Mental Health Parity Rule Put on Hold as HHS Signals Revisions

A Biden-era rule on mental health parity is now in legal limbo as the U.S. Department of Health and Human Services (HHS) reconsiders the regulation and signals potential revisions. On May 9, the Department of Justice filed a motion to place ERIC v. HHS — a lawsuit challenging the rule — into abeyance, pausing litigation while HHS reviews its next steps.

The case, filed in early 2024 by the ERISA Industry Committee (ERIC), targets a joint rule issued by HHS, the Department of Labor (DOL), and the IRS. The rule, originally proposed in August 2023 and finalized in September 2024, aimed to amend regulations under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). It sought to improve access to mental health and substance use disorder benefits by clarifying how parity is measured and enforced across plans.

In its comment on the proposed rule, SHRM urged the agencies to strike a balance that would encourage mental health benefit offerings without creating undue compliance burdens for employers. While the final rule largely reflected the proposed version, it has now become a focal point for litigation and policy reconsideration.

In the May 9 motion, HHS informed the court and other parties that it does not intend to enforce the contested portions of the rule and is considering a new notice of proposed rulemaking to rescind or revise it. The case will pause during this review period.

Several other cases concerning Biden-era rules have been placed in abeyance as agencies reassess their regulatory positions. These regulations include the 2024 overtime rule, which the DOL is re-evaluating after leadership changes; the worker classification rule challenged in Frisard’s Transportation v. DOL, where the DOL signaled possible rescission; and the Federal Trade Commission’s noncompete rule, challenged in Ryan v. FTC matter, is under additional review whereas the FTC’s Chairman Andrew Ferguson publicly questioned whether continued defense of the rule serves the public interest. Updates in these cases are expected over the coming months.