What Relief Does the Mental Health Parity and Addiction Equity Act Nonenforcement Policy Actually Provide to Employers?

Employers navigating the complexities of the Mental Health Parity and Addiction Equity Act ("MHPAEA") may find themselves questioning the true impact of the federal government's recently issued nonenforcement policy. This post delves into the nuances of that policy, issued on May 15, 2025, by the U.S. Departments of Labor, Health and Human Services, and Treasury (collectively the "Departments") and clarifies what relief it actually provides. Understanding these details is crucial for employers to effectively manage their compliance obligations, understand the scope of enforcement actions and anticipate future regulatory changes.

Earlier this month, the Departments issued a statement of nonenforcement of an MHPAEA final rule, which became effective on November 22, 2024, with staggered applicability dates (the "2024 Final Rule"). A closer look at the statement indicates the nonenforcement policy is narrower than it seemed at first blush. As described in greater detail below, the nonenforcement policy only applies to those provisions of the 2024 Final Rule that were new in relation to the proposed final rule issued on August 3, 2023. In addition, the Departments make clear that MPHAEA's statutory obligations as amended by the Consolidated Appropriations Act, 2021 ("CAA"), continue to be in effect. This Insight provides background on the 2024 Final Rule and the duration of the nonenforcement policy, as well as detailing which provisions of the 2024 Final Rule are still being enforced and which currently are not.

What MHPAEA Changes Happened Under the 2024 Final Rule?

The 2024 Final Rule changed prior MHPAEA compliance requirements in significant ways:

1. It imposed a "meaningful benefits" standard such that if a GHP provides any benefit for a mental health or substance use disorder ("MH/SUD"), it must provide meaningful MH/SUD benefits in every classification under which medical/surgical ("M/S") benefits are provided. The effect of this requirement is that a GHP could be required to cover additional MH/SUD benefits in other classifications than it may have initially provided.
   
   
2. It added more complexity to the required comparison of Nonquantitative Treatment Limitations ("NQTLs"). While the CAA required a GHP or issuer perform a comparative analysis of NQTLs and demonstrate that such NQTLs are comparable between MH/SUD benefits and M/S benefits, both as written and in operation, the 2024 Final Rule announced a new "material difference in access" operational standard, noting, for instance, that "material differences" in outcomes could suggest noncompliance. For example, if a GHP imposes a requirement that a patient see a generalist before being referred to a specialist and that requirement has a disparate impact on access to MH/SUD benefits, the Departments argue that parity has not been achieved. For parity to exist, a GHP might be required to expand its MH/SUD provider network. The 2024 Final Rule required that the GHP or issuer collect and evaluate data in a manner reasonably designed to assess any disparate impact on the utilization of NQTLs.
   
   
3. It required a GHP fiduciary to certify the NQTL comparative analysis. The certification had to state that the fiduciary prudently selected and monitored a third party to conduct the analysis, reviewed the comparative analysis, and found it to comply with MHPAEA.
   
   
4. It shortened the response time frame to 10 business days for a GHP to respond to a request for its NQTL comparative analysis.
   
   
5. It gave GHPs and issuers little time to comply with the new requirements. The effective date was generally January 1, 2025, but the rules were published only about a month before.

Soon after the 2024 Final Rule's effective date, the ERISA Industry Committee sued the Departments in federal court in the District of Columbia ("ERIC Litigation"). The lawsuit alleged that the 2024 Final Rule or, at a minimum, the above-referenced changes from the proposed final rule were unlawful, procedurally improper, arbitrary and capricious, and contrary to the Administrative Procedure Act. This is in addition to the holding in Loper Bright Enterprises v. Raimondo (overturning Chevron deference), which provided that courts are not required to give deference to guidance from the Departments.

The Duration of the Nonenforcement Policy

Prior to their issuance of the nonenforcement policy, the Departments had agreed the ERIC Litigation would be held in abeyance while they considered modifying or amending the 2024 Final Rule. As part of the nonenforcement policy, the Departments announced their nonenforcement policy will extend until a final decision in the ERIC Litigation is reached, plus an additional 18 months. However, the nonenforcement relief only extends to certain provisions of the 2024 Final Rule, which were new in relation to the 2023 proposed final rule as discussed in this prior DWT Insight.

The Departments noted that the MHPAEA statutory obligations, as amended by CAA, continue to be in effect. While the Departments remain committed to MHPAEA, the Departments indicated they will also undertake a broader reexamination of each Department's enforcement approach under MHPAEA, including those provisions amended by the CAA. It should also be noted the nonenforcement policy does not apply to state law, so a state insurance commissioner could still take action against insured plans.

MHPAEA and Related Guidance: What Are an Employer's Current Compliance Obligations in Light of the Nonenforcement Policy?

GHPs and issuers must continue to show compliance with the following provisions of MPHAEA:

1. As required by 2013 MHPAEA final regulations and the 2023 proposed final rule, a GHP or issuer must show parity with respect to quantitative treatment limitations of "QTLs" (i.e., numerical limits on treatments) and lifetime, annual, and cumulative financial treatment limitations;
   
   
2. A GHP or issuer must also establish that NQTLs on MH/SUD benefits are not more stringent than those applied to M/S benefits;
   
   
3. As required by the CAA, a GHP or issuer must have a detailed, written comparison of NQTLs to establish that such limitations are not more stringent as applied to MH/SUD than as applied to M/S benefits; and
   
   
4. An insured GHP or health insurance issuer must still comply with all of the requirements of state insurance law.

Due to the nonenforcement policy, GHPs and issuers do not have to comply with the following requirements of the 2024 Final Rule:

1. If MH/SUD benefits are covered in any classification, a GHP or issuer is not required to establish that MH/SUD benefits in every classification are "meaningful benefits";
   
   
2. A GHP or issuer is not required to demonstrate operational compliance by collecting data to demonstrate no material differences in outcomes or access between MH/SUD benefits and M/S benefits;
   
   
3. A GHP or issuer is not required to have a fiduciary certify compliance with MHPAEA with respect to an NQTL comparative analysis; and
   
   
4. A GHP or issuer will not have to comply with any requirement of the 2024 Final Rule that had an effective date of 2026 or later, as the provisions with these later effective dates were not in the 2023 proposed final rule.

Summary

The Departments' nonenforcement policy does not mean an employer (even one under a current MHPAEA examination) is relieved of compliance with MPHAEA. However, as noted above, such compliance can be less burdensome (and, in particular, the NQTL comparative analysis can be less detailed without fear of reprisal) during the nonenforcement period, which is likely to last until at least 2027 and likely 2028 or beyond. Employers, therefore, should continue to work on their general compliance with the MPHAEA under the Departments' guidance in place prior to the 2024 Final Rule.