Summary: Under a final rule released by the Biden administration on Sept. 9, 2024, health insurers will be required to cover mental health care and addiction services on par with other medical conditions. This rule is part of a broader effort to improve access to mental health and substance use disorder treatment for more than 150 million people with private health insurance. The Departments of Labor, Health and Human Services, and the Treasury issued the final rule with the stated goal to enhance protections and better ensure equitable access to mental health care benefits and reduce barriers to care.

The final rules specify that health plans and insurers must assess how their nonquantitative treatment limitations affect access to mental health and substance use disorder services compared to medical and surgical benefits. The rules also provide additional guidance on documentation requirements introduced by the Consolidated Appropriations Act of 2021, aimed at improving compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA). Specifically, the final rule will:

• Require Health Plans To Make Changes When They Are Providing Inadequate Access To Mental Health And Substance Use Care. In 2020, Congress made changes to MHPAEA that require health plans to conduct meaningful comparative analyses to make sure that they are not making it harder for individuals to access mental health and substance use benefits than it is to access medical benefits.  Today’s new requirements make it clear that 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. The outcomes of these evaluations will show plans where they are failing to meet the law’s requirements, and where they will need to make changes to come into compliance, like adding more mental health and substance use professionals to their networks or reducing red tape for providers to deliver care.
• Make It Clear What Health Plans Can And Cannot Do. Health plans cannot 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 than their medical benefits. Health plans also have to use similar factors in setting out-of-network payment rates for mental health and substance use disorder providers as they do for medical providers.
• Close Existing Loopholes. When MHPAEA was first enacted, it did not require non-federal governmental health plans, like those offered to state and local government employees, to comply with its requirements. Today’s final rule closes that loophole, and now requires more than 200 additional health plans to comply with MHPAEA, providing critical protections to 120,000 consumers.

Agency: Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor; Centers for Medicare & Medicaid Services, Department of Health and Human Services. 

Action: Final rules.

Dates: Most provisions of the final rules apply generally to group health plans and health insurance issuers that offer group health insurance coverage starting on the first day of the first plan year beginning on or after Jan. 1, 2025, but certain requirements that may take more time to implement apply on the first day of the first plan year beginning on or after Jan. 1, 2026. The new rules also apply to grandfathered and non-grandfathered individual health insurance coverage for policy years beginning on or after Jan. 1, 2026.

Read the final rules - PDF.

View a fact sheet on the new rules.

The Nelson Mullins team is experienced in healthcare regulatory matters. Please reach out to one of our authors Jacob Kohn or Ed White for any questions regarding this topic.