Mental Health Parity – What Non-Enforcement of the 2024 Parity Rule Means for Employer Plans

On May 9, 2025, the Departments of Labor, Health and Human Services, and Treasury (collectively, “the Departments”) asked the D.C. federal court to suspend a lawsuit to challenge the legality of the 2024 Rule on the Mental Health Parity and Addiction Equity Act (MHPAEA) while the Departments consider whether to rescind or modify the 2024 Rule.^[1]

On May 15, 2025, the Departments released a public statement that they will not enforce the 2024 Final Rule prior to a final decision in the litigation, plus an additional 18 months after the decision.

The public statement on May 15 provides further details regarding the scope of the non-enforcement policy, including clarification that the 2013 MHPAEA rules remain in effect, as does plans’ obligation to develop comparative analyses of non-quantitative treatment limits (“NQTLs”). However, the Departments have not yet provided any indication of the timeline for publishing a notice of proposed rulemaking to rescind or modify the 2024 Rule, and most likely it will take some time for the Departments to determine how exactly the new rule should be designed to better implement the statutory requirements.

The Departments Will Not Enforce the 2024 MHPAEA Rule

The 2024 Rule was issued to implement revisions to the MHPAEA passed as part of the Consolidated Appropriations Act of 2021 (“CAA”) to add specific requirements for the development and enforcement of comparative analyses for NQTLs. The Departments’ statement clarifies 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. The Departments note that MHPAEA’s statutory obligations, including the new requirements under the CAA, continue to have effect. To understand the Departments’ current interpretation of the statute, the announcement refers plans and issuers to previous guidance including the 2013 final rule, FAQs Part 45 (which interpret the CAA requirements), and other sub-regulatory guidance.

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 types of substantive non-compliance that the Departments will seek to identify and correct going forward.

States Will Continue to Determine Their Own Enforcement Strategies

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. The Departments’ statement “encourages” states to similarly halt enforcement of the 2024 Rule and says that HHS will not penalize states for halting enforcement in alignment with the statement. However, fully-insured plans in all states continue to be subject to the MHPAEA statute and federal regulations, in addition to any state law for mental health parity, and state departments of insurance will have discretion about whether to follow the federal Departments’ policy of non-enforcement of the 2024 Rule. Some states have already adopted the 2024 Rule into state statute, and others may determine that the federal policy of non-enforcement puts a greater burden and priority on state regulators to enforce parity laws. Many states may continue to pursue existing reporting and enforcement methodologies, including through state-specific reporting templates and data measures. Insurance issuers should therefore ensure that their parity compliance strategies align with both federal and state data and documentation requirements and enforcement trends.  

The Departments Will Reexamine Their Enforcement Program

We note that the MHPAEA statute requires the Department of Labor and the Department of Health and Human Services to each undertake at least 20 MHPAEA investigations per year, so we do not expect enforcement of the statute to cease altogether. The Departments are continuing to pursue a large number of investigations that they opened prior to the effective date of the 2024 Rule, and that may be essentially unaffected by the policy of non-enforcement of the 2024 Rule. We also note that FAQ 45 and other federal guidance that pre-dates the 2024 Rule stipulates the DOL’s position that comparative analyses are part of the plan document that must be provided to members upon request under ERISA, and that plan members may continue to seek to enforce this and other MHPAEA requirements through private litigation.

The Departments’ court filing and statement indicate that they will reexamine the current MHPAEA enforcement program more broadly. The Departments have not yet provided further details about how their enforcement strategy may change, but seem likely to seek to adjust their strategies and processes for investigations to reduce the amount of time and effort necessary for investigators to conclude their reviews. A recent report by the Department of Labor Office of Inspector General on MHPAEA enforcement noted that to date, it has often taken up to three years for DOL investigators to complete NQTL comparative analysis reviews. The report also noted that funding that supports over one-third of DOL’s frontline investigators will expire in September, 2025. Thus it seems likely that the Departments will seek to develop investigation methodologies that will help them identify substantive compliance concerns more efficiently. For example, the Departments may begin to close out investigations more quickly where a plan provides a reasonable set of well-designed data measures that provide strong evidence of NQTL comparability “in operation,” even if narrative aspects of the comparative analyses do not fully satisfy the Departments’ expectations, and may further pursue the investigation only where the plan fails to provide data that adequately demonstrate comparability or the investigator identifies other significant compliance concerns.

