U.S. pauses new mental health parity regulations amid litigation

The U.S. Departments of Labor, Treasury, and Health and Human Services recently announced a non-enforcement policy regarding the latest Mental Health Parity and Addiction Equity Act (MHPAEA) rules finalized in September 2024. This pause will affect the enforcement of these new regulations for the foreseeable future.

The 2024 rules introduced stricter requirements for employer-sponsored health plans, including more rigorous data review protocols and a mandate for plans to offer meaningful benefits for mental health and substance use disorders. Additionally, plan fiduciaries are required to certify that they have employed a careful process when selecting at least one qualified service provider to conduct a Comparative Analysis of nonquantitative treatment limitations (NQTLs).

While this pause may be welcomed by some employers, it is important to note that the non-enforcement policy only applies to the 2024 rules and upcoming requirements set for 2025 and 2026. The existing MHPAEA provisions, along with earlier statutory and regulatory obligations, remain in effect. This includes the requirement for plans to provide a Comparative Analysis upon request from either the Departments or plan participants.

This announcement comes in the wake of litigation initiated by the ERISA Industry Committee (ERIC) on January 17, 2025, which challenged various provisions of the 2024 rules. ERIC argued that the Departments had exceeded their statutory authority. The rules were established under the previous Biden administration, leaving employers and compliance officers awaiting the current administration’s response to this legal challenge.

Last week, the Departments requested a pause in the court proceedings, indicating they would review the 2024 rules to determine if any amendments or rescissions are necessary. This request also hinted at the issuance of the non-enforcement policy.

The non-enforcement policy suspends any enforcement of the new requirements set to take effect in 2025 and 2026, including the certification of the prudent selection process for service providers. The Departments also indicated that they would reassess the current enforcement strategies under the MHPAEA, particularly regarding amendments made by the Consolidated Appropriations Act of 2021.

Since the 2021 updates, stakeholders—including employers, insurance carriers, and industry partners—have sought greater clarity on what constitutes a sufficient Comparative Analysis. Previous guidance has offered some direction, but compliance remains challenging. A report to Congress on MHPAEA indicated that no Comparative Analysis submitted to date was deemed adequate by regulators upon first submission.

The Departments have not yet provided an example of what they would consider a sufficient Comparative Analysis. There is hope that their review of the 2024 rules will lead to clearer guidance on MHPAEA requirements and possibly a model Comparative Analysis to assist employers in meeting compliance standards.

The non-enforcement policy will last until 18 months following a final decision in the ongoing litigation. However, it does not alter any existing statutory or regulatory requirements under the MHPAEA, meaning employers must still comply with current parity rules. Employers should work closely with advisors, carriers, and third-party administrators (TPAs) to ensure their health plans align with the prevailing MHPAEA standards and identify any areas of non-compliance.

It is crucial for employers to maintain a Comparative Analysis that evaluates all plan NQTLs effectively, documenting the rationale and findings to demonstrate adherence to current MHPAEA guidelines.

For additional resources, the Department of Labor (DOL) offers a self-compliance tool to help review group health plans for MHPAEA compliance. The MHPAEA report to Congress details the Departments’ enforcement actions and highlights problematic plan provisions.

As employers negotiate contracts with carriers and TPAs, they should consider including clauses that require compliance with MHPAEA mandates, including assistance in preparing a thorough Comparative Analysis and reviewing plan data and network information.

Lockton’s Compliance Consulting team will continue to monitor developments in this area and provide updates on any changes.