Careers

Diversity, Equity & Inclusion

Experience

Innovation

Interactive Maps

Locations

About

Pages

Meet our team of innovators
Ask us how we do it

Professionals

Insights

Services

Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

Home | Thompson Hine LLP

Atlanta

Chicago

Cincinnati

Cleveland

Columbus

Dayton

Los Angeles

Minneapolis

New York

Silicon Valley

Washington, D.C.

<img style="max-width: 100%;height: auto" width="825" height="347" src="https://www.erisalitigation.com/wp-content/uploads/sites/1017/2024/07/Coverage-scaled-1-825x347.jpg" class="attachment-lxb_af_3_of_4-wide size-lxb_af_3_of_4-wide wp-post-image" alt="" loading="lazy" />
			On January 17, 2025, the ERISA Industry Committee (&ldquo;ERIC&rdquo;) filed a <a href="https://www.bloomberglaw.com/product/blaw/document/X7P19DKM21981I9AUSDODMQRH15/download?imagename=1">lawsuit</a>, The ERISA Industry Committee v. United States Department of Health and Human Services et al. challenging the final Mental Health Parity and Addiction Equity Act (&ldquo;MHPAEA&rdquo;) <a href="https://www.federalregister.gov/documents/2024/09/23/2024-20612/requirements-related-to-the-mental-health-parity-and-addiction-equity-act">rule</a> published by the Departments of Labor, Treasury, and Health and Human Services (the &ldquo;Departments&rdquo;) in September 2024 (the &ldquo;Final Rule&rdquo;).&nbsp; The complaint, filed in the United States District Court for the District of Columbia, asks the District Court to invalidate and prevent enforcement of the Final Rule, which ERIC argues was issued in violation of the federal Administrative Procedure Act (&ldquo;APA&rdquo;).&nbsp; &nbsp;
The ERISA Industry Committee case comes on the heels of the Supreme Court&rsquo;s landmark Loper Bright Enterprises v. Raimondo decision, which overruled the longstanding doctrine of &ldquo;Chevron deference&rdquo; requiring courts to defer to federal agencies&rsquo; reasonable interpretations of ambiguous statutory language.&nbsp; It is one of a number of recently filed cases that will test the degree to which courts give weight to agency interpretations in a post-Loper world.
<h2 class="wp-block-heading">MHPAEA Regulatory Background</h2>
MHPAEA, enacted in 2008, prevents group health plans and health insurance issuers providing mental health or substance use disorder (&ldquo;MH/SUD&rdquo;) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical (&ldquo;M/S&rdquo;) benefits.&nbsp; Under MHPAEA, financial requirements and treatment limitations (together &ldquo;quantitative limitations&rdquo;) imposed on MH/SUD benefits cannot be more restrictive than the predominant quantitative limitations applicable to M/S benefits, and plans cannot impose separate quantitative limitations on MH/SUD benefits that are not also applied to M/S benefits.&nbsp; Interim final rules finalized in 2013 additionally require nonquantitative treatment limitations (&ldquo;NQTLs&rdquo;) applied to MH/SUD benefits to be &ldquo;comparable to&rdquo; and applied no more stringently than those applied to M/S benefits in the same benefit classification.&nbsp;
In 2021, the Consolidated Appropriations Act, 2021 (&ldquo;CAA&rdquo;) imposed new obligations for plans and issuers to document and make available to the Departments upon request their comparative analyses of the design and application of NQTLs.&nbsp;
On July 25, 2023, the Departments released a proposed MHPAEA rule (the &ldquo;Proposed Rule&rdquo;).&nbsp; The Proposed Rule, among other things, proposed new requirements for comparative analyses and for determining NQTL compliance under MHPAEA.
<h2 class="wp-block-heading">The Final Rule &nbsp;&nbsp;</h2>
Following a comment period on the Proposed Rule, the Departments issued the Final Rule on September 9, 2024.&nbsp; &nbsp;&nbsp;
Effective January 1, 2025, the Final Rule:
<ul class="wp-block-list">
<li>Requires plans and issuers to provide a written list of all NQTLs to a named plan fiduciary.</li>
<li>Sets forth specific content requirements for written NQTL comparative analyses.</li>
<li>Requires comparative analyses to include a certification by a named plan fiduciary that the fiduciary has (a) engaged in a prudent process to select one or more qualified service providers to perform and document the written NQTL comparative analysis in accordance with applicable law and regulations, and (b) satisfied their duty to monitor those service providers as required under ERISA with respect to the performance and documentation of the comparative analysis.</li>
<li>Requires plans and issuers to account for revised definitions of MH/SUD and M/S conditions in assessing benefit qualifications.&nbsp;</li>
</ul>
Effective January 1, 2026, the Final Rule:
<ul class="wp-block-list">
<li>Requires plans and issuers offering benefits for a covered MH/SUD condition to provide &ldquo;meaningful benefits&rdquo; for that condition in every classification in which M/S benefits are provided and to provide coverage for a core treatment of that condition.</li>
<li>Prohibits plans and issuers from relying upon factors or evidentiary standards that are biased or not objective.</li>
<li>Requires plans and issuers to collect and evaluate outcomes data and, to the extent such analysis suggests that the NQTL contributes to a &ldquo;material difference in access&rdquo; to MH/SUD benefits, take reasonable action to address the difference to ensure operational compliance.&nbsp; Under the Final Rule, a material difference in outcomes data is considered a &ldquo;strong indicator&rdquo; of an MHPAEA violation.&nbsp;&nbsp;</li>
</ul>
<h2 class="wp-block-heading">The Complaint</h2>
