No Shoes, No Shirt, No Problems… But Nonenforcement Policy Doesn’t Make Mental Health Parity Compliance Optional

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by Alex Smith

The Departments of Labor, Treasury, and Health and Human Services (the “Departments”) recently announced a nonenforcement policy with respect to the 2024 Mental Health Parity and Addiction Equity Act (“MHPAEA”) regulations or otherwise pursue enforcement actions based on a failure to comply, at least temporarily. The Departments appear to have taken this approach to be consistent with a pending lawsuit challenging the 2024 regulations. The Departments indicated the nonenforcement policy will apply until 18 months after the litigation has concluded. The Departments also indicated they will be reexamining the MHPAEA enforcement program more broadly.

It is important for plan sponsors to understand that the nonenforcement policy is limited to new requirements imposed by the 2024 regulations. It does not apply to the 2013 regulations or the MHPAEA statutory requirements, including the nonquantitative treatment limitation comparative analysis report requirement added by the Consolidated Appropriations Act, 2021. Because of the limited scope of the nonenforcement policy, plan sponsors should still ensure that they have obtained a thorough comparative analysis report, and that the plan complies with the mental health parity requirements specified in the statute and the 2013 regulations, including the quantitative treatment limitation and financial requirements. In addition:

  • Complying with the nondiscrimination provisions of the MHPAEA is part of the fiduciary duties of the plan’s fiduciaries. The comparative analysis report may help plan fiduciaries identify any deficiencies that should be addressed, and help demonstrate that they have engaged in a prudent process.
  • A participant still might be able to request the report as part of an ERISA Section 104(b)(4) document request for which the penalty for failure to produce can be up to $110 per day. Even if the 2024 regulations are not enforced, a court may conclude that the comparative analysis is a document that a participant is entitled to, given that the preamble to the 2024 regulations indicated as such.