Biden Administration Releases Final Rules on Mental Health Parity

The administration of President Joe Biden announced Monday a series of final rules to expand access and lower costs for mental health and substance use care.

The rules, issued by the departments of Health and Human Services; Labor; and Treasury, are aimed to strengthen the Mental Health Parity and Addiction Equity Act, enacted in 2008, which requires health insurance plans that cover mental health to do so at the same level as physical health.

In 2020, Congress made changes to the MHPAEA that require health plans to conduct meaningful comparative analyses to make sure they are not making it harder for individuals to access mental health and substance use benefits than to access medical benefits. The MHPAEA was also amended by the Consolidated Appropriations Act of 2021.

The final rules now make it clear that employers offering health plans need to evaluate their provider networks, how much they pay out-of-network providers and how often they require—and deny—prior authorizations, according to the administration’s announcement.

The outcomes of these evaluations may reveal where plans need to make changes to comply with the rule, such as “adding more mental health and substance use professionals to their network or reducing red tape for providers to deliver care,” the White House stated.

Under the rules, health plans also cannot use non-qualified treatment limitations that use more restrictive prior authorization, other medical management techniques or narrower networks to make it harder for people to access mental health and substance use disorder benefits. In addition, health plans are required to use similar factors in setting out-of-network payment rates for mental health and substance use disorder providers as they would for medical providers.

Lastly, the final rules close an existing loophole from when the MHPAEA was first enacted, as it originally did not require non-federal government health plans, like those offered to state and local government employees, to comply with its requirements. Now more than 200 additional health plans for public employees are required to comply with the MHPAEA, expanding protections to 120,000 consumers, according to the announcement.

“Mental health care is health care,” Biden said in a statement. “But for far too many Americans, critical care and treatments are out of reach. Today, my administration is taking action to address our nation’s mental health crisis by ensuring mental health coverage will be covered at the same level as other health care for Americans. There is no reason that breaking your arm should be treated differently than having a mental health condition. The steps my administration is taking today will dramatically expand access to mental health care in America.”

Immediate reaction to the final rules was mixed. Melissa Bartlett, senior vice president of health policy at the ERISA Industry Committee, said in a statement that although the final rule incorporates some feedback that was offered by stakeholders, the potential impact of these changes “remains a great concern.”

“While more review is needed, the rule goes far beyond Congress’s clear intent when it enacted the MHPAEA and the CAA and, at a minimum, adds complexity to the landscape for employers who choose to offer behavioral health benefits for their workers,” Bartlett stated. “As ERIC evaluates this rule and assesses the implications for its member companies, we will consider all possibilities to prevent further harm to employers offering behavioral health benefits, and the employees and families who count on them–up to and including litigation.”

ERIC in May wrote a letter to the White House calling the proposed changes to MHPAEA “burdensome” to employer plans and said the changes would cause plans to face “a morass of incomprehensible regulatory standards for compliance.”

ERIC argued that the result of enacting the rule would be increased costs for employers sponsoring health benefits and decreased access to high-quality providers and mental health care services done remotely. Even worse, the group warned that it could result in employers scaling back coverage or dropping mental health and substance use disorder coverage completely.

The departments of Health and Human Services, Labor and Treasury intend to continue to provide guidance and compliance assistance materials in the coming months to assist plans and issuers in complying with the MHPAEA, as well as inform participants, beneficiaries and enrollees regarding their rights under the rule.

The final rules generally apply to group health plans and group health insurance coverage on the first day of the first plan year beginning on or after January 1, 2025, according to the Employee Benefits Security Administration. However, plans and companies will be given until January 1, 2026, to comply with certain new standards.

Until the applicability date, plans and issuers are required to comply with the existing requirements, including the CAA amendments to the MHPAEA.

More information on the final rule can be found on EBSA’s website.