The Trump administration's U.S. Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) recently announced that it would no longer enforce regulations requiring employer health plans to analyze and compare behavioral healthcare with physical healthcare coverage. Along with a lack of enforcement, the agencies intend to review their enforcement processes more broadly.
The announcement delays a Biden administration rule, finalized in September 2024, which increased the standards for analyzing restrictions on behavioral healthcare in health plans to comply with federal mental health parity requirements. The current administration's decision has left benefits attorneys with significant uncertainty for the future.
The previously finalized rule required plans to provide written comparative analyses of the two types of coverage to the DOL, state agencies, and plan participants upon request, as well as a fiduciary to certify the document for compliance with federal parity laws. The rule took effect after Congress imposed the written comparative analysis requirement for nonquantitative limitations in 2020 and granted the DOL new authority to request comparative analyses from health plans.
The rule came amidst poor compliance rates with parity laws, such as the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and its predecessor, the 1996 Mental Health Parity Act. The laws were designed to eliminate or lessen restrictions on nonquantitative treatment limitations on mental health and substance use disorder treatment. Under these laws, limitations on coverage for mental health and substance use disorder treatment may be no more stringent than those for coverage of treatment for physical conditions.
The Trump administration's policy shift has disappointed those who had hoped the rule would improve coverage for behavioral health treatment by insurance plans. Some advocates also characterized the move as "a step in the wrong direction," especially coming during National Mental Health Awareness Month, and may lead to a lack of access to treatment and coverage for mental health conditions.
Before the federal agencies officially announced the policy change, representatives of the federal government advised a D.C. federal court of the intended non-enforcement as part of its motion to place a suit by the ERISA Industry Committee (ERIC) challenging the rule in abeyance. Since the policy shift could render the suit moot, the court granted the government's motion.
Meanwhile, employer-side benefits attorneys welcomed the non-enforcement announcement, citing ongoing compliance issues. The statement indicates that future enforcement will not occur until 18 months have passed after a final decision in ERIC's lawsuit challenging the rule.
Although some components of the rule would not take effect until 2026, certain employer compliance requirements became effective on January 1, 2025, despite a lack of clarity regarding them. Therefore, employers now have at least temporary relief from these compliance requirements, which some described as setting standards that were "impossible to meet."
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