DOJ to Stay Enforcement of Mental Health Parity Act

 In response to a lawsuit brought in January by the ERISA Industry Committee, the U.S. Department of Justice announced Friday that President Donald Trump’s administration will stay enforcement of aspects of the Mental Health Parity Act and Equity Addiction Act final rule that took effect during the administration of former President Joe Biden.

The Departments of Labor, Health and Human Services and the Treasury now intend to reconsider the rule, including whether to issue a notice of proposed rulemaking, to rescind or to modify the regulation.

The Employee Benefits Security Administration finalized the rule in September 2024 with the goal of expanding access and lowering costs for mental health and substance abuse disorder care.

A summary of the final rule states, “these final rules amend the existing [nonquantitative treatment limitation] standard to prohibit group health plans and health insurance issuers offering group or individual health insurance coverage from using NQTLs that place greater restrictions on access to mental health and substance use disorder benefits as compared to medical/surgical benefits.”

In ERIC’s complaint, filed in January in U.S. District Court for the District of Columbia, the industry group that represents large U.S. employers argued that the rule does not require health plans to provide any particular mental health or substance abuse disorder coverage or even to provide these benefits at all. ERIC further argued that much of the parity rule “upends the regulatory and compliance framework that has evolved over decades pursuant to the limits established by Congress.”

“The Parity Rule also imposes entirely new, ambiguous requirements that are so burdensome and unworkable that they will discourage employers from offering MH/SUD benefits at all,” ERIC stated in its complaint.

For instance, the group argued that the rule’s new “meaningful benefits” requirement is an example of the departments’ regulatory overreach. Under the rule, plans that cover a mental health or substance abuse disorder condition in a benefit classification (inpatient, outpatient or pharmacy) must provide “meaningful benefits” for that condition in all classifications in which medical and surgical benefits are provided.

“If a plan offers inpatient [medical and surgical] benefits—as nearly every health plan does—and also offers inpatient MH/SUD benefits, the Departments have now arrogated to themselves authority to determine the adequacy of those inpatient MH/SUD benefits,” ERIC stated in the complaint.

The industry group released a statement on Monday praising the Trump administration’s response to the lawsuit and its decision not to penalize employers under the rule while the case is pending and is reconsidering the rule.

“Today’s action by the Trump Administration recognizes the need for greater examination to ensure employers have the clarity and flexibility they need to offer robust behavioral health benefits for a healthy, productive workforce,” the ERIC release stated. “This critical first step paves the way for the administration to restore a sensible approach to parity rules for mental health and substance use disorder care.”

The 2024 rule has two applicability dates: plan years beginning on or after January 1, 2025, and plan years beginning on or after January 1, 2026.

The federal departments intend to issue a non-enforcement policy in the “near future” covering the portions of the rule that are applicable for plan years beginning on or after January 1, 2025, and January 1, 2026, and also intend to “reexamine the Departments’ current MHPAEA enforcement program more broadly.”

Because the departments do not intend to enforce parts of the rule and are reconsidering the regulation challenged in the litigation, the federal departments have agreed it is appropriate to place the case in abeyance, pending the completion of the reconsideration process.

Several mental health and substance use disorder advocacy organizations—the Legal Action Center, the American Psychological Association, Inseparable, Mental Health America, National Alliance on Mental Illness and National Health Law Program—expressed disappointment in the Trump administration’s response to the ERIC complaint.

According to the organizations, working people and their families, who are paying for health insurance coverage, will face steeper challenges to access mental health and substance use disorder care “to which they are legally entitled” if the parity rule is not enforced.

“The 2024 regulations are necessary for implementing the Consolidated Appropriations Act of 2021, signed by President Trump, and closing loopholes in the enforcement of parity,” the organizations wrote in a statement. “The Trump Administration has renewed the opioid public health emergency and declared May 2025 as National Mental Health Awareness Month. These words must be backed by actions that meaningfully protect access to treatment, not just the interests of insurance companies.”

A recent survey conducted by Prudential Group Insurance found that 48% of employees believe their employer should help them address mental health challenges.

In addition, 69% of employers ranked mental health as an area in which they intend to support their employees. Generation Z and Millennial employees surveyed were more likely than older generations to rank mental health as a top priority.

https://www.plansponsor.com/doj-to-stay-enforcement-of-mental-health-parity-act/