On January 17, 2025, the ERISA Industry Committee (“ERIC”) filed a lawsuit against the U.S. Department of Health and Human Services and other federal agencies, seeking to invalidate the final rules under the Mental Health Parity and Addiction Equity Act (“MHPAEA”). The lawsuit, which was filed in the U.S. District Court for the District of Columbia, argues that the rules were issued in violation of the Administrative Procedure Act (“APA”) and should be set aside.
The MHPAEA and Regulatory Changes
Enacted in 2008, MHPAEA requires that group health plans and insurance issuers provide mental health and substance use disorder (“MH/SUD”) benefits on equal terms with medical/surgical (“M/S”) benefits. This includes restrictions on financial and treatment limitations to ensure parity. Following proposed rules in July 2023, the Departments of Labor, Treasury, and Health and Human Services issued final rules on September 9, 2024, which took effect on January 1, 2025.
Key provisions include:
- Enhanced Comparative Analysis Requirements: Plans must provide a written list of all non-quantitative treatment limitations and demonstrate ongoing compliance through detailed comparative analyses, rather than responding reactively to audits.
- Fiduciary Certification: A named plan fiduciary must certify that any comparative analysis performed under the MHPAEA was done in accordance with applicable law and regulations.
- New Standards for Coverage: Beginning in 2026, plans offering MH/SUD benefits must provide “meaningful benefits” for all covered conditions and evaluate access disparities based on outcomes data.
ERIC’s Legal Challenge
ERIC, a nonprofit representing large employer health plan sponsors, argues that several provisions of the final rules are unlawful, vague, and exceed the agencies’ statutory authority.
The complaint includes five key legal claims:
- Exceeding Statutory Authority: ERIC contends that requiring “meaningful benefits” and evaluating “material differences in access” unlawfully mandates coverage beyond what MHPAEA requires because MHPAEA only required parity in plan terms and in the application of such terms to MH/SUD and M/S benefits.
- Arbitrary and Capricious Rulemaking: The lawsuit argues that the rules impose vague, unreasonable burdens on plans and fiduciaries.
- Violation of APA’s Notice-and-Comment Requirements: ERIC claims that incorporating evolving private third-party clinical standards deprived stakeholders of a fair opportunity to comment.
- Due Process Concerns: The lawsuit asserts that the rules’ ambiguities deny fiduciaries fair notice of their obligations.
- Unconstitutional Delegation of Power: By referencing private third-party clinical standards, the lawsuit alleges that the final rules provide the agencies with undue legislative and executive authority.
The lawsuit seeks to vacate the final rules or, at a minimum, enjoin the contested provisions.
Legal and Industry Implications
This case is one of several recent challenges to federal agency regulations following the Supreme Court of the United States’ decision in Loper Bright Enterprises v. Raimondo, which ended the longstanding doctrine of “Chevron deference.” With courts now granting less weight to agency interpretations, ERIC’s challenge could significantly impact how MHPAEA is enforced going forward.
A major concern raised by ERIC is that the increasing regulatory burden on employers may lead them to drop MH/SUD coverage altogether, potentially undermining MHPAEA’s intended goal of ensuring parity. Additionally, the incoming Trump administration could take independent action to amend or repeal the final rules.
Next Steps and Compliance Considerations
The federal agencies have until March 18, 2025, to respond to ERIC’s complaint. Despite the legal challenge, the MHPAEA final rules remain in effect unless invalidated or enjoined. Employers and plan administrators must continue working toward compliance, particularly with respect to the comparative analysis and fiduciary certification requirements. We will continue to monitor the legal challenge to the final rules and provide updates as it unfolds.
