May 2026
Diana Craig, Director, Benefits Compliance
March saw two important developments with respect to the Mental Health Parity and Addiction Equity Act (“MHPAEA”). Most notably, the Departments of Labor (“DOL”), Health and Human Services (“HHS”), and the Treasury (collectively “the Departments”) stated that they will no longer defend the 2024 Final Rule Related to the Mental Health Parity and Addiction Equity Act in pending litigation and instead, will release a new final rule by the end of the year. The Departments also published their fourth annual report to Congress on MHPAEA enforcement.
MHPAEA litigation update
The 2024 Final Rule, which became effective on November 22, 2024, had staggered effective dates starting on January 1, 2025, and included new compliance requirements and additional data elements that plans would have to include in a comparative analysis of Non-Quantitative Treatment Limits (“NQTLs”) if audited by DOL or HHS. In general terms, an NQTL is a non-numeric restriction on the scope or duration of benefits, such as preauthorization requirements, step-therapy requirements, and network admission standards.
On January 17, 2025, the ERISA Industry Committee (“ERIC”) filed suit in the U.S. District Court for the District of Columbia challenging certain provisions of the 2024 Final Rule. In response, the Departments issued a statement that they would not enforce the 2024 Final Rule or pursue enforcement actions based on a failure to comply prior to a final decision in the litigation, plus an additional 18 months. However, on March 30, 2026, in a Joint Status Report filed in the litigation, the Departments stated that they will no longer defend the 2024 Final Rule and instead, will release a new Final Rule no later than December 31, 2026.
Although a new Final Rule will likely also have staggered effective dates and a period for plans to come into compliance, a new rule could create new and significant compliance hurdles for group health plans. Employers/plan sponsors should understand that MHPAEA’s statutory obligations, including audits of comparative analysis authorized by the CAA, 2021, remain in force. Only additional obligations under the 2024 Final Rule are essentially vacated pending the release of the new Final Rule.
MHPAEA report to congress
Next, on March 3, 2026, the Departments published their fourth annual report to Congress on MHPAEA enforcement, covering two years from August 1, 2023, through July 31, 2025. The DOL Employee Benefits Security Administration (“EBSA”), enforces MHPAEA for ERISA plans and the Centers for Medicare & Medicaid Services (“CMS”), a division of HHS, enforces MHPAEA for non-federal governmental plans. DOL’s enforcement activity during the reporting period included:
- 42 initial letters requesting comparative analyses for 77 NQTLs;
- 14 insufficiency letters covering 32 NQTLs;
- 25 initial determination letters findings plans/issuers had violated MHPAEA for 43 NQTLs; and
- 5 final determinations of noncompliance finding MHPAEA violations for 7 NQTLs.
During the reporting period, CMS’ enforcement activities included:
- 43 initial letters requesting comparative analyses for 43 NQTLs,
- 62 insufficiency letters covering 43 NQTLs,
- 9 initial determination letters finding that plans and issuers had violated MHPAEA’s requirements for 9 NQTLs, and
- 10 final determinations of noncompliance finding a plan or issuer violated MHPAEA’s requirements for 10 NQTLs.
The 2025 report provides some detail on the comparative analyses requested, final determinations, and types of issues identified. There was a notable focus on prior authorizations and utilization review, network access, and NQTL documentation. The report is much shorter than reports issued in prior years at only 32 pages. It also reflects a more targeted approach to enforcement and a willingness to resolve concerns through corrective action. Employers/plan sponsors should continue to work with insurers and third-party administrator partners on NQTL compliance and understand the level of support they will provide in the event of an audit.
Additional information and resources
- U.S. Department of Labor: 2025 MHPAEA Report to Congress
- Bloomberg Law: The ERISA Industry Committee v. U.S. Department of Health and Human Services
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