The Parity Paradox: MHPAEA Compliance for Employers and Insurers During the 2024 Enforcement Pause

The U.S. Departments of Labor, Health and Human Services, and Treasury have announced that they will pause enforcement of the 2024 Mental Health Parity and Addiction Equity Act (MHPAEA) Final Rule (the “2024 Final Rule”) for 18 months.¹ This action, prompted by litigation brought by the ERISA Industry Committee (“ERIC”), complicates compliance obligations of plan sponsors (employers) and health insurers, who must now contend with both the paused Final Rule and continuing MHPAEA obligations.

The MHPAEA Framework: Understanding the Layers

MHPAEA, enacted in 2008, requires certain group health plans and health insurers offering mental health/substance use disorder (MH/SUD) benefits to ensure parity with medical/surgical (M/S) benefits across six benefit classifications. The statute addresses financial elements (copays, deductibles, coinsurance, and out-of-pocket expenses) and non-financial treatment limitations.²

The 2013 Final Rule significantly expanded these requirements.³ In addition to clarifying that MHPAEA limited the use of quantitative treatment limitations (QTLs) (e.g., annual, episode, and lifetime, day and visit limits), it introduced the concept of non-quantitative treatment limitations (NQTLs)—non-numerical restrictions on the scope or duration of benefits that impact access to care (like prior authorization, network admission standards, and medical necessity determinations). Plans must ensure NQTLs are comparable and applied no more stringently for MH/SUD benefits than for M/S benefits, both as written and as applied.

The Consolidated Appropriations Act of 2021 (“CAA 2021”) codified these requirements and added new mandates:⁴

• Comparative analyses must be performed and documented for all NQTLs.
• Plans must submit analyses to regulators upon request.
• Corrective action must be taken within 45 days if analyses are insufficient.
• Participants and beneficiaries must be notified within 7 days of non-compliance determinations.

The 2024 Final Rule: An Ambitious Expansion

The 2024 Final Rule, published September 23, 2024, expanded upon the statutory framework in several ways:⁵

1. “Meaningful Benefits” Standard: Plans must provide “meaningful benefits” for MH/SUD conditions in every classification where meaningful M/S benefits exist. This requires coverage of at least one “core treatment” aligned with generally recognized independent standards of current medical practice.
2. Material Differences in Access: Plans must collect and analyze outcome data (denial rates, network adequacy and utilization, reimbursement levels) to identify disparities. Material differences create a presumption of non-compliance and require corrective action.
3. Fiduciary Certification: ERISA plan fiduciaries must certify they used a prudent process to select and monitor vendors performing comparative analyses.
4. Prohibition on Discriminatory Factors: The rule prohibits using factors or evidentiary standards that systematically disadvantage MH/SUD benefits, including historical data reflecting past disparities.

Many plan sponsors and insurers viewed the 2024 Final Rule as exceeding the statutory mandates of CAA 2021 and raised concerns about the complexity and expense of compliance as well as the short window between the rule’s publication and its effective dates. 

The ERIC Challenge and its Aftermath

ERIC’s⁶ January 17, 2025, lawsuit challenged these provisions as exceeding the Departments’ statutory authority, imposing unlawful benefit mandates, and violating the Administrative Procedure Act.⁷ ERIC argued that the “meaningful benefits” standard contradicted MHPAEA’s explicit statement that it does not require coverage of specific benefits, and that the outcomes-based approach improperly introduced a disparate impact test.

Following President Trump’s Executive Order 14219 directing agency review of regulations that are overly burdensome to businesses,⁸ the Departments requested the case be held in abeyance while the Departments reconsidered the rule.⁹ The court granted this request on May 12, 2025, requiring status reports every 90 days.¹⁰

Understanding the Enforcement Pause

The May 15, 2025 announcement states 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.”¹¹ Crucially, this only applies to provisions in the 2024 Final Rule that are “new in relation to the 2013 final rule.” The Departments clarified that the statutory obligations under MHPAEA, as amended by CAA 2021, “continue to have effect.” The Departments say they “remain committed to ensuring that individuals receive protections under the law in a way that is not unduly burdensome for plans and issuers.” 

The announcement does not clearly indicate, however, which provisions are considered “new” relative to the 2013 Final Rule and the MHPAEA amendments in the CAA 2021. Consequently, there remains uncertainty about which aspects of the 2024 Final Rule are effectively paused. The following chart provides an assessment of key MHPAEA compliance obligations that are likely paused and those that are likely still in effect: 

What’s Paused vs. What Remains

Practical Compliance Strategies

1. Continue Operational Monitoring: While formal outcomes testing may be paused, plan sponsors should continue monitoring for operational disparities.
2. Maintain Robust Documentation: Document all NQTL processes, implementation decisions, and comparative analyses. Documents should be preserved that demonstrate how factors, evidentiary standards, and processes are comparably applied.
3. Review Vendor Relationships: Use this pause to ensure third-party administrators and behavioral health vendors can also provide necessary documentation that supports parity compliance.
4. Litigation Considerations: Plaintiffs can continue to bring MHPAEA claims under the existing legal framework. However, the enforcement pause may influence how courts view compliance standards in ongoing litigation. The date of the claim at issue and the effective date of the challenged plan may influence whether a court would apply the 2024 Final Rule. Notably, following the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024),¹² we expect future litigation to challenge the 2013 and 2024 MHPAEA regulations that do not align with the statutory provisions of MHPAEA, as amended by CAA 2021.
5. Prepare for Future Rulemaking:  Plan sponsors and insurers should continue to monitor developments in light of the Departments’ undertaking of a “broader reexamination” of MHPAEA enforcement. While the Trump administration may consider minimizing or eliminating the outcomes-focused approach, the CAA 2021’s statutory language requiring parity “in operation” may limit how far such changes may go, even in a post-Loper world. 

Key Takeaways

The enforcement pause provides breathing room from a number of the 2024 Final Rule’s complex compliance requirements, but it does not eliminate many MHPAEA compliance obligations. At this time, the pre-2024 MHPAEA framework remains in force, including the requirement to demonstrate compliance through NQTL comparative analyses. Employers should use this time to ensure their documentation demonstrates thoughtful, comparable application of NQTLs while preparing for an evolving regulatory landscape.