Washington paused its strengthened parity rule in 2025. But state regulators, a standing federal statute, and the courts are expanding enforcement anyway.
Key Takeaways
- The federal rule is paused, not repealed. In May 2025, the Departments of Labor, Health and Human Services, and Treasury announced they would not enforce the new provisions of the 2024 mental health parity final rule pending litigation, plus 18 months. The underlying statute, the 2013 regulations, and the 2021 requirement to produce comparative analyses all remain in force.
- States have moved into the vacuum. Georgia’s insurance commissioner issued roughly $25 million in parity fines across 2025 and 2026, California’s regulator reached a $200 million enforcement action against Kaiser Permanente, and Washington and Colorado wrote the 2024 federal standard into their own law. Enforcement is expanding through state insurance departments even as the federal posture retreats.
- The statutory floor keeps federal pressure alive. The Consolidated Appropriations Act still requires plans to document comparative analyses on request, the Labor Department devotes about a quarter of its enforcement program to parity, and corrections have benefited more than 7.6 million plan participants. None of that depends on the paused 2024 rule.
- Insurers are now fighting state enforcement directly. In November 2025, an insurer trade group sued California to invalidate state regulations that adopt the 2024 standard, a sign that the contest over parity has shifted from Washington to the states. Where it settles will determine what parity means in practice for the next several years.
The headline event in mental health parity over the past year was a retreat. On May 15, 2025, the three federal departments that enforce the Mental Health Parity and Addiction Equity Act announced they would not enforce the most significant set of parity regulations in more than a decade, the 2024 final rule issued under the Biden administration, until pending litigation is resolved and for 18 months after. To read the trade press in the weeks that followed was to encounter a single story: parity enforcement was over, or at least suspended indefinitely.
That story is incomplete. Beneath the federal pause, enforcement of parity has been quietly expanding, just not from the agencies that wrote the paused rule. State insurance commissioners are levying record fines. A federal statute that the pause does not touch still compels insurers to prove their compliance. And the litigation that froze the federal rule has, paradoxically, become a new front on which parity gets contested. The center of gravity has moved. The pressure has not lifted.
What the 2024 mental health parity rule did, and why federal enforcement is paused
To understand the pause, it helps to understand what was paused. MHPAEA, enacted in 2008, requires that group health plans and insurers cover mental health and substance use disorder benefits no more restrictively than medical and surgical benefits. That law was strengthened by the Consolidated Appropriations Act of 2021, which for the first time required plans to perform and document comparative analyses of their nonquantitative treatment limitations (NQTLs): the prior authorization rules, network design choices, and medical necessity standards that, in practice, are where most parity violations live.
The 2024 final rule, issued September 9, 2024 and effective November 22, 2024, put detailed content requirements behind that comparative-analysis mandate and added new obligations, including a duty to provide “meaningful benefits” and to address “material differences in access,” plus a requirement that a named plan fiduciary certify the analysis. Employers objected that the new standards were ambiguous and unworkable. In January 2025, the ERISA Industry Committee sued the departments in federal court in Washington. By May, the departments had asked the court to hold the case while they reconsidered the rule, and on May 15 they issued the non-enforcement statement.
Two points are essential and frequently lost. First, the relief applies only to the portions of the 2024 rule that are new relative to the 2013 regulations; everything that predates the 2024 rule still binds. Second, as the departments themselves stated, MHPAEA’s statutory obligations, including the 2021 comparative-analysis requirement, continue to have effect. The pause is a decision not to enforce a regulation, not a repeal of the law. Rescinding the rule would require a fresh notice-and-comment process the departments have not yet begun.
State parity enforcement is expanding as federal regulators retreat
The most visible enforcement of the past two years has come from the states, and from an unexpected direction. Georgia, under a Republican insurance commissioner, has mounted what advocates describe as one of the largest parity enforcement actions in the law’s history. Acting under the state’s 2022 Mental Health Parity Act, the Office of the Commissioner of Insurance ran market conduct examinations of 22 insurers, uncovered more than 6,000 violations, and in August 2025 announced it would fine those insurers more than $20 million. In January 2026, Commissioner John F. King formally issued nearly $25 million in penalties. “The time to get in compliance with the law was yesterday,” King said.
