The Labor Department is narrowing its enforcement focus on health plans’ compliance with federal mental health parity requirements, prioritizing three areas it considers highest-risk for participants while easing enforcement of newer requirements tied to ongoing litigation.
The department’s Employee Benefits Security Administration issued updated enforcement guidance Sept. 8, 2026 identifying potential compliance red flags, monitoring practices and corrective actions involving mental health and substance use disorder benefits. The guidance accompanies Field Assistance Bulletin 2026-03, which prioritizes enforcement of nonquantitative treatment limitation requirements under the Mental Health Parity and Addiction Equity Act in three areas: treatment limitations and exclusions, medical necessity standards and review processes, and network adequacy standards.
The Mental Health Parity and Addiction Equity Act of 2008 bars insurers and employer health plans from imposing greater limits on behavioral health services than they do on other medical care. The Biden administration finalized a rule in September 2024 meant to strengthen enforcement of that law, tightening requirements around prior authorization and requiring plans to study whether mental healthcare was harder for members to access than medical care.
In January 2025, the ERISA Industry Committee, which represents large employers, sued to block the 2024 rule. The committee argued it exceeded federal regulators’ authority and gave insurers and plan sponsors too little time to comply. By May 2025, HHS told a federal court it would not enforce the rule while it reconsidered the regulations “more broadly.” Some insurers, including the Blue Cross Blue Shield Association, had also opposed the rule, warning it could increase care that was not clinically recommended.
HHS, the Treasury Department and the Labor Department told a federal court in March 2026 that they intend to pursue significant revisions to the 2024 rule instead of defending it in litigation. The agencies said they plan to include the rulemaking in the 2026 Spring Regulatory Agenda and to issue a notice of proposed rulemaking no later than Dec. 31, 2026. The American Psychiatric Association has criticized the move and said it intends to push officials toward a rule that strengthens, rather than weakens, enforcement.
On June 30, 2026, Rep. Tom Kean Jr., R-N.J., introduced the Mental Health Parity Enforcement and Funding Act, which would give the the Labor Department explicit authority to investigate and hold insurers and plan sponsors accountable for violating the 2008 parity law, as well as supplemental funding for the Employee Benefits Security Administration to carry out that enforcement, according to a news release from Mr. Kean’s office. Mr. Kean, who has previously sponsored state-level parity legislation in New Jersey, said the effort is personal, citing his own experience with depression in a return-to-the-House floor speech.
Here are seven things to know about the guidance:
1. Certain behavioral health treatment exclusions could draw scrutiny. The agency identified exclusions involving applied behavior analysis, speech therapy or occupational therapy for autism spectrum disorder as potential red flags when comparable exclusions do not apply to medical or surgical care. It also flagged exclusions involving medications for addiction treatment, nutritional counseling for eating disorders, and residential, intensive outpatient or partial hospitalization programs.
2. Prior authorization and medical necessity processes are a key enforcement area. Potential compliance problems include requiring prior authorization or concurrent review for all or almost all mental health and substance use disorder benefits when those requirements apply to few or no medical or surgical benefits in the same classification. Extra review requirements and certain treatment criteria can also raise concerns.
3. The agency is looking closely at behavioral health networks. More burdensome processes for behavioral health providers to join networks, longer wait-time standards and different provider reimbursement methodologies can signal potential parity problems. The agency also flagged situations in which plans offer procedures for patients unable to find an in-network medical provider but do not provide comparable assistance for behavioral healthcare.
4. Compliance depends on how policies operate in practice. Written plan terms are not the only focus. The agency identified longer prior authorization timelines, manual behavioral health authorization processes when medical authorizations are automated, and shorter authorization periods for behavioral health services as potential red flags.
5. Telehealth, cost-sharing and visit limits can also raise compliance concerns. The guidance identifies lack of telehealth coverage for behavioral healthcare when telehealth is covered for medical care, higher copays or coinsurance for mental health and substance use disorder services, and visit or episodic limits that do not apply to medical or surgical services as potential red flags.
6. Plans are expected to use monitoring mechanisms to identify disparities. The agency recommends comparing mental health and substance use disorder benefits with medical and surgical benefits using measures including out-of-network utilization, provider network applications and patient wait times. Plans should also monitor participant complaints and take action when data indicate disparities or other compliance concerns.
7. Corrective actions can require changes to coverage and plan operations. The guidance points to actions taken during previous department investigations, including expanding behavioral health telehealth and network recruitment, reducing behavioral health services subject to preauthorization, extending automated preauthorization systems to behavioral health services, and removing certain exclusions. These examples show how identified parity concerns can translate into changes in benefit design and administrative processes.
View the full PDF here.
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