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On Friday, just days before President Trump was inaugurated, The ERISA Industry Committee, which represents 100 large employers, sued the Labor Department over Biden administration final rules aimed at ensuring mental health treatment is covered on par with other medical care, like cancer and heart disease.
President Biden’s administration issued the final rules last September, clarifying 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.
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The lawsuit, which is also filed against the Treasury and the Health and Human Services Departments, is seeking to invalidate the Final Rule issued by the three departments under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Consolidated Appropriations Act of 2021 (CAA).
The lawsuit, The ERISA Industry Committee v. United States Department of Health and Human Services, alleges that the final rule is unlawful because it exceeds the departments’ authority under the MHPAEA and the CAA, violates the due process clause in the Fifth Amendment, is “arbitrary and capricious” and violates the Administrative Procedure Act – and oversteps the 200 requiring employer health plans to cover mental health.
ERIC’s lawsuit also alleges that the January 1, 2025 effective date for many of the Final Rule’s provisions is "arbitrary and capricious" because it did not leave enough time for plans to come into compliance with the entirely new, vaguely worded regulations.
“ERIC and its member companies whole-heartedly endorse the goals of the Mental Health Parity and Addiction Equity Act,” said Tom Christina, Executive Director of the ERIC Legal Center. “To be clear, this suit is not about whether there is value in offering mental health and substance use disorder benefits ... Our members are committed to offering robust mental health benefits, on par with all of the health benefits they offer, to ensure a healthy and productive workforce. But the new regulations issued by the Biden Administration exceed the Tri-Departments’ statutory authority under the laws that Congress passed, and threaten the ability of employers to offer high quality, affordable coverage for the mental health and substance use disorder needs of employees and their families.”
Related: MHPAEA: Feds post final mental health parity regulations
Federal regulations based on the MHPAEA regulations require individual and small-group policies to provide behavioral health coverage that's comparable to the policies' other health benefits. However, the new final rule set guidelines for provisions such as preauthorization requirements and methods for determining health care provider pay that might affect how comparable behavioral health care and other types of care really are.
Since the MHPAEA’s enactment, ERIC has sought to advance workable solutions that ensure employees have access to mental health and substance use disorder care. However, the Final Rule not only fails to meet those goals, but will undermine them, according to ERIC. ERIC repeatedly engaged in efforts to educate regulators about unintended consequences stemming from this rule change.
The DOL, HHS and the Treasury announced proposed changes to MHPAEA regulations on July 25, 2023, then issued final rules last September.
Finally, it's important to note that President Trump, who just took office on Monday, has already put out an executive order that could end up freezing new regulations like the new mental health parity final rules.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
