A recent legal challenge to a key mental health parity law sparks conversations about federal agencies’ power to interpret and enforce statutes. Earlier this year, the Employee Retirement Income Security Act Industry Committee (ERIC) filed a lawsuit against the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Treasury, regarding the enforcement of the updated 2024 Mental Health Parity and Addiction Equity Act (MHPAEA).
MHPAEA was enacted in 2008 to address disparities in benefits between mental health or substance use disorder (MH/SUD) treatment and medical/surgical (M/S) services. Under MHPAEA, MH/SUD treatment and financial limits must not be more restrictive than those for M/S services, and MH/SUD benefits cannot have separate limits that are not also applied to M/S benefits. In practice, the law required health plans and healthcare facilities to cover MH/SUD services in the same way as M/S services.
A 2013 Rule updated MHPAEA, clarifying ambiguity about parity for non-quantitative treatment limits (NQTLs), such as prior authorizations, network adequacy, medical necessity standards, and step therapies. This Rule also confirms that parity applies across all care levels, including outpatient, inpatient, and “intermediate” behavioral health settings.
Enforcing compliance with insurance plans under MHPAEA was difficult because the Act did not require strong proof of adherence. The 2021 Consolidated Appropriations Act (CAA) addressed this issue by requiring a comparative analysis of health plans to demonstrate parity between MH/SUD and M/S services, specifically NQTLs, and by allowing federal agency audits and on-demand submissions from health plans.
The 2024 Final Rule aimed to improve enforceability further and reduce ambiguity across employer plans (ERISA), ACA marketplace plans, and Managed Care plans through several new standards: requirements to report NQTL comparative analysis data to federal agencies and beneficiaries with clear explanations, fiduciary certification for ERISA plans, a more detailed NQTL collection and reporting process, and a standard that ensures plans offering any MH/SUD benefits provide meaningful material benefits in every classification that the plan also offers M/S benefits.
ERIC filed a lawsuit on January 17, 2025, with several allegations against the implementation of the 2024 Final Rule. First, ERIC argued that the Final Rule is too vague in guiding the collection and reporting of NQTL outcome measures and in addressing and fixing material differences in MH/SUD and M/S benefits. ERIC also claimed that many of these measures, now required for collection, could be affected by external factors that might hinder payers’ ability to remain compliant.
Additionally, ERIC questioned the scope of the Final Rule, arguing that the 1:1 requirement for MH/SUD and M/S benefits across all classifications exceeds the Act’s scope and intent. Finally, ERIC challenged the applicability date of January 1, 2025, claiming that it offers too little time for employers/agencies to make the necessary adjustments to comply. Throughout their complaint, ERIC argued that HHS, DOL, and the Treasury violated the Administrative Procedure Act by creating and enforcing what they describe as a vague and overbroad regulation.
On May 12, 2025, the U.S. District Court for the District of Columbia agreed to stay ERIC’s lawsuit after the Tri-Agencies made a motion for abeyance to consider rescinding or modifying the 2024 Rule. The agencies also issued a non-enforcement policy for the components of the Rule that took effect in January 2025 or were set to take effect in 2026.
Several advocacy organizations and provider-focused trade associations have criticized the decision not to enforce, claiming that it harms agencies’ ability to implement and enforce aspects of the 2021 additions to MHPAEA, while also inhibiting critical steps to ensure more detailed analysis of parity and leaving room for health insurers to take advantage of potential loopholes.
Following the Supreme Court’s decision in Loper Bright v. Raimando, debates over federal agency authority and explicit statutory authorization requirements have become more common. ERIC’s complaint, in large part, focuses on concerns regarding agency overreach in interpreting and enforcing statutes. Lawsuits like this are likely to play a part in setting a precedent for what constitutes an acceptable scope for federal agency interpretation and enforcement of statutes governing their authority.