Compliance Strategies While Awaiting New Guidance

While the Departments have not yet made any public statements about what aspects of the 2024 Rule they may revise or replace, they are likely to give careful consideration to the key concerns that ERIC raises in its complaint as they seek to ensure that the litigation is ultimately withdrawn or dismissed. Key aspects of the 2024 Rule that ERIC has challenged and corresponding considerations for compliance strategies include:

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 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, regulators will likely 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 non-enforcement policy does not change the statutory requirement for plans and issuers to create these comparative analyses. The Departments had stated in previous Reports to Congress that they had made “extraordinary efforts” to allow plans to correct and supplement their initial submissions in order to meet the statutory requirements. We had anticipated that, following the effective date of the 2024 Rule, investigators would be much quicker to make findings of non-compliance based on failure to fulfill the specific provisions for comparative analyses in the 2024 Rule (even where the submitted documentation was inconclusive as to substantive comparability of benefits).

In this context, it is possible that non-enforcement means a return to the status quo ante. In other words, it is possible that where a plan’s documentation does not affirmatively demonstrate, to the satisfaction of the investigator, that NQTLs are designed and applied in compliance with the comparability requirements, that federal regulators will continue to pursue prolonged investigations to probe all of the various aspects of NQTL design and application that were left ambiguous under the submitted analysis. From a compliance program design perspective, previous Reports to Congress and enforcement actions are probably still the best indicators of how to fully satisfy federal regulators’ expectations.

However, the Departments’ reexamination of the MHPAEA enforcement strategy, the DOL staffing reductions, and the broader deregulatory push of the Trump Administration may support a prediction that investigators will seek more efficient strategies for enforcement going forward. We anticipate that the Departments will focus much less on the adequacy of the comparative analysis documentation, and much more 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.

Non-enforcement of the 2024 Rule means that fiduciaries need not provide this formal certification. However, general fiduciary obligations related to the selection and monitoring of service providers under ERISA will continue to apply.

As previously noted, mental health investigations and enforcement actions to date have all proceeded under the statute, 2013 Rule, and other guidance that preceded the 2024 Rule, so most aspects of plans’ parity compliance programs may not change dramatically. Regulators are likely to continue to focus on the priorities identified in the Departments’ 2024 Report to Congress, including the adequacy of the plan’s participating provider network for MH/SUD providers and comparative analyses to justify any exclusions of coverage for key MH/SUD services. Perhaps the greatest impact may be to focus less on the fullness of documentation of comparative analyses and more on ensuring that plan documents, operations measures, and supporting policies and procedures demonstrate substantive comparability for NQTL design and operation.

The Departments’ announcement represents a significant development in the ongoing saga of federal MHPAEA policy. Employers, TPAs, issuers, and other entities subject to or significantly impacted by MHPAEA will need to carefully monitor and engage with any effort by the Departments to rescind and replace the 2024 Rule. Reach out to the EBG attorney you work with on MHPAEA if you have any questions about next steps arising from the Departments’ announcement.

This post was updated to incorporate the Departments’ Statement, released on 5/15/25.

ENDNOTE:

[1] The lawsuit was filed by the ERISA Industry Committee (“ERIC”) and the motion indicated that ERIC consented to the Departments filing the motion, subject to ERIC’s right to “resume litigation at any time if necessary”.  The Departments agreed to provide quarterly status reports to the court on progress on new guidance starting on or before August 7, 2025.  The Court grated the stay on the same day that the motion was filed.