The ERISA Industry Committee complaint was brought by ERIC, a nonprofit organization that advocates for its large employer members in their capacity as benefit plan sponsors.&nbsp; The complaint challenges key provisions of the Final Rule as impermissibly vague and/or unlawfully issued under the APA.&nbsp; The five counts of the complaint are summarized below.
<ul class="wp-block-list">
<li>Count I of the complaint alleges that the Departments exceeded their statutory authority in issuing the following allegedly unlawful provisions of the Final Rule:
<ul>
<li>Plaintiff alleges that the &ldquo;meaningful benefits&rdquo; standard<a> </a>mandates benefits in contradiction to MHPAEA&rsquo;s stipulation that it is not a benefits mandate.Plaintiff alleges that the &ldquo;material differences in access&rdquo; standard is unlawful because MHPAEA only requires parity in plan terms and in the application of those terms to MH/SUD and M/S benefits and does not impose a disparate impact standard for evaluating parity.&nbsp;</li>
</ul>
<ul class="wp-block-list">
<li>Plaintiff alleges that the fiduciary certification requirement is unlawful because Congress did not authorize or mandate such a certification in its prior MHPAEA amendments.</li>
</ul>
</li>
</ul>
<ul class="wp-block-list">
<li>Count II alleges that numerous parts of the Final Rule (the &ldquo;meaningful benefits&rdquo; and &ldquo;material differences in access&rdquo; standards, the comparative analysis and fiduciary certification requirement, and the January 1, 2025 applicability date) are &ldquo;arbitrary and capricious,&rdquo; citing the Departments&rsquo; alleged reliance on vague terms, incorrect assumptions, and imposition of unreasonable and unnecessary burdens on plans and fiduciaries.</li>
</ul>
<ul class="wp-block-list">
<li>Count III alleges that the Departments failed to comply with the APA&rsquo;s notice-and-comment rulemaking requirements in issuing various parts of the Final Rule.
<ul>
<li>Plaintiffs allege that incorporating private third-party clinical standards into the &ldquo;meaningful benefits&rdquo; standard deprived parties of the opportunity to comment on the standard, given that the third-parties can alter their standards over time.</li>
</ul>
<ul class="wp-block-list">
<li>Plaintiffs also allege that the fiduciary certification requirement is not a &ldquo;logical outgrowth&rdquo; of the Proposed Rule, which would have required fiduciaries to certify that the NQTL comparative analysis complies with the requirements for such analysis, and thus provided no meaningful opportunity for parties to comment on the final certification requirement.</li>
</ul>
</li>
</ul>
<ul class="wp-block-list">
<li>Counts IV and V invoke the APA&rsquo;s requirement that courts invalidate unconstitutional agency actions.&nbsp;
<ul>
<li>Count IV alleges that ambiguities within the &ldquo;material differences in access&rdquo; standard, comparative analysis requirement, and fiduciary certification requirement fail to give fiduciaries &ldquo;fair notice&rdquo; of the specifics of each requirement or compliance obligation and thus violate fiduciaries&rsquo; due process rights.</li>
</ul>
<ul class="wp-block-list">
<li>Count V alleges that defining the Final Rule&rsquo;s &ldquo;meaningful benefits&rdquo; standard by reference to private third-party clinical standards unconstitutionally vests those parties with legislative and executive power.</li>
</ul>
</li>
</ul>
As noted above, the complaint asks the District Court to invalidate the challenged provisions of the Final Rule, set aside and vacate the Final Rule (or if not the entire rule, the challenged provisions), and issue an injunction prohibiting Defendants from enforcing the Final Rule (or alternatively, the challenged provisions) against ERIC or its employer members.
The Departments have 60 days (until March 18th) to respond to the complaint.&nbsp;
<h2 class="wp-block-heading">Thompson Hine&rsquo;s Takeaways</h2>
While the Final Rule currently remains in effect, its future remains unclear.&nbsp; Since the erosion of Chevron deference, the legal world has braced for a flood of challenges to federal agency actions exactly like the ERISA Industry Committee case.&nbsp; Now that courts can give less weight to agency interpretations of federal statutes, plaintiffs like ERIC have a much stronger legal basis for challenging agency-issued rules like the Final Rule. Indeed, courts across the country have already begun citing Loper as a basis for limiting or preventing enforcement of other federal rules and regulations.&nbsp;
A key concern noted throughout the ERISA Industry Committee complaint is that the increasingly onerous MHPAEA burdens imposed by the regulatory agencies may lead employers to cease providing coverage for MH/SUD services, a result that would directly undermine the goals of MHPAEA.&nbsp; Whether and to what extent that underlying concern resonates with the District Court or the new Trump administration (which may separately repeal or limit the Final Rule) is yet to be seen.
However, unless and until the Final Rule is invalidated, enjoined, or otherwise changed, plans and issuers imposing NQTLs remain responsible for complying with the rule&rsquo;s requirements.&nbsp;
If you have questions about the case, compliance with the Final Rule, or MHPAEA compliance generally, please contact the authors or your regular Thompson Hine attorney. A recording of Thompson Hine&rsquo;s October 23, 2024 webinar on the Final Rule, &ldquo;Practical Responses to the Final Mental Health Parity Regulations&rdquo; can be found <a href="https://www.thompsonhine.com/insights/practical-responses-to-the-final-mental-health-parity-regulations/">here</a>.

core/freeform

ERISA Litigation & Compliance

Senior Managing Associate

Meredith F. Reeves

Employee Benefits & Executive Compensation

ERISA Litigation

Business Litigation

New Lawsuit Challenges Final MHPAEA Rule and Tests Limits of Federal Agency Authority