Only weeks after the principal effective date for the final 2024 federal mental health parity rules for employer-sponsored health benefit plans, those rules—and specifically some key features that are frustrating employers—are being challenged as examples of regulatory overreach.
Quick Hits
- A large employer advocacy group sued three federal agencies over their final rules implementing the federal mental health parity law applicable to employer-sponsored health plans.
- The industry group argues the federal agencies did not have the authority to create a benefit mandate.
- The federal agencies have until March 17, 2025, to respond to the complaint. They have argued that the mental health parity rules are not a benefit mandate.
The ERISA Industry Committee (ERIC), a large employer advocacy group, is asking a federal court to vacate certain provisions or the entire 2024 final regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA), as well as permanently enjoin enforcement of the specific provisions or the regulations overall.
The complaint was filed on January 17, 2025, in the U.S. District Court for the District of Columbia against the U.S. Departments of Health and Human Services, Treasury, and Labor.
In its complaint, ERIC specifically criticizes requirements in the MHPAEA rules, including those that:
- require named fiduciaries to make certifications regarding the “comparative analysis” prepared for the plan;
- require plans to comply with the final rules generally as of January 1, 2025 (less than four months following publication of the final rules); and
- require fiduciaries to determine whether a service provider is “qualified” to do a comparative analysis.
ERIC generally argues that these 2025 requirements, as well as several requirements that would take effect in 2026, exceed the agencies’ authority to implement the MHPAEA and related statutes, or are too imprecise to serve as a legitimate basis for enforcement against employer-sponsored health plans.
On September 23, 2024, the federal agencies published final rules requiring group health plans to provide “meaningful benefits” for mental health or substance use disorders in coverage categories where medical or surgical benefits are also provided. Meaningful benefits cover core treatments, defined as standard treatments or interventions indicated by “generally recognized independent standards of current medical practice.”
The bulk of the final rules took effect on January 1, 2025, with some provisions scheduled to take effect on January 1, 2026. The meaningful benefits requirement is slated to become effective on January 1, 2026.
The lawsuit argues that the meaningful benefits requirement exceeds the federal agencies’ authority because it imposes a benefits mandate. It also claims the federal agencies violated the Administrative Procedure Act’s notice and comment requirements.
“All that is required is parity in particular plan terms and their application, not parity in access to mental health/substance use disorder benefits, much less provision of particular benefits,” the lawsuit states. “Congress has repeatedly made clear that the MHPAEA is not a benefits mandate, and it therefore does not require health plans to provide any particular mental health/substance use disorder benefits, or even to provide mental health/substance use disorder benefits at all.”
It also argues that the meaningful benefits requirement is antithetical to the Employee Retirement Income Security Act (ERISA), which governs most private health plans.
In the final rule, the federal agencies emphasized that the meaningful benefits requirement “is not a coverage mandate, but rather another approach to ensuring parity between mental health or substance use disorder benefits and medical/surgical benefits in a classification.”
Next Steps
The meaningful benefits requirement is scheduled to take effect on January 1, 2026. It is unclear what the federal court will ultimately decide in this case. If the court finds in favor of the ERISA Industry Committee, then the obligation to provide “meaningful benefits” for mental illness and addiction could become moot.
In the meantime, employers may want to review the terms of their group health plans for compliance with the mental health parity requirements and work closely with their plan administrators and other professionals to document their analysis of how the plan meets the mental health parity requirements in operation based upon available data and guidance.