On May 15, 2025, the DOL, HHS, and IRS (the departments) issued a statement indicating they will not enforce the MHPAEA 2024 final rule (the 2024 final rule) while they reconsider whether to rescind or modify it. This nonenforcement policy is welcome news for many plan sponsors. However, it does not alleviate their fiduciary obligations to otherwise comply with MHPAEA, including the CAA 2021 nonquantitative treatment limitation (NQTL) comparative analysis requirement.
Background
On September 9, 2024, the departments issued a final rule that amended the existing 2013 MHPAEA regulations and added new rules implementing the CAA 2021 NQTL comparative analysis requirements. The 2024 final rule, which became effective on November 22, 2024, has staggered applicability dates of plan years starting on or after January 1, 2025, and plan years starting on or after January 1, 2026.
On January 17, 2025, the ERISA Industry Committee (ERIC) filed a lawsuit in the U.S. District Court for DC, challenging certain provisions of the 2024 final rule as being arbitrary and capricious and contrary to law, among other reasons. The challenged provisions include the fiduciary certification requirement, under which ERISA plan sponsors must certify that they have satisfied their fiduciary obligation to prudently select and monitor a qualified service provider to perform the NQTL comparative analysis. The lawsuit also alleged that the 2024 final rule’s “meaningful benefits” requirement was contrary to MHPAEA by mandating certain coverage (i.e., effectively dictating the types of mental health and substance use disorder (MH/SUD) inpatient, outpatient, and pharmacy treatment that plans must cover if they cover those categories of treatment), thus stripping plans of their discretion to define plan terms governing coverage and benefits. ERIC further objected to the 2024 final rules’ focus on outcomes-based data to evaluate access to MH/SUD benefits, stating this approach exceeds MHPAEA’s statutory requirements for parity in plan terms and the application of those terms, not in the outcomes they produce.
Additionally, on February 19, 2025, the Trump administration issued Executive Order 14219, which directs federal agencies to review regulations to identify those that may undermine the national interest, including by imposing undue burdens on small businesses or significant costs upon private parties that are not outweighed by public benefits. In such cases, federal agencies must exercise enforcement discretion to ensure lawful governance. This broad order, although not specifically directed at MHPAEA regulations, would encompass a review of the 2024 final rule.
Departments’ Nonenforcement Policy
Against this backdrop, the departments requested that the ERIC litigation be paused while they revisit the 2024 final rule, including whether to propose rules to rescind or modify it through notice and comment rulemaking. The departments will not enforce the 2024 final rule or pursue enforcement actions based on a failure to comply that occurs before a final decision in the litigation, plus an additional 18 months. Importantly, this enforcement relief applies only with respect to those portions of the 2024 final rule that are new in relation to the 2013 regulations. MHPAEA’s statutory obligations, as amended by the CAA 2021, otherwise remain in effect.
According to the statement, the departments intend to conduct a broader review of their MHPAEA enforcement approach, including with respect to the CAA 2021 amendments, and may make updates to related informal guidance as deemed appropriate.
Employer Takeaway
Employers should be aware of this update, which suspends the application of the 2024 final rule, including the fiduciary certification requirement. However, as noted previously, employers must still comply with MHPAEA, including the CAA 2021 NQTL comparative analysis requirement, and should document their compliance efforts. Employers should also continue to monitor participant complaints and litigation regarding access to MH/SUD benefits.
In their statement, the departments expressed their commitment to preserving the critical protections that MHPAEA provides to participants who need MH/SUD treatment, but in a way that is not unduly burdensome for plans. The departments’ recognition of the need to strike a delicate balance to ensure MHPAEA’s compliance obligations do not outweigh their intended benefits is a positive development for plan sponsors.
We will be monitoring closely for any related rulemaking or other guidance and will report relevant updates in Compliance Corner. For insights on navigating MHPAEA compliance during these uncertain times and the CAA 2021 MHPAEA NQTL comparative analysis requirements, please see our article MHPAEA Compliance in an Uncertain Regulatory Environment and ask your broker or consultant for a copy of the NFP publication MHPAEA NQTL Comparative Analysis: A Guide for Employers.