Non-federal governmental employers with self-funded health plans have long been able to opt-out of several requirements, one of which has been compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA).  However, Congress recently eliminated the MHPAEA opt-out in the Consolidated Appropriations Act of 2023 (CAA-23).

The Department of Health and Human Services (HHS) published guidance on June 7, 2023, to explain when the opt-out sunsets and how that affects self-funded non-federal governmental plans.  MHPAEA opt-outs were no longer allowed to be elected on/after December 29, 2022, and “generally no such election with respect to MHPAEA expiring on or after June 27, 2023” may be renewed.

There are exceptions for collective bargaining agreements of varying lengths to allow continuation of the MHPAEA opt-out “until the date on which the term of the last CBA expires.”

Self-funded non-federal governmental plans should be prepared to comply with all aspects of MHPAEA.  Calendar year plans generally would have submitted their MHPAEA opt-out election before the December 29, 2022, cutoff, which means this calendar year would be the final year their opt-out is valid.

Please let your IMA Benefits team know if you have any questions.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.