On January 17, 2025, the ERISA Industry Committee (ERIC) filed a lawsuit in the U.S. District Court for the District of Columbia, claiming that the 2024 Mental Health Parity and Addiction Equity Act (MHPAEA) Final Rule oversteps legal bounds, breaches the Administrative Procedure Act (APA), improperly delegates the Departments of Labor, Health and Human Services and Treasury’s (Departments) executive power to private entities, and violates the Due Process Clause. ERIC argues that under the Mental Health Parity Act of 1996, the plan was not obligated to assess any disparate impact that a term, applicable to both medical/surgical (M/S) and mental health and substance use disorder (MH/SUD) benefits, might have had on access to MH/SUD benefits. The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) similarly maintained the disparate treatment standard of liability, rather than the disparate impact standard. Moreover, the Departments acknowledged in the 2013 regulations that “disparate results alone” did not constitute a parity violation.
ERIC stresses that “[n]othing in the 2010 interim final rule or 2013 final regulation required parity in access to MH/SUD benefits, nor did they mandate any specific benefits.” However, the “meaningful benefits” requirement in the 2024 Final Rule imposes a benefits mandate, ERIC argues, exceeding the Departments’ statutory authority under MHPAEA. This mandate essentially removes the plans’ discretion in determining which benefits provide affordable, high-quality coverage. Additionally, ERIC contends that it is arbitrary and capricious to subject plans to the whims of third-party clinical literature—and the Departments’ interpretation of that literature—in defining what qualifies as a “core treatment.” For example, the Departments tie the definition of MH/SUD benefits to the Diagnostic and Statistical Manual of Mental Disorders (DSM)—a handbook written and published by the American Psychiatric Association (APA).
ERIC also contends that the finalized certification requirement is unlawful, asserting that it exceeds statutory authority, and the Department of Labor (DOL) failed to provide proper notice regarding the fiduciary certification requirement. This imposition, according to ERIC, was made in violation of the agency’s notice-and-comment obligations under the Administrative Procedure Act (APA). Furthermore, ERIC claims that the comparative analysis requirements are both arbitrary and capricious. Throughout the 2024 Final Rule, the Departments indicate that they will issue “further guidance” on how plans should perform the comparative analysis. ERIC argues that, in the 2024 Final Rule, the Departments failed to clearly specify what the comparative analysis must entail, relying on vague and undefined terms.
ERIC also underscores the potential administrative load the Final Rule places on plan sponsors. The mandate for comprehensive documentation and ongoing compliance monitoring may result in heightened expenses and operational hurdles for employers. ERIC contends that these challenges could ultimately dissuade employers from providing extensive MH/SUD benefits, thus undermining the very objective of fostering parity in health coverage.
In its filing, ERIC calls for the U.S. District Court to invalidate the Final Rule on the grounds of overreach and non-compliance with statutory and regulatory frameworks. The Departments have 60 days to file responsive pleadings.
ERIC’s lawsuit underscores the ongoing legal tension surrounding the interpretation and implementation of mental health parity laws. The outcome of this case could have significant implications for health plan administrators and beneficiaries alike, as it challenges the scope of regulatory authority and the balance between ensuring mental health parity and preserving plan flexibility. The court’s decision will likely influence future regulatory actions and guidelines, potentially reshaping the landscape of behavioral health benefits and coverage standards.
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