ERIC sues to block Biden’s mental health regulations, citing overreach.

Today, ERIC, the ERISA Industry Committee, filed a complaint against the Tri-Departments—the United States Departments of Labor, Health and Human Services, and Treasury—to nullify the Tri-Departments’ Final Rule that was issued under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Consolidated Appropriations Act of 2021 (CAA). The case was brought before the United States District Court for the DC. The Final Rule was released as the Biden administration came to a close in September of 2024. You may find the complaint, drafted by Gibson, Dunn & Crutcher LLP and including former Labor Secretary Eugene Scalia, here. They are representing ERIC in this case.

According to ERIC’s lawsuit, the Final Rule is allegedly unconstitutional in various ways. In addition to its arbitrary and capricious nature, it also breaches the Fifth Amendment’s Due Process Clause, the Administrative Procedure Act, and the Tri-Departments’ authority under the MHPAEA and CAA. Since there was little time for plans to comply with the new, nebulously written rules, ERIC further claims that the Final Rule’s effective date of January 1, 2025, is arbitrary and capricious.

“ERIC and its member companies broadly support the goals of the Mental Health Parity and Addiction Equity Act,” stated Tom Christina, Executive Director of the ERIC Legal Center. Companies that are members of the ERIC already voluntarily provide benefits for mental health and substance use disorders; thus, this lawsuit is not about the value of those benefits. To keep their employees well and engaged, our members will continue to provide comprehensive health coverage, including mental health services. However, the new rules put out by the Biden administration go beyond what the Tri-Departments can legally do according to the statutes that Congress passed, and they endanger businesses’ capacity to provide workers and their families with affordable, high-quality coverage for drug abuse and mental health issues.

In his remarks about the lawsuit, Mr. Scalia stated, “Furthering the provision of quality mental health care is a noble goal for all American companies and has for years been an essential priority of Congress, the Department of Labor, and the other departments. However, in drafting these new rules, the relevant departments failed to consider the needs of the mental health care system as a whole, as well as the limitations placed on their power by the Constitution and the laws they claimed to uphold.

For the past seventeen years, following the passage of the MHPAEA, ERIC has worked to promote practical solutions that guarantee workers’ access to treatment for substance use disorders and mental health issues. In their 2021 report, “Prioritizing Employee Mental Health: Solutions for Congress,” ERIC provided lawmakers with thorough solutions to the mental health crisis that affects over 50 million people. One of the main recommendations was to expand patients’ access to essential behavioral and mental health services.

The Tri-Departmental Final Rule will do more harm than good in failing to achieve those aims. Unforeseen repercussions of this regulation change were the subject of ERIC’s persistent attempts to inform regulators. What follows is a schedule of those endeavors.

On July 25, 2023, the US Departments of Labor, Health and Human Services, and Treasury published proposed amendments to the MHPAEA regulations.
The four organizations (ERIC, ABHW, AHIP, and BCBSA) quickly voiced their disapproval of the amendments in July 2023. This group of stakeholders maintained its commitment to learning and advocating for change all through the process.
For the purpose of formally submitting concerns regarding the proposed modifications and emphasizing their serious possible effects, ERIC did so in October 2023 during the open consultation period.
A digital and television advertising campaign outlining the possible negative effects of the planned modifications was launched by ERIC in April 2024.
Concerned about the proposed changes, ERIC wrote to the White House in May 2024 to express its worries and urge President Biden to think about the consequences.
September 2024 saw the tri-departments’ finalization of amendments to MHPAEA regulations, notwithstanding ERIC’s best efforts. This lawsuit is part of ERIC’s ongoing strategy to prevent the regulation from having unforeseen effects and return to the logical approach of ensuring individuals can receive help for their mental health and drug use disorders.