Mental Health Parity Alert – Non-Enforcement of Final Rules

The Mental Health Parity and Addiction Equity Act (MHPAEA), and its implementing regulations and guidance, prohibits health insurance policies and group health plans that cover mental health and substance use disorder (MH/SUD) benefits from imposing limitations on MH/SUD benefits that are less favorable than the limitations imposed on medical/surgical benefits. As we have written previously, the Consolidated Appropriations Act, 2021 (CAA) added a requirement for health plans to document their compliance with nonquantitative treatment limitation (NQTL) requirements under the MHPAEA by completing a written NQTL analysis. As described in detail below, the Trump Administration has recently indicated that it will make it a bit easier for plan sponsors to comply with the written NQTL analysis requirement. 

Last fall, the Department of Labor, Department of Health and Human Services, and the Department of the Treasury (“the Departments”) published final MHPAEA regulations (“Final Rule”). You can read more about the Final Rule in our prior article available here, and about the Departments’ priorities related to MHPAEA here and here. Several of the requirements imposed under the Final Rule significantly raised the bar that health plans are required to meet in their NQTL analysis.

In January, a lawsuit was filed against the Departments seeking to invalidate the Final Rule for several reasons, including alleging that the Departments exceeded their authority in issuing the Final Rule. Earlier this month, the Departments indicated in a filing in that lawsuit (which is now paused) that the Trump Administration intends to reconsider the Final Rule and will be issuing a non-enforcement policy in the near future related to the Final Rule’s requirements.

While this position of non-enforcement means that the Final Rule will not be enforced against health plans, it does not impact the status quo under the CAA. Plan sponsors still need to maintain a written NQTL analysis, but the Final Rule’s additional NQTL analysis requirements will not be enforced (e.g., ERISA fiduciary certification, “meaningful benefits” standard, etc.). The Departments have continued to indicate that MHPAEA compliance is a top priority, and lawsuits in the MHPAEA space remain common. While the reduced lift from non-enforcement of the Final Rule offers welcome relief to employers and plan service providers, the underlying requirement created by the CAA remains in effect.