In September 2024, a final rule was published for the Mental Health Parity and Addiction Equity Act (MHPAEA). However, in January 2025, the ERISA Industry Committee (ERIC) filed a lawsuit against the Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) (collectively, the Departments), which issued the rule; in response, the Departments requested a stay to the litigation while it reviewed the 2024 final rule. In addition, the Departments paused all enforcement with regard to the 2024 Final Rule; however, this doesn’t make compliance with Mental Health Parity (as it existed before the 2024 Final Rule’s effective date) optional.
The MHPAEA was initially enacted in 2008. Generally, MHPAEA requires parity between mental health/substance use disorder (MH/SUD) benefits and medical/surgical benefits with respect to: (i) annual or lifetime limits; (ii) financial and quantitative treatment limitations (e.g., amount of copay or coinsurance); and (iii) nonquantitative treatment limitations (NQTLs). Regulations were released in 2013 by the Departments implementing MHPAEA (2013 final rule). The Consolidated Appropriations Act, 2021 (CAA) amended MHPAEA by expressly requiring group health plans to perform and document comparative analyses of the design and implementation of NQTLs that apply to MH/SUD benefits. The CAA also required the Departments to annually submit to Congress a public report summarizing the comparative analyses requested for review by the Departments.
On August 3, 2023, the Departments issued the 2023 proposed rule, and the Departments received 9,503 comments on the 2023 proposed rule during the comment period. After considering the comments received, in September 2024, the Departments published Requirements Related to the Mental Health Parity and Addiction Equity Act: Final Rule.
New provisions of the 2024 final rule include:
On January 17, 2025, ERIC filed a lawsuit under the Administrative Procedure Act against the Departments alleging that the 2024 final rule exceeded the Departments’ statutory authority under MHPAEA by imposing de facto benefit mandates, created vague and burdensome requirements, improperly exercised delegated regulatory power, and was arbitrary and capricious. Former Secretary of Labor Eugene Scalia and his colleagues at Gibson, Dunn & Crutcher LLP represent ERIC in this matter and prepared the complaint.
Given the recent change in Presidential administration, it was uncertain how the Departments would handle the lawsuit and whether the new administration would defend the 2024 Final Rule. The response was due on May 12, but on May 9, the government filed a motion asking the court to hold the case in abeyance pending the Departments’ reconsideration of the 2024 final rule.
Specifically, the filing stated that the Departments intended to reconsider the 2024 final rule and may modify or rescind it. The filing also stated that the Departments would:
On May 15, 2025, the Departments announced a non-enforcement policy regarding the 2024 final rule. The announcement cites the ERIC lawsuit and the President’s Executive Order 14219 as the reasons for the review of the 2024 final rule. The notice provides that:
So what does this all mean? Only the new requirements defined in the 2024 final rule are on hold. Employers are still required to comply with MHPAEA’s statutory obligations, including, but not limited to, performing and documenting an NQTL comparative analysis. Participants can still request a copy of a plan’s NQTL comparative analysis.
As the Departments undertake the examination of each department’s enforcement approach, there may be some reorganization of the assignment of roles similar to the Reorganization Plan No. 4 of 1978, which eliminated almost all of the dual and overlapping authority between Treasury and DOL under ERISA.
The 2013 final rule and the subregulatory guidance FAQs are untouched, and plans sponsors should continue to treat compliance with MHPAEA as a priority.
