Federal Agencies Announce Non-enforcement of 2024 Mental Health Parity Regulations

At a Glance

• The Mental Health Parity and Addiction Equity Act (MHPAEA) requires health insurance plans to provide mental health and substance use disorder benefits that are comparable to those for medical and surgical benefits.
• Plans and insurers may suspend compliance with the 2024 Final Rule but must continue to comply with MHPAEA’s statutory requirements as well as regulations issued in 2013 and applicable subregulatory guidance.
• It remains to be seen how aggressively and stringently the DOL, the HHS and the IRS will enforce these requirements and what position they will take with respect to what compliance with the written comparative analysis requirement looks like.
• Plan participants may also continue to challenge coverage limitations and decisions via private litigation.

The federal agencies that enforce the Mental Health Parity and Addiction Equity Act (MHPAEA) — the Departments of Labor and of Health and Human Services, along with the Internal Revenue Service (the Agencies) — announced last quarter that they will not enforce regulations promulgated in 2024 (2024 Final Rule) regarding MHPAEA’s requirements for nonquantitative treatment limitations (NQTLs). The Agencies noted that they will reconsider or modify the 2024 Final Rule (and potentially other guidance) and review each department’s respective enforcement approach. Since its enactment in 2008, MHPAEA has become the focus of significant regulatory and enforcement activity, as well as private litigation. Before the announcement, DOL in particular had emphasized that MHPAEA compliance was a top enforcement priority.

Over the years, Congress has amended MHPAEA, and the Agencies have issued various regulations, creating a complicated web of requirements for plans and insurers. Plans and insurers may suspend compliance with the 2024 Final Rule but must continue to comply with MHPAEA’s statutory requirements as well as regulations issued in 2013 and applicable subregulatory guidance.

MHPAEA Background

MHPAEA requires health insurance plans to provide mental health and substance use disorder benefits that are comparable to those for medical and surgical benefits. After MHPAEA’s enactment, the Agencies published final regulations in 2013 specifying how plans must achieve this equity (2013 Rules). The 2013 Rules require plans and insurers to ensure that any processes, strategies and evidentiary standards used in applying quantitative treatment limitations and NQTLs to mental health and substance use disorder benefits are comparable to, and applied no more stringently than, the processes, strategies and evidentiary standards used in applying the limitation with respect to medical and surgical benefits.

In 2021, Congress added provisions to the MHPAEA via the Consolidated Appropriations Act (CAA) that require plans and insurers to prepare a written comparative analysis demonstrating compliance with the NQTL requirements. The 2024 Final Rule provided additional guidance, requiring, among other things:

• Specific content requirements for the written comparative analysis, in addition to that already required by the 2013 rules
• Collection and evaluation of “relevant data” to ensure operational compliance with NQTL requirements
• Fiduciary certification regarding the comparative analysis’s preparation

The issued guidance has not, to date, provided a sample comparative analysis to guide plans and insurers on what the Agencies would expect a compliant written comparative analysis would look like.

Compliance for Plans and Insurers After New Agency Position

Plans and insurers no longer need to comply with the requirements in the 2024 Final Rule that are new in relation to the 2013 Rules. However, plans must continue to comply with all other statutory and regulatory requirements, including preparing a written comparative analysis and applying NQTLs comparably and no more stringently to mental health and substance abuse disorder benefits than to medical and surgical benefits. It remains to be seen how aggressively and stringently the Agencies will enforce these requirements and what position they will take with respect to what compliance with the written comparative analysis requirement looks like. Plan participants may also continue to challenge coverage limitations and decisions via private litigation.