The Departments of Labor, Health and Human Services, and the Treasury (the “Departments”) recently released their fourth annual MHPAEA Report to Congress, as required under the Consolidated Appropriations Act, 2021 (CAA). The report highlights continued enforcement and recurring compliance issues, especially in plan design and the use of nonquantitative treatment limitations (NQTLs). The report also offers practical guidance for employer plan sponsors to strengthen MHPAEA compliance.

Background 

MHPAEA requires group health plans and insurers that offer mental health or substance use disorder (MH/SUD) benefits to do so no less favorably than medical/surgical (M/S) benefits. This includes financial requirements (e.g., copays), treatment limitations (e.g., frequency of treatment, number of visits, days of coverage), and NQTLs such as prior authorization requirements, step therapy/fail-first policies, and limitations based on medical necessity (note this is not an exhaustive list). 

Since February 2021, the CAA has required plans that impose NQTLs on MH/SUD benefits to conduct and document a comparative analysis showing compliance with MHPAEA. The Departments must report annually to Congress on these analyses and overall MHPAEA enforcement, which summarizes enforcement activities, describes the comparative analyses obtained from plans and issuers, and identifies instances of noncompliance with MHPAEA.

For more information on the comparative analysis requirement, see our article Guidance Released on the New Mental Health Parity Comparative Analysis Requirements. 

2025 Report to Congress

The 2025 Report summarizes recent MHPAEA enforcement efforts of the Employee Benefits Security Administration (EBSA) and Centers for Medicare & Medicaid Services (CMS) for the reporting period (August 1, 2023, through July 31, 2025) and in doing so, provides awareness of overall MHPAEA ongoing compliance issues consistent with prior reports (see Mental Health Parity Compliance Concerns Persist: 2024 Key Findings Report to Congress).

Key highlights for employer plan sponsors include:

  • Enforcement: EBSA issued 42 requests for comparative analyses (30 to plans, 12 to issuers) across 28 investigations, targeting NQTLs that most affect access to MH/SUD care, especially network adequacy and impermissible treatment exclusions. Similarly, CMS issued 43 letters requesting comparative analyses (33 to plans, 10 to issuers) across 43 investigations.
  • Persistent Comparative Analysis Deficiencies: Despite several years of enforcement, CMS has seen little overall improvement in the quality of initial analyses, though some plans are providing more robust data and explanations after feedback. As in prior years, many analyses were incomplete or insufficient at the outset. CMS reported that none were adequate on first submission, continuing the multi-year pattern. Plans often had to provide additional materials, sometimes across multiple follow-ups, before reviews could be completed. More thorough analyses generally led to faster resolutions and better outcomes for participants.
  • Enforcement Approach: EBSA and CMS generally gave plans and issuers multiple chances to correct issues before issuing a formal noncompliance determination. Even when initial comparative analyses were deficient, agencies often held off on insufficiency letters or noncompliance determinations if the plan or issuer took concrete steps to come into compliance. Plans that addressed concerns promptly, sometimes even before submitting a complete analysis, often avoided formal noncompliance, with EBSA closing investigations after documenting corrective action. Removing problematic limitations, especially exclusions or limits that applied only to MH/SUD benefits (and not to M/S benefits within the same classification), was a frequent reason plans avoided formal findings of noncompliance.
  • Common NQTL Issues:
    • Provider network adequacy;
    • Prior authorization and utilization review requirements;
    • Concurrent care review requirements; and
    • Exclusions of key MH/SUD treatments (e.g., ABA therapy and methadone maintenance treatment).
  • Vendor Oversight: Deficiencies often stemmed from third-party prepared analyses that lacked alignment with actual plan operations, resulting in inconsistent or unsupported explanations. In addition, many plan sponsors incorrectly assumed that their third-party administrator (TPA) or their insurance carriers were handling MHPAEA compliance or preparing the required analysis, highlighting that ultimate responsibility rests with the employer as plan sponsor.

The report also includes examples of noncompliance and enforcement outcomes that offer practical takeaways for employer plan sponsors, such as:

  • EBSA’s San Francisco Regional Office identified a large self-funded health plan whose participants sought out-of-network providers more often for MH/SUD than for M/S services, particularly for inpatient care. EBSA found that the plan and its service provider used noncomparable processes, strategies, evidentiary standards, and other factors to measure provider access, monitor network adequacy, and pay network providers. As a result, the network administrator revised and expanded how it measures the adequacy of its network on a national level, and it adopted a new network adequacy policy for addressing network gaps for one of its regional markets. The plan separately enacted certain balance billing protections for its participants, increased efforts to help participants find network providers, and implemented its own policy to monitor its chosen network, including a review of out-of-network utilization.

See the Report for additional examples and details on the plans that received final determination of noncompliance.

Employer Takeaways

The report emphasizes that the Departments continue to enforce MHPAEA to protect individuals’ access to MH/SUD care, while aiming to minimize unnecessary administrative burden and bring plans and issuers into compliance. While the report does not introduce new employer obligations, it does offer critical insights into maintaining compliance that helps shape employer best practices, such as:

  • Regularly discussing MHPAEA and NQTL compliance obligations with carrier or TPAs and requesting and reviewing comparative analyses to ensure they reflect plan terms.
  • Working in conjunction with carriers and TPAs when implementing plan designs that impose NQTLs. For example, employers should review their plan’s network adequacy, evaluate access standards, reimbursement rates, and provider availability for MH/SUD as compared to M/S benefits; and remove any categorical exclusions that apply only to MH/SUD benefits.
  • As we await further MHPAEA guidance (see Mental Health Parity Final Rules: Enforcement Paused), employers should respond promptly to any agency inquiries and document corrective actions, which may help avoid a final determination of noncompliance.

As noted in ongoing litigation (ERIC vs. HHS), the Departments are targeting December 31, 2026, to issue revised MHPAEA regulations, with an interim update expected by September 30, 2026. Sequoia will continue to monitor developments and provide timely updates to employers as new guidance emerges.

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.   

Diane Cross

Diane Cross

Diane is a Compliance Director 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.