On May 15, the Department of Treasury , Department of Labor, and Department of Health and Human Services, (collectively, the “Departments”) released a statement pausing enforcement of the 2024 Final Rules under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). (See our prior article for more information, Mental Health Parity Final Rules Released). While employers are still responsible for MHPAEA compliance, including the written comparative analysis requirement, the requirements described in the 2024 Final Rules will not be enforced for a period of time, described further below.

Compliance Snapshot

  • Employer plan sponsors are still required to comply with the written comparative analysis requirement, as provided by the Consolidated Appropriations Act 2021 (CAA 2021). However, during the period of nonenforcement, employer plan sponsors and issuers do not have to comply with the 2024 Final Rules comparative analysis content requirements, including the fiduciary certification requirement (among other items).
  • The Departments will consider whether the 2024 Final Rule will be rescinded or modified during the period of non-enforcement.

Background

MHPAEA applies to group health plans and insurers that provide coverage for mental health and substance use disorder (MH/SUD) benefits and prohibits certain group health plans from imposing higher financial requirements (e.g., insurance and copays) or stricter treatment limitations (e.g., frequency of treatment, number of visits, days of coverage) on MH/SUD benefits as compared to medical and surgical (M/S) benefits. Among its requirements, plans and issuers are prohibited from imposing more restrictive non-quantitative treatment limitations (NQTLs) on MH/SUD benefits than M/S claims. Examples of NQTLs include (but are not limited to) prior authorization requirements, step therapy/fail-first policies, and limitations based on medical necessity.

In response to the Departments observing consistent noncompliance with NQTL plan design and application, the CAA 2021 amended the MHPAEA, requiring group health plans that offer MH/SUD benefits (and that impose NQTLs) to perform and document a comparative analysis on the design and application of NQTLs on MH/SUD benefits (effective since February 10, 2021). For more information, see our article Guidance Released on the New Mental Health Parity Comparative Analysis Requirements. To help provide clarity and address compliance with MHPAEA and the comparative analysis requirement, the Departments published its Final Rules in September 2024.

Subsequently, the ERISA Industry Commission (“ERIC”) filed a lawsuit challenging the Final Rules, including the comparative analysis content requirements and fiduciary certification, noting (among other matters) that the Final Rules are arbitrary and capricious and contrary to law. In addition, Executive Order 14219, Ensuring Lawful Governance and Implementing the President’s Department of Government Efficiency Deregulatory Initiative, directs agencies to identify regulations that undermine the national interest, such as by imposing undue burdens on small businesses or significant costs on private parties that are not outweighed by public benefits. As a result, the Departments issued their recent statement pausing enforcement of the Final Rules.

Nonenforcement Period

Per the issued statement, “the Departments will not enforce the 2024 Final Rule or otherwise pursue enforcement actions based on a failure to comply that occurs prior to a final decision in the litigation, plus an additional 18 months. This enforcement relief applies only with respect to those portions of the 2024 Final Rule that are new in relation to the 2013 Final Rule. The Departments note that MHPAEA’s statutory obligations, as amended by the CAA, 2021, continue to have effect.”

The Departments further explain that they will undertake a “broader reexamination of each department’s respective enforcement approach under MHPAEA, including those provisions amended by the CAA, 2021.” While plans and issuers may continue to refer to the 2013 Final Rule, FAQs Part 45, and other subregulatory guidance issued by the Departments under MHPAEA, the Departments may make updates to the guidance as part of their reexamination. See our article, Guidance Released on the New Mental Health Parity Comparative Analysis Requirements, which discusses comparative analysis compliance relying on the 2013 Final Rule and FAQs Part 45.

Employer Impact

It is important to note that during the period of nonenforcement (lasting through 18 months following the end of the ERIC litigation), employers are still required to maintain written NQTL analyses pursuant to the CAA 2021; however, the comparative analysis will not require a fiduciary certification, data collection, and other requirements included in the 2024 Final Rule (for more information on what requirements are ‘paused’, see our prior article on the 2024 Final Rules, Mental Health Parity Final Rules Released).

Additional employer takeaways:

  • Employers with fully insured plans should continue to work with their carriers to ensure the carrier is performing the NQTL analyses.
  • Employers with self-insured plans should continue to work with their third-party administrator (TPA) or MHPAEA vendor to ensure compliance with MHPAEA. In addition, employers should confirm that their contracts with their TPA require that the TPA complete and/or provide all of the data necessary for another party/vendor to complete the NQTL analyses (as needed), and that the TPA will assist in providing any and all additional data requested by the DOL in the event of an audit.
    • Employers with any carved-out coverage (e.g., pharmacy) should ensure the TPA for those benefits is assisting with and/or completing NQTL analyses relative to the specific benefits involved, or assisting a qualified service provider who is performing the comparative analysis.
  • Employers should be prepared to submit the plan’s comparative analyses to the DOL or plan participants upon request.

Sequoia will continue to monitor and communicate important employer updates surrounding MHPAEA as they occur.

Additional Resources

Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources. 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog. © 2025 Sequoia Consulting Group. All Rights Reserved.

Diane Cross — Diane is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Diane enjoys spending time with her family, live music, and cycling.