Limited Mental Health Parity Relief for Plan Sponsors

By Allison B. Bans

On January 17, 2025, the ERISA Industry Committee (“ERIC”) filed suit in the U.S. Court of Appeals for the D.C. Circuit asking the court to hold various key provisions under the 2024 Mental Health Parity Addiction Equity Act (“MHPAEA”) Final Regulations (e.g., the ERISA plan fiduciary certification requirement, the meaningful benefits requirement, and the material differences in access standard) as invalid and prohibit the Departments of Health and Human Services, Treasury, and Labor (the “Departments”) from implementing, administering, acting upon, or enforcing the 2024 Final Rule, or at least the key provisions. For more information on the 2024 Final Rule, please refer to our 2024 End-of-Year Plan Sponsor “To Do” List (Part 1) Health and Welfare.

On May 12, 2025, the court granted the Departments’ request for abeyance, in which the Departments indicated that they intend to take three steps including: (1) reconsider the 2024 Final Rule; (2) issue a non-enforcement policy for the 2024 Final Rule provisions effective for plan years beginning on or after January 1, 2025 and January 1, 2026; and (3) re-examine the Departments’ MHPAEA enforcement program more broadly.

On May 15, 2025, the Departments issued a statement that they will not enforce the 2024 Final Rule or otherwise pursue enforcement actions, based on a failure to comply that occurs prior to the final decision in the ERIC litigation, plus an additional 18 months.

This may come as welcome news for employers throughout the country who have struggled to understand, and ultimately comply with, the highly technical mental health parity laws, particularly the requirement to provide a detailed non-quantitative treatment limitation (“NQTL”) comparative analysis. However, until the Departments re-examine their MHPAEA enforcement program more broadly, the non-enforcement policy provides limited relief for the following reasons:

1. The requirement for plans that offer medical/surgical benefits and mental health/substance use disorder benefits and impose NQTLs on the mental health/substance use disorder benefits to provide a detailed NQTL comparative analysis is still in place.

2. Mental health parity audits are ongoing and will continue as long as the Consolidated Appropriations Act, 2021, which requires the Departments to audit at least 20 NQTL comparative analyses per year, is in effect.

3. Although the 2024 Final Rule is currently non-enforceable, most of the requirements under these rules (including the meaningful benefits, prohibition on discriminatory factors and evidentiary standards, and material differences requirements), would not have taken effect until plan years on or after January 1, 2026.

4. Although the NQTL fiduciary certification requirement under the 2024 Final Rule is currently not enforceable, plan fiduciaries are not off the hook because the fiduciary duty of prudence includes a duty to monitor service providers and comply with applicable laws, including mental health parity.

5. Under ERISA, participants have the right to request and receive plan documents including the NQTL comparative analysis within 30 days. Failure to comply may trigger $110 per day penalties.

In summation, while there appears to be a shift in priorities under the Trump Administration to minimize burdensome regulations that are not outweighed by public benefit, practically employers must continue their mental health parity compliance efforts.

*Any opinions expressed are those of the authors, and not necessarily the firm or their colleagues.