Treasury, DOL and HHS release final rule on Mental Health Parity

Key Takeaways

On September 9, the U.S. Department of Treasury, Labor and Health and Human Services issued a final rule to further enforce provisions under the Mental Health Parity and Addiction Equity Act (MHPAEA), a sweeping mental health parity rule enacted in 2008. The rule establishes equitable treatment limits for mental health and substance use, in line with medical and surgical benefits.

About the rule

The final rule seeks to strengthen enforcement of the MHPAEA’s provisions, requiring that mental health and substance use disorder benefits be offered on terms comparable to those for physical health services. Specifically, the final rule will:

• Address gaps in mental health care access. Health plans must evaluate areas like provider networks, out-of-network payments, and prior authorization practices. Where these evaluations show shortcomings, plans will be required to expand access, such as by adding more mental health professionals or streamlining approvals for care.
• Ensure consistency across benefits. Health plans must apply the same standards to mental health and substance use care as they do for medical care, including the use of prior authorizations and out-of-network payment rates.
• Close coverage loopholes. Public employee health plans (which include county government plans), which were previously exempt from MHPAEA, will now need to comply with parity requirements, extending protections to more than 120,000 additional individuals.

In addition to the final rule, the U.S. Department of Health and Human Services is also releasing new tools for states to ensure Medicaid plans comply with MHPAEA’s protections, particularly for Medicaid beneficiaries enrolled in private managed care plans.

Read the Final Rule

Key wins for counties in the final rule  

In October 2023, NACo submitted comments on the proposed rule for the Mental Health Parity and Addiction Equity Act (MHPAEA), advocating for stronger enforcement of mental health and substance use disorder coverage. They emphasized the critical role counties play, particularly through self-funded health plans, and requested clarity on compliance while pushing for a tiered penalty system to minimize the impact on county governments. The final rule directly addresses these concerns, providing guidance on working with third-party administrators (TPAs) and taking a collaborative, rather than punitive, approach to compliance enforcement.

Additionally, the final rule outlines key benefits for counties, such as improved access to behavioral health care by addressing service disparities, and expanded workforce capabilities through fair compensation for mental health providers, which could help alleviate staffing shortages. These measures mark significant progress in supporting counties' efforts to improve behavioral health outcomes for their communities.

Read about the NACo Mental Health Commission’s work on mental health parity