/>iOn May 9, 2025, the Departments of Labor, Health and Human Services, and Treasury (collectively, “the Departments”) asked the D.C. federal court to suspend litigation while they consider whether to rescind or modify the 2024 Rule implementing the Mental Health Parity and Addiction Equity Act (MHPAEA).
As part of the request, the Departments indicated that they will suspend enforcement of the 2024 Rule.
The 2024 Rule was issued to implement revisions to the MHPAEA statute that were passed as part of the Consolidated Appropriations Act of 2021 (“CAA”) to add specific requirements for the development and enforcement of comparative analyses for non-quantitative treatment limits (“NQTLs”). The Departments’ enforcement suspension was announced as a part of a motion to hold in abeyance a legal challenge to the statutory basis for the 2024 Rule that was filed by the ERISA Industry Committee (“ERIC”) on January 17, 2025.
Specifically, the motion provides that the parties have agreed to the Departments’ request to stay the litigation while the Departments suspend enforcement of the 2024 Rule and “reconsider the 2024 Rule…including whether to issue a notice of proposed rulemaking rescinding or modifying the regulation.” The Departments specifically propose to “(1) issue a non-enforcement policy in the near future covering the portions of the 2024 Rule that are applicable for plan years beginning on or after January 1, 2025 and January 1, 2026, and (2) reexamine the Departments’ current MHPAEA enforcement program more broadly.” The Departments also propose to provide quarterly status reports to the court on progress, starting on or before August 7, 2025. The motion also indicates that ERIC consented to the Department filing the motion, subject to ERIC’s “right to resume litigation at any time if necessary.”
The Departments’ motion leaves unclear whether the non-enforcement policy will apply to all aspects of the regulations or only to selected provisions. At minimum, the non-enforcement policy is likely to address the four aspects of the 2024 Rule that ERIC challenged in its complaint:
1. “Meaningful benefits”
The 2013 MHPAEA regulations provided that if a health plan provides benefits for mental health and substance use disorders (“MH/SUD”) in any classification of benefits, then it must provide MH/SUD benefits in every classification in which medical/surgical benefits are provided. The 2024 Rule expanded this requirement in two ways. First, it clarified that the requirement applies by condition—that is, a service must be covered in every classification for each covered MH and SUD condition. Second, it stipulates that such coverage must be “meaningful,” and defines “meaningful” to mean that coverage must include at least one “core” or “primary” treatment for the condition in each classification.
Under the non-enforcement policy, the Departments are unlikely to require analysis of whether a plan’s coverage for MH/SUD conditions is “meaningful.” However, even prior to the 2024 Rule, the Departments have found that exclusions for certain MH/SUD benefits violate the statutory requirements for non-quantitative treatment limits (NQTLs), so plans and issuers should continue to ensure that MH/SUD exclusions in the plan document can be justified under the statute.
2. “Material differences in access”
The MHPAEA statute requires plans to analyze whether the application of an NQTL to MH/SUD benefits is comparable to its application to medical/surgical benefits “in operation.” Guidance including the 2024 Rule clarified that this generally involves the use of data measures to analyze the impact of the NQTL on access to MH/SUD and medical/surgical treatments and services, including measures like denial rates for claims and authorizations. The 2024 Rule specified that if the plan’s data measures demonstrate outcomes that are more stringent for MH/SUD benefits than for M/S benefits, the plan must take action to remedy any “material difference” in access that is attributable to the NQTL.
The Departments have consistently requested data measures to evaluate comparability “in operation” dating back to the 2013 parity rule, so the forthcoming policy on non-enforcement of the 2024 Rule should not be interpreted to mean that plans and issuers should no longer consider data measures in evaluating their compliance with the MHPAEA statute. Instead, the non-enforcement policy is likely to mean that regulators will provide greater leeway for plans to select and interpret the measures that they use in their analyses.
