Employer Group Sues to Block Mental Health Parity Rules

Quick Hits

• A large employer advocacy group sued three federal agencies over their final rules implementing the federal mental health parity law applicable to employer-sponsored health plans.
• The industry group argues the federal agencies did not have the authority to create a benefit mandate.
• The federal agencies have until March 17, 2025, to respond to the complaint. They have argued that the mental health parity rules are not a benefit mandate.
• In the meantime, the federal agencies responsible for enforcement of mental health parity rules have been asked to postpone the effective date of the final rules.

The ERISA Industry Committee (ERIC), a large employer advocacy group, is asking a federal court to vacate certain provisions or the entire 2024 final regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA), as well as permanently enjoin enforcement of the specific provisions or the regulations overall.

The complaint was filed on January 17, 2025, in the U.S. District Court for the District of Columbia against the U.S. Departments of Health and Human Services, Treasury, and Labor.

In its complaint, ERIC specifically criticizes requirements in the MHPAEA rules, including those that:

• require named fiduciaries to make certifications regarding the “comparative analysis” prepared for the plan;
• require plans to comply with the final rules generally as of January 1, 2025 (less than four months following publication of the final rules); and
• require fiduciaries to determine whether a service provider is “qualified” to do a comparative analysis.

ERIC generally argues that these 2025 requirements, as well as several requirements that would take effect in 2026, exceed the agencies’ authority to implement the MHPAEA and related statutes, or are too imprecise to serve as a legitimate basis for enforcement against employer-sponsored health plans.

On September 23, 2024, the federal agencies published final rules requiring group health plans to provide “meaningful benefits” for mental health or substance use disorders in coverage categories where medical or surgical benefits are also provided. Meaningful benefits cover core treatments, defined as standard treatments or interventions indicated by “generally recognized independent standards of current medical practice.”

The bulk of the final rules took effect on January 1, 2025, with some provisions scheduled to take effect on January 1, 2026. The meaningful benefits requirement is slated to become effective on January 1, 2026.

The lawsuit argues that the meaningful benefits requirement exceeds the federal agencies’ authority because it imposes a benefits mandate. It also claims the federal agencies violated the Administrative Procedure Act’s notice and comment requirements.

“All that is required is parity in particular plan terms and their application, not parity in access to mental health/substance use disorder benefits, much less provision of particular benefits,” the lawsuit states. “Congress has repeatedly made clear that the MHPAEA is not a benefits mandate, and it therefore does not require health plans to provide any particular mental health/substance use disorder benefits, or even to provide mental health/substance use disorder benefits at all.”

The lawsuit also argues that the meaningful benefits requirement is antithetical to the Employee Retirement Income Security Act (ERISA), which governs most private health plans.

In the final rule, the federal agencies emphasized that the meaningful benefits requirement “is not a coverage mandate, but rather another approach to ensuring parity between mental health or substance use disorder benefits and medical/surgical benefits in a classification.”

On February 20, 2025, ERIC announced that it formally requested the federal agencies to postpone the effective date of the regulations while its lawsuit is pending. Relying on 5 U.S.C. 705, ERIC asked the regulators to immediately exercise their authority to issue a temporary stay of the final rules by February 25, 2025.

Tom Christina, former shareholder in the Ogletree Deakins Employee Benefits and Executive Compensation Practice Group and current executive director of the ERIC Legal Center, explained the impact on employers: “ERIC and stakeholders across the employer and behavioral health community long cautioned that the Biden administration’s mental health parity rule could create unintended adverse consequences. Now that portions of the final rule have gone into effect, those consequences threaten to raise costs and jeopardize patients’ access to safe, effective, and medically necessary mental health support. Taking action to stay the mental health parity rule provides needed certainty to all parties as the suit works its way through the judicial process.”

Next Steps

While most provisions in the final rules are already effective, the meaningful benefits requirement is scheduled to take effect on January 1, 2026. It is unclear whether under new leadership the DOL, HHS, and Treasury will grant ERIC’s request to postpone the effective date of the final rule as a whole or what the federal court will ultimately decide in this case. If the court finds in favor of ERIC, then the obligation to provide “meaningful benefits” for mental illness and addiction as the regulations require could become moot, while the statute itself remains in force. 

In the meantime, absent clear guidance as to how to comply with the statutory requirements, employers may want to review the terms of their group health plans for compliance with the mental health parity requirements and work closely with their plan administrators and other professionals to document their analysis of how the plan meets the mental health parity requirements in operation based upon available data and guidance.

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments and will provide updates on the Employee Benefits and Executive Compensation blog as new information becomes available.

Mark E. Schmidtke is a shareholder in Ogletree Deakins’ Chicago and Indianapolis offices.

Stephanie A. Smithey is a shareholder in Ogletree Deakins’ Indianapolis office.

Timothy J. Stanton is a shareholder in Ogletree Deakins’ Chicago office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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