Plan Sponsors Face Challenges to Providing Mental Health Parity

It’s been nearly two decades since the passage of the federal Mental Health Parity and Addiction Equity Act, mandating that health plans that offer mental health and substance use disorder benefits cover them on par with medical and surgical care.

“We have seen a lot of housekeeping over the year by plans to clarify their terms and make clear their message that they, the plan, do not have any intent to be restricting access in their provision of mental health [benefits],” says Elena Lynett, a senior vice president in Segal’s national health compliance practice group. “That really leaves us now with the muddier question of what the regulators want to see.”

While demand for behavioral health care has grown, access to both providers and services continues to lag. Meanwhile, regulators have revisited the rules for compliance repeatedly since the law’s 2008 enactment. The most recent major regulations, finalized in 2024, focused on nonquantitative treatment limitations—NQTLs.

Regulatory and Compliance Burdens

Health plan sponsors often underestimate the administrative burden of mental health parity compliance, says Rebecca Sooter, an attorney and vice president at Aon Health Solutions.

“They think it’s just checking off a box, but it’s not quite that simple because it’s not comparing apples to apples,” she says. “It’s really comparing apples to oranges and making sure there’s parity in spaces that can be quite different.”

Under the MHPAEA, plan sponsors face strict federal rules requiring them to prove meaningful compliance with the law, including detailed comparative analyses of NQTLs such as prior authorization requirements and formulary design for prescription drugs.

“It basically made it so that if you want to change something on the medical or surgical side, before you even make that change—even if it’s an improvement—you have to think about how that might impact the comparative analysis on the mental health side,” Hohimier says. “So, there are a lot of questions about the levers a plan will try to pull to improve benefits and coverages for their population because the two are tied together.”

On top of those considerations, ongoing litigation and frequent updates to federal guidance mean plan sponsors often need to re-evaluate and adjust their plan designs. In practice, they often outsource to benefits providers or third-party consultants the administrative work required to prove parity.

Access Barriers

Along with prior authorization and medical necessity criteria, network adequacy has emerged as an NQTL area of focus for the Department of Labor, says Saghi Fattahian, a partner in law firm Morgan, Lewis & Bockius who leads the firm’s health and welfare practice. But a severe lack of in-network mental health providers makes true network parity difficult to achieve in practice.

“We have big problems with provider deserts,” Sooter says. “We’re just not seeing the access that we would like to see.”

One likely factor: reimbursement. Mental health care and substance abuse disorder treatment are paid for at rates ranging from 16% to 59% lower than those of physical healthcare, according to the American Medical Association’s Mental Health Parity Index. As a result, many providers have opted out of insurance networks, instead collecting direct, private payment from patients.

“How much they’ll get paid is a major motivator for whether or not a provider decides to enroll and participate in your plan,” says Benjamin Miller, a psychologist and mental health equity advocate. “There are also administrative burdens that often come with certain plans that make them more attractive than others. You want to make the burden of entry as easy as possible for providers looking to get into your network.”

Point-Solution Logistics

Many plan sponsors have turned to point solutions—specialized products from specialized vendors to fill in specific gaps in mental health coverage. The solutions might include  mental health programs conducted remotely and condition-specific supports, including app-based tools, and the DOL has encouraged plans to expand access through telehealth.

Participants like point solutions because they’re often more convenient to access, and employers like them because they can help address some of the network inadequacy challenges. But juggling multiple point solutions also creates additional administrative and data work for employers.

“Plan sponsors should work with their consultants to identify what engagement is and collect feedback from participants on these tools to see if they need to be refined or if they’re even worth offering,” Fattahian says. “But anything that gives access to professional mental health care is worth considering.”

Engagement Challenges

While employers generally recognize the need to strengthen the mental health benefits they offer their employees, many also have concerns about getting those employees to engage with existing benefits, according to the Employee Benefits Research Institute. Among employers surveyed by EBRI in 2025, 47% reported a lack of awareness of available mental health benefits among their employees, 43% noted a stigma related to seeking mental health services, and 40% cited confidentiality concerns as suppressing uptake.

While stigma related to using mental health benefits has diminished somewhat, it is still a factor for some employees. A larger driver of low engagement, Miller says, is cost.

“It’s really hard to encourage someone to seek care when that care is going to cost them out-of-pocket X number of dollars that they can’t afford, or their benefits only cover a certain percentage of it,” he adds.

Gaps in Measurement

Data silos and privacy constraints make it difficult for plan sponsors to measure the effectiveness of the mental health benefits they do offer. Fewer than half of employers that offer mental health coverage are measuring whether such benefits are delivering timely, effective care, according to an analysis from Path Forward based on the EBRI data.

Sources suggested that plan sponsors with multiple behavioral health point solutions might consider polling employees to determine whether they are aware of and use these tools.

“You have to ask: Is the additional access being used?” says Kaye Pestaina, who directs the Program on Patient and Consumer Protections at health policy research organization KFF. “Are you getting the bang for your buck? The con [when using multiple providers] is that it’s just harder to track.”