Biden Administration Finalizes Mental Health Parity Rule

The Biden administration on Sept. 9 finalized a rule placing new requirements on health plans to cover mental health and addiction care on the same terms as other types of care.

The rule was originally proposed last year and expands on the Mental Health Parity and Addiction Equity Act (MHPAEA), a 2008 law meant to keep mental health benefits covered at the same level as physical health benefits. A press release from the departments of Labor, Health and Human Services, and the Treasury about the final rule stated that enforcement efforts for the MHPAEA have shown that “many still encounter barriers to accessing mental health and substance use disorder care as compared to medical and surgical care under their health plan or coverage.”

If health plans are found to be providing inadequate access to mental health or substance use disorder care, they will be required by the new guidelines to come into compliance with the requirements by analyzing their provider networks, prior authorization policies, and out-of-network payment rates. That could mean “adding more mental health and substance use professionals to their networks or reducing red tape for providers to deliver care,” states a White House press release.

According to the departments, the new rules provide additional protections against more restrictive, nonquantitative treatment limitations for mental health and substance use disorder benefits as compared to medical or surgical benefits. Nonquantitative treatment limitations are requirements that limit the scope or duration of benefits, such as prior authorization requirements, step therapy, and standards for provider admission into health plan networks.

The rules will take effect in January 2025, though some requirements won’t be implemented until 2026.

“Mental health care is health care,” President Joe 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.”

The rule comes as mental health issues, as well as substance use disorders, have soared over the past couple of years.

According to figures from the National Alliance on Mental Illness, 23% of U.S. adults experienced mental illness in 2021. And suicide rates increased approximately 36% between 2000 and 2022, according to the Centers for Disease Control and Prevention. Mental health services provider ComPsych reported earlier this year that mental-health-related leaves of absence are surging in the workplace, up 33% in 2023 over 2022 and up a whopping 300% from 2017 to 2023. A leave of absence, ComPsych said, can vary from a few days to weeks.

In response, many employers have amped up their mental health benefits for employees in recent years. Still, many people with mental health conditions or substance use disorders do not get treatment.

Industry Response

Although the new mental health parity rules are aimed at improving and strengthening access to mental health care for the 150 million U.S. residents with private health insurance, some industry groups have criticized the regulations, saying they might do the opposite. That’s because, opponents argue, expanded requirements—and the associated costs—may cause employers to reduce mental health coverage.

After the rule was proposed, the ERISA Industry Committee, an employer group, last fall said those regulations would “be overly burdensome to employer-sponsored health benefit plans; [be] confusing, costly, and impossible to comply with; and subject millions of employees and their families to higher health care costs and changes to their benefit designs.”

Health insurance trade association AHIP said the proposed changes risked the “unintended consequence of hindering the availability, affordability, or safety of mental health care and substance use disorder treatment.”

SHRM for its part “strongly agrees mental health care is essential in the workforce and that employee family members need support through health plans,” said Emily M. Dickens, SHRM chief of staff, head of government affairs, and corporate secretary. “That said, it’s important the complex nature of these new rules do not create excessive costs and burdens on group health plans. As these final rules move into the implementation stage, SHRM will continue to work with the plan provider community and the administration on meeting these twin challenges.”