By: HUB’s EB Compliance Team

In 2024, final rules were issued under the Mental Health Parity and Addiction Equity Act (“MHPAEA”). The rules focused on nonquantitative treatment limitations (“NQTLs”) and the comparative analysis requirement first required under the Consolidated Appropriations Act, 2021 (“CAA”). Now, in the latest turn of developments, the Departments of Labor, Health and Human Services, and Treasury (the “Departments”) announced they will not be enforcing the 2024 final rules.

Background

Under MHPAEA, treatment limitations applicable to mental health or substance use disorder benefits generally cannot be no more restrictive than those that apply to medical and surgical benefits. This broad requirement has both a numerical, or quantitative, component, and a nonquantitative component. The rules around quantitative limitations (dollar limits, visit limits, etc.) have been in the law for many years, but historically there had been less guidance around NQTLs (medical necessity determinations, step therapy, prior authorization, etc.).

The 2024 final rules amended existing MHPAEA regulations to incorporate new and revised definitions of key terms and to specify the steps that employers and insurers must take for their plans to comply with MHPAEA. The final rules also specified minimum standards for NQTL comparative analyses which had long been a source of difficulty for plan sponsors and their service providers. A more detailed description of the 2024 rules can be found here.

Non-Enforcement Policy

Earlier this year, the ERISA Industry Committee (“ERIC”) filed a lawsuit against the Department of Health and Human Services seeking to invalidate the 2024 final rules. The lawsuit alleged, among other things, that the Departments exceeded their authority, and that the January 1, 2025, effective date was arbitrary as it did not provide enough time for plans to comply. In response to the lawsuit, the Departments announced a non-enforcement policy, while simultaneously reconsidering the 2024 final rules.

Under the non-enforcement policy, the Departments will not enforce the 2024 final rules based on a failure to comply that occurs before a final decision in the ERIC case, plus an additional eighteen months. Notably, only the new portions of the 2024 final rules are subject to the non-enforcement policy. The non-enforcement policy does not apply to the 2021 statutory provisions under the CAA or 2013 final rules.

Conclusion

While the non-enforcement policy does bring a certain amount of relief for plan sponsors, they should not take this as the end of MHPAEA compliance concerns. For example, the comparative analysis requirement still applies to plans, just without the fiduciary certification and specific content requirements added in the 2024 final rules. In addition, while MHPAEA does not specifically allow private causes of action, §712 of ERISA codifies the protections of MHPAEA, and it does allow for private causes of action by plan participants and beneficiaries. Plan sponsors should be aware of this when considering their overall compliance moving forward under MHPAEA.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

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Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.