On February 20, 2025, the ERISA Industry Committee (ERIC) announced that its legal counsel submitted a letter to the U.S. Departments of Labor (DOL), Health and Human Services (HHS) and Treasury, requesting a stay of enforcement of the September 2024 Mental Health Parity and Addiction Equity Act (MHPAEA) Final Rule. In the letter, ERIC urged the Departments to exercise their authority under 5 U.S.C. § 705 to postpone the effective date of the Final Rule while litigation challenging its validity is ongoing. This request marks a significant development in the legal landscape surrounding mental health parity laws and could have far-reaching implications for employers, health plans, and other stakeholders in the health insurance industry.
“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.”
—Tom Christina, Executive Director of the ERIC Legal Center
In January 2025, ERIC filed a complaint in federal court seeking to invalidate the Final Rule, alleging overreach and non-compliance with statutory frameworks. ERIC notably refrained from requesting a temporary restraining order (TRO). A TRO in the context of a rulemaking pauses the implementation of a new rule by preventing an agency from enforcing it until the court can fully review its legality. ERIC’s current request for relief under 5 U.S.C. § 705 signals its ongoing concern about the burdens of the Final Rule and its potential to harm those attempting to comply with the updated MHPAEA requirements.
In its letter, ERIC relies on Section 705 in Title 5 of the U.S. Code, which provides that the Departments “may postpone the effective date of action taken by it, pending judicial review.” ERIC formally requested that the Departments invoke this authority and issue a stay by Tuesday, February 25.
ERIC reiterates the concerns outlined in its complaint and argues that the Final Rule’s new requirements will fundamentally alter the mental health and substance use disorder (MH/SUD) benefits currently offered, while dramatically increasing the costs and complexity of providing such coverage.
The Final Rule took effect on November 22, 2024. However, the Final Rule’s requirements did not apply to group health plans until the first plan year beginning on or after January 1, 2025. Recognizing the challenges of implementing these changes, the Departments further delayed the applicability of certain provisions to January 1, 2026. These delayed provisions include:
- The “meaningful benefits” standard;
- Prohibitions on discriminatory factors and evidentiary standards;
- Data evaluation requirements; and
- Related requirements for comparative analyses.
ERIC contends that the requirements of the Final Rule impose significant compliance challenges and costs. Employers and health plans are already planning for the 2026 plan year and must build new systems to collect and store data, reprogram existing systems, reanalyze outcomes, and redesign benefits to meet the Final Rule’s standards. ERIC argues that these costs will continue to mount unless the Departments issue a stay on enforcing the Final Rule.
In the letter, ERIC points to prior instances where federal agencies have invoked 5 U.S.C. § 705 to delay enforcement of controversial rules pending litigation. For example, ERIC cites to an action taking by the DOL during the Obama administration postponing the effective date of its “wage rule” as support. ERIC argues that the same rationale applies here, as a stay would provide necessary relief to impacted entities while the court evaluates the legal merits of the Final Rule.
The implications of a stay on the Final Rule are multifaceted. If the Departments grant ERIC’s request, enforcement of the Final Rule would be temporarily halted, allowing the courts to fully consider the legal arguments and potential impacts before any irreparable injury, loss, or damages take effect. A stay would preserve the court’s ability to provide meaningful relief if the Final Rule if ultimately invalidated. A stay would also provide immediate relief to employers and health plans, particularly small and medium-sized businesses that may lack the resources to swiftly implement the necessary changes. Additionally, it would give all stakeholders additional time to prepare for compliance with the Final Rule’s complex standards and mitigate potential operational disruptions.
ERIC asserts that the stay would balance the interests of all parties by preventing premature enforcement of the Final Rule while ensuring that the litigation process can proceed without causing undue harm. A stay would provide temporary relief from the immediate compliance obligations, allowing more time to adapt to the regulatory changes while the courts deliberate on the Final Rule’s legality. The outcome of the Court’s decision will determine the rules that insurers and employer health plans operate under with respect to MH/SUD benefits.
[View source.]
