The Biden Administration’s proposed budget for fiscal year 2023 serves as a warning to all plan issuers and administrators that enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA) is a top priority for the federal government. The proposed budget reflects a substantial and sustained commitment to ramp up enforcement efforts, with specific funding for MHPAEA audit activity, including $275 million for the Department of Labor over a 10-year period and $125 million for state grants to support their MHPAEA enforcement efforts. The Biden Administration has also proposed that Congress: (1) grant the Department of Labor (DOL) the ability to pursue civil monetary penalties against entities that provide administrative services to group health plans and do not comply with the MHPAEA; and (2) amend ERISA to allow participants and beneficiaries to recover losses due to parity violations through private rights of action. Plan issuers and administrators should take heed of these developments to get ahead of enforcement efforts and review their procedures, documents, and activities to ensure they meet the government’s stringent requirements.
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