designed to disfavor access to mental health and substance use disorder benefits when designing their NQTLs”; and

5. Implement the sunset provision for self-funded non-federal governmental plan elections to opt out of compliance with MHPAEA.

Although these are the stated purposes of the final rules, the main focus of these rules appears to be on NQTLs and the discriminatory fashion in which they were utilized in the past, which has severely hindered access to mental health and substance use disorder treatment. The Assistant Secretary for Employee Benefits Security, Lisa Gomez, stated that “the final rules are critical steps forward to making sure that people in need of services can get the care needed without jumping through hoops that they don’t face when trying to get medical or surgical care.”

With focus on the NQTLs and the requirement of comparative analyses, the goal is to identify the catalyst for shortfalls in access and repair the related issues to ensure compliance with MHPAEA. Once these shortfalls are identified, “reasonable action” must be taken, which the federal government claims would depend on the circumstances. To determine what would be reasonable given the circumstances, the health plan/insurer would need to analyze the specific NQTL itself, the data obtained, the extent of the material differences and the impact of such differences as it pertains to access for the enrollees and their beneficiaries. Like many legal problems, “it depends” seems to be the crux of what will and will not be considered reasonable action. Given the lack of a definitive explanation of what qualifies as “reasonable action,” there has been inevitable pressure to make definite and certain what is required to maintain compliance with MHPAEA.

Insurance Company Pushback

Although the goal of the final rules of the MHPAEA is to make mental health and substance use disorder treatment more accessible, insurers, AHIP (health insurance trade association), and the ERISA Industry Committee (ERIC) pushed back on the rules’ implementation. In a letter to the Secretaries of Health and Human Services, Treasury, and Labor prior to implementation of the final rules, AHIP stated that the final rules would actually hinder access to mental health and substance use disorder treatment. AHIP further argued the problem is actually that there are not enough mental health and substance use disorder treatment providers and what is truly necessary to solve the problem is to expand telehealth, maximize and expand behavioral health networks, integrate behavioral health with physical healthcare, and end the stigma surrounding these types of treatments.

In criticism of the final rules, AHIP continued, cautioning “against an inefficient, vague, an excessive approach that prioritizes analyses of health care coverage over access to health care itself.” The letter concluded with a warning that the final rules would exacerbate accessibility problems by making it more expensive, less equitable, and, therefore, less accessible by forcing these insurers and health plans to now utilize their resources to conduct the required analyses. In addition to its concerns about the resources that would now be required to maintain compliance, AHIP argued the final rules are not constitutional and are too vague to be implemented by the required entities.

Similarly, ERIC also opined the new regulations would be “overly burdensome to employer-sponsored health benefit plans; be confusing, costly, and impossible to comply with; and subject millions of employees and their families to higher healthcare costs and changes to their benefit designs.” Like AHIP, ERIC argues the new rules are “unworkable” and is setting plans up for failure.

In sum, health insurance industry leaders argue the rules do not provide enough guidance to ensure compliance, will raise costs by requiring the NQTL analyses, and will generally make access to mental health and substance use disorder treatment more difficult. Ultimately, they argue the new rules will aggravate the problem with regard to access, as opposed to alleviating the problem. Most recently, on January 17, 2025, ERIC filed a lawsuit in the U.S. District Court for the District of Columbia against the U.S. Departments of Health and Human Services, Treasury, and Labor, challenging the September 2024 final rules.

Conclusion

The final rules of the MHPAEA are intended to serve as a system of checks and balances on insurers and health plans to ensure they are providing enrollees with equal access to mental health and substance use disorder treatment, as compared to medical and surgical treatment. If the last few years have revealed anything, it is that insurers and health plans are not taking the MHPAEA seriously, and mental health and substance use disorders are only more prevalent.

With the final rules, insurers and health plans will be required to conduct analyses and make changes to ensure that these treatments are more easily accessible to their enrollees and beneficiaries. Despite the backlash from the insurance industry and related businesses and organizations, the Biden Administration maintained course to implement the final rules to hold the insurers accountable and provide transparency. In the end, the goal is accessibility and equality, and the only ones with something to lose under these new rules appear to be insurers and health plans. It is inevitable they would oppose such change. However, without requiring such monitoring and correction, it is abundantly clear that the status quo will continue the clearly demonstrated history of failure in access to mental health care and substance abuse treatment.