Key takeaways
- Trump administration is temporarily halting enforcement of a Biden-era final rule for MHPAEA
- HHS and DOL requested and received a stay of an ongoing lawsuit challenging the final rule
- The Departments asserted in court motion that they may modify or rescind challenged parity rule as they reexamine MHPAEA enforcement program
The Trump administration is actively reconsidering a Mental Health Parity and Addiction Equity Act (MHPAEA) final rule issued by the Biden administration in late 2024 and has indicated it will implement a partial non-enforcement policy for portions of the rule applicable to the 2025 and 2026 plan years while the government reexamines its MHPAEA enforcement program.
On May 9, 2025, the Departments of Labor and Health and Human Services (the Departments) requested a pause in the litigation of an ongoing challenge against the Biden-era final rule (the Final Rule) filed by the ERISA Industry Committee (ERIC). The court granted the request and stayed the case on May 12, 2025. The Final Rule significantly revamped and expanded the rules for non-quantitative treatment limitations (NQTLs) under MHPAEA. In their motion to hold the case in abeyance, the Departments stated that they may ultimately decide to modify or rescind the Final Rule and that they intend to partially pause relevant enforcement activities until their review is complete. The Departments also indicated that they expect to publicly release an enforcement policy memorializing their intention to not enforce portions of the Final Rule.
The government’s stay comes as welcome news not only to ERIC (who agreed to the pause but reserved the right to resume litigation if necessary) but also to payors who would have faced burdensome requirements had the rule remained in place and been strictly enforced. While certain provisions will not come into effect until January 2026, the Final Rule defined new NQTL comparative analysis requirements and requires ERISA plan fiduciaries to certify that they have prudently selected and monitored qualified service providers to perform these analyses. The Final Rule also introduced a “meaningful benefits” requirement mandating coverage of meaningful benefits for mental health and substance use disorder in every classification where meaningful medical or surgical benefits are offered.
Critics argued that the new requirements imposed an untenable burden on payors, instituted an unreasonably short compliance timeline, and would ultimately discourage plans from covering mental and behavioral health care. In January 2025, ERIC filed its legal challenge, contending that the Final Rule unlawfully exceeds statutory authority by imposing de facto benefits mandates, creates vague and burdensome requirements, and improperly delegates regulatory power. ERIC sought to have the rule (or at least its challenged provisions) vacated as unlawful, procedurally improper, arbitrary and capricious, and contrary to the Administrative Procedure Act and constitutional requirements.
Given the government’s posture, however, ERIC may achieve its desired outcome without a court win. While it remains to be seen whether the government will choose to modify the Final Rule changes to the NQTL rules under MHPAEA or rescind them entirely, the government’s recent actions suggest that the Trump administration may significantly depart from the existing approach to mental health parity. The parties are required to provide a status update to the court by August 7, 2025. For now, payors should expect a temporary reprieve from MHPAEA enforcement actions relating to the Final Rule changes to the NQTL rules that went into effect in 2025 – but should stay tuned for any further government actions that may clarify the administration’s perspective on mental health parity overall.
Client Alert 2025-134