Final rule improves access to mental health parity and addiction treatment

A new federal rule is expected to expand mental healthcare access for 175 million Americans with private insurance by requiring most health plans to provide equal benefits for both mental and physical health.

Designed to make mental healthcare more accessible and affordable and assure fair compensation for mental health professionals, many of the rule’s provisions take effect Jan. 1, 2025.

Background

The Departments of Labor, Treasury, and Health and Human Services (HHS) issued this final rule building on the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA or Parity Act) on Sept. 9, 2024.

The Parity Act prevents most health insurers from offering reduced mental health and substance abuse disorder benefits compared to medical and surgical benefits in group and individual health plans. It also adds additional protections against more restrictive treatment limitations for mental health and substance abuse disorders.

New tools offered by HHS will help states enforce these protections for millions of Medicaid beneficiaries in private Medicaid plans.

Key impacts

This new rule strengthens protections to make mental health and substance use benefits as accessible as physical health benefits, aiming to reduce costs and remove obstacles to care. Key components of the rule include:

• Most of the rule’s provisions will be applicable to group health plans and health insurance issuers starting on or after Jan. 1, 2025, with certain requirements to be implemented on or after Jan. 1, 2026.
• Health plans will be required to evaluate and improve access to mental healthcare, including assessing their provider networks, out-of-network payment rates, and authorization requirements to ensure they meet compliance standards.
• Health plans can’t impose stricter requirements on mental healthcare than they do on medical care, using the same criteria for determining out-of-network payment rates.
• Loopholes that previously excluded certain government health plans will be closed, extending protections to an additional 120,000 consumers.

Additionally, the Parity Act define keys terms in parity compliance, enhances parity protections, promotes equity, ensures meaningful coverage and network adequacy, and enforces penalties for non-compliance.