3. Comparative analysis requirements
The CAA updated the MHPAEA statute to require plans and issuers to develop a 5-step “comparative analysis” to demonstrate that the processes, strategies, evidentiary standards, and other factors used to apply an NQTL to MH/SUD benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTL to medical or surgical benefits in each benefit classification. In each of the annual Reports to Congress on MHPAEA that the Departments have published since then, the Departments have found that the comparative analyses that plans and issuers have been creating are insufficient to meet the statutory requirements. The 2024 Rule provided extensive guidance on the specific content that the Departments have determined that plans and issuers should provide within each step of the analysis.
The forthcoming non-enforcement policy does not change the statutory requirement for plans and issuers to create these comparative analyses. However, it most likely signals that the Departments will not focus on the adequacy of documentation with regard to the comparative analyses, and instead will focus their enforcement efforts on identifying substantive disparities in the design or application of NQTLs. In practice, where regulators determine that the comparative analysis submitted by a plan is insufficient to demonstrate compliance with the statute, regulators are likely to continue to request additional policies, data, and other plan documentation sufficient to determine whether the NQTL meets the statutory requirements for comparability and stringency.
4. Fiduciary certification requirement
The 2024 Rule required plan fiduciaries to certify that they have engaged in a “prudent process to select one or more qualified service providers to perform and document a comparative analysis” for each NQTL, and that they have satisfied their duty to monitor those service providers. The preamble explained that the Departments interpret this duty to include, at a minimum, reviewing the comparative analyses, asking questions about them to understand the documented findings and conclusions, and ensuring that the responsible service providers provide assurance that, to the best of their ability, the NQTLs and associated comparative analyses comply with the requirements of MHPAEA and these regulations. The 2024 Rule required the fiduciary certification to be included in each comparative analysis.
The non-enforcement policy is likely to provide that the Department of Labor (DOL) will not require comparative analyses to include certification that the plan fiduciary has engaged in a prudent process to select and oversee the service providers that performed the analysis. However, general fiduciary obligations related to the selection and monitoring of service providers under the Employee Retirement Income Security Act (ERISA) will continue to apply.
The formal policy of non-enforcement, when published, should help to clarify the Departments’ intentions with regard to the scope of the provisions that will not be enforced, but may not fully resolve the ambiguity about which aspects of the MHPAEA statute and accumulated guidance for which they do intend to enforce. The expiration of 2021 funding to support additional staffing for the Department of Labor investigations team and other staffing cuts under the Trump Administration may further impact enforcement practices for employer health plans and their third-party administrators. The Departments’ 2024 MHPAEA Report to Congress provides the most detailed discussion to date of the types of findings and corrective actions that the Departments required prior to the adoption of the 2024 Rule and may be the best guide to the Departments’ enforcement strategy for 2025 unless and until more details are provided in the formal non-enforcement policy. However, although the motion only mentions the 2024 Rule and the Departments were enforcing the CAA prior to its adoption, it is possible that the Departments will go further and suspend all MHPAEA enforcement efforts as a part of the non-enforcement policy.
Health insurance issuers that offer fully-insured health plans should note that the federal policy of non-enforcement does not apply to state regulators, who interpret and enforce both federal and state laws for mental health parity. Fully-insured plans in all states continue to be subject to the MHPAEA statute and the 2024 Rule, in addition to any state law for mental health parity. Some states have already adopted the 2024 Rule into state statute, and others may do so as a result of the Departments’ announcement. Many states have required parity compliance reporting using state-specific data measures and reporting templates. Some state regulators may determine that the federal policy of non-enforcement puts a greater burden and priority on state regulators to enforce parity laws. Insurance issuers should therefore ensure that their parity compliance strategies align with both federal and state data and documentation requirements and enforcement trends.
Finally, employers, third-party administrators, issuers, Medicaid Managed Care Organizations, and other entities subject to, or significantly impacted by, MHPAEA will also need to carefully monitor and engage with any effort by the Departments to rescind and replace the 2024 Rule.