Georgia is not alone. California, whose 2021 parity law (Senate Bill 855) is treated as a national model, reached a $200 million enforcement action against Kaiser Permanente in 2023, the largest the state’s Department of Managed Health Care has ever brought against a health plan, combining a $50 million fine with $150 million in mandated investments. New York’s attorney general, together with the Labor Department, reached a 2021 settlement with United Behavioral Health over improper denials of behavioral health claims. Washington fined insurers including Premera, Regence, and Kaiser’s Washington plan across 2025 and 2026 for parity-related failures. And several states have responded to the federal pause not by retreating but by codifying the very rule Washington declined to enforce: Washington State’s HB 1432 wrote the 2024 federal standard into state law, and Colorado’s HB 25-1002 used it to strengthen state requirements, both with bipartisan support. Oregon publishes an annual parity report built on claims-denial data; West Virginia has requested insurer data on denials and prior authorization. Acuity has documented how parity pressure is already reshaping the substance use disorder market, pushing residential addiction providers toward in-network contracts regardless of the federal enforcement timeline.
The picture is not uniform. The Commonwealth Fund has noted that some states, including Arizona, paused their own efforts to adopt the 2024 standard while the federal litigation plays out, wary of moving without federal cover. But the dominant trend is that states, which remain the primary enforcers of parity for the plans under their jurisdiction, are using market conduct exams, data calls, and fines in ways the federal pause does nothing to constrain.
The federal statute and private litigation keep parity enforcement pressure alive
Even at the federal level, the retreat is narrower than it appears. The 2021 comparative-analysis requirement is statutory, and the departments have been explicit that it survives the pause. The Labor Department’s Employee Benefits Security Administration (EBSA), which oversees parity for roughly 2.6 million private employer plans, reported in its most recent annual report to Congress that it devotes nearly a quarter of its entire enforcement program to parity NQTL work, and that its efforts under the 2021 law have cumulatively produced corrections benefiting more than 7.6 million participants across more than 72,000 plans. The statute also obligates the Labor and Health and Human Services departments each to conduct a minimum number of parity investigations every year, a floor the non-enforcement statement does not remove. The fourth report to Congress, covering enforcement activity through mid-2025, was transmitted even after the pause was announced. Federal enforcement has also continued case by case: in February 2026, the Labor Department reached a settlement with Kaiser Foundation Health Plan requiring it to pay at least $28.3 million to California members for out-of-network mental health and substance use costs, plus a penalty approaching $3 million, over inadequate provider networks and improper barriers to care.
Private litigation is the other engine. MHPAEA is enforceable by plan participants under ERISA, and the comparative-analysis documents that the 2021 law forces insurers to maintain have become powerful evidence in those suits, independent of whether federal regulators choose to act. The litigation that triggered the federal pause has itself become a venue for the parity fight: in November 2025, an insurer trade association sued California seeking to invalidate state regulations that incorporate the 2024 standard, an attempt to extend the federal retreat into the states that have refused to follow it. The substance of most parity disputes is mundane and financial: network adequacy, reimbursement rates, and prior authorization. Acuity’s coverage of the behavioral health reimbursement gap and of the long road to value in behavioral health traces how those questions sit at the center of the broader struggle over how behavioral health gets paid for, a struggle the parity fight is one expression of.
What the quiet expansion of parity enforcement means
The result is a parity landscape that looks weaker from Washington than it is on the ground. The federal government’s most ambitious parity regulation is on hold, and may be rewritten or rescinded. But the law it implemented is intact, the statutory comparative-analysis mandate still binds, the Labor Department is still investigating, plan participants are still suing, and a growing roster of states is enforcing parity through fines and market conduct exams while some write the paused federal rule into their own statutes. Enforcement has not contracted so much as decentralized.
For operators, investors, and plan sponsors, the practical implication is that compliance is not optional just because federal enforcement of the newest rule is suspended. A residential provider negotiating in-network contracts, a health plan designing prior authorization, a Medicaid managed care organization setting behavioral health rates under a tightening eligibility regime: each still answers to a state insurance department, a standing federal statute, and a plaintiffs’ bar, none of which is waiting for Washington. Acuity will continue tracking parity enforcement across federal and state lines. The quiet expansion is the story the federal pause obscured, and it is the one more likely to shape access to behavioral health care in 2026.
