On May 15, 2025, the Departments of Labor, Health and Human Services, and Treasury (the “Departments”) issued a statement of non-enforcement (the “Statement”) announcing that they will not enforce the 2024 Final Rule under the Mental Health Parity and Addiction Equity Act (“MHPAEA”).
The MHPAEA requires group health plans to provide mental health and substance use disorder benefits similarly to medical and surgical benefits. On September 9, 2024, the Departments released the 2024 Final Rule under the MHPAEA (the “2024 Final Rule”), which amended the previous 2013 Final Rule (the “2013 Final Rule”). The 2024 Final Rule imposed several significant compliance requirements on plan sponsors including, but not limited to, the following:
- Plans that provide mental health and substance use disorder benefits must provide “meaningful benefits” for those conditions in every benefit classification in which medical and surgical benefits are provided.
- Plans must abide by additional requirements for the nonquantitative treatment limitation (“NQTL”) comparative analysis, including a description of the NQTL, identification of the factors and how they are used, and findings and conclusions.
- Plans must collect and evaluate data to assess the impact of NQTLs and take action when there are “material differences in access” to mental health or substance use disorder benefits.
- ERISA Plans must certify that they engaged a “qualified service provider” to prepare the plan’s NQTL comparative analysis.
The enforcement of these requirements was staggered. Some provisions were to be enforced for plan years beginning on or after January 1, 2025, while others were to be enforced for plan years beginning on or after January 1, 2026.
The Statement follows a lawsuit filed on January 17, 2025 by the ERISA Industry Committee (“ERIC”) in the U.S. District Court for the District of Columbia. ERIC is challenging specific provisions of the 2024 Final Rule, arguing, among other things, that the rule is arbitrary and capricious and contrary to law. On May 9, 2025, the Departments filed a motion requesting that the court pause the litigation while the Departments reconsider the 2024 Final Rule and determine whether to modify or rescind it. The court granted this request on May 12, 2025, and the Departments issued the Statement soon thereafter.
In response to the ERIC litigation and in line with Executive Order 14219, which directs federal agencies to review rules that may place unnecessary burdens and compliance costs on small businesses and private parties, the Departments announced that they will not enforce the 2024 Final Rule, or pursue enforcement actions based on a failure to comply, until a final decision in the ERIC litigation is issued, plus an additional 18 months. During this time, the Departments will also reexamine how each department enforces the MHPAEA.
In the Statement, the Departments clarify that “the enforcement relief applies only with respect to those portions of the 2024 Final Rule that are new in relation to the 2013 Final Rule.” In other words, the MHPAEA’s statutory obligations, including those amended by the Consolidated Appropriations Act, 2021 (“CAA”) and subregulatory guidance (specifically, FAQs Part 45), remain in effect and subject to enforcement.
It is also important to note that, while the Statement encourages states to also halt the enforcement of the 2024 Final Rule, it does not apply to state regulators who interpret and enforce both the MHPAEA and state mental health parity laws. This means that state insurance departments have discretion regarding whether to follow the Statement for the health plans in which it regulates (e.g., fully-insured plans).
As a result of this statement of non-enforcement, plan sponsors must continue to comply with the requirements under the 2013 Final Rule, perform an NQTL comparative analysis pursuant to the CAA, and closely monitor future developments as the Departments reevaluate the 2024 Final Rule. Plan sponsors, particularly those sponsoring fully-insured plans, should also pay close attention to the applicable state department of insurance’s guidance on this topic to ensure that their parity compliance standards align with the state’s enforcement rules.
