Challenges in Enforcing Mental Health Parity: EBSA’s Struggle to Ensure Compliance | Arnall Golden Gregory LLP

A recent audit conducted by the U.S. Department of Labor’s Office of Inspector General (“OIG”) has uncovered significant challenges encountered by the Employee Benefits Security Administration (“EBSA”) in ensuring compliance with mental health parity laws. The report, released on February 19, 2025, emphasizes that the EBSA lacks essential enforcement tools, which leads to extended investigations and diminished accountability for violations of the Mental Health Parity and Addiction Equity Act (“MHPAEA”).¹

EBSA has several responsibilities, including ensuring that large group health plans and health insurers provide coverage for mental health and substance use disorder (“SUD”) benefits on par with medical and surgical benefits. The OIG undertook this audit to assess EBSA’s efforts to enforce compliance with non-quantitative treatment limitation (“NQTL”) laws and requirements.²

The OIG conducted a comprehensive review of EBSA’s non-quantitative treatment limitation comparative analysis data and accompanying documentation spanning fiscal years 2018 to 2024.³ This assessment identified three principal challenges that impede EBSA’s capacity to enforce compliance with relevant regulations effectively.

1. Lack of Civil Monetary Penalties: Unlike the Department of Health and Human Services (“HHS”), EBSA does not have the authority to impose civil monetary penalties on health plan issuers that violate parity laws.⁴ This absence of financial consequences weakens enforcement efforts and reduces incentives for compliance.
2. Underutilization of Existing Enforcement Tools: EBSA has several enforcement mechanisms, including referring cases to the Department of the Treasury to levy excise taxes and pursuing litigation through the Department of Labor’s Solicitor’s Office.⁵ However, the audit found that EBSA has not consistently used these tools to address violations.⁶
3. Lengthy Compliance Reviews: The report found that EBSA’s NQTL comparative analysis reviews can take up to three years to complete, delaying corrective actions and leaving beneficiaries at risk.⁷

Impact on Mental Health Coverage

Enforcement challenges within employer-sponsored health plans create barriers for individuals seeking mental health and substance use disorder treatments. Common issues include improper exclusions of behavioral therapies, higher cost-sharing for mental health services, and inadequate provider networks, all of which impede access to essential care.

Effects on Treating Providers

The lack of enforcement also impacts mental health providers, who often struggle to obtain timely and fair reimbursement for covered services. They face administrative burdens such as repeated claim denials and lengthy appeals processes. The OIG report found that EBSA’s review process can take up to three years to complete, meaning insurers can continue imposing restrictive policies for extended periods before being required to make changes. For SUD providers, these delays can lead to financial instability. Furthermore, the report found that health plans and insurers often fail to provide adequate documentation to demonstrate compliance with parity laws. This places an enormous burden on SUD providers, who must repeatedly submit appeals, navigate complex prior authorization requirements, and spend countless hours on administrative work instead of patient care.

Recommendations From the OIG to Strengthen Enforcement

In response to the findings, the OIG has issued five key recommendations:

1. Pursue legislative changes granting EBSA the authority to impose civil monetary penalties.
2. Expand EBSA’s enforcement capabilities to hold all responsible parties accountable, including third-party administrators and insurance issuers.
3. Support the creation of new laws allowing individuals to obtain a second review of wrongly denied health insurance claims and recover losses resulting from MHPAEA violations.
4. Establish procedures to effectively use existing enforcement tools, such as referring non-compliant plans to the Treasury Department for excise tax penalties.
5. Provide greater guidance and support for health plans to help them meet parity requirements.

The Road Ahead

EBSA has generally agreed with the recommendations and is committed to pursuing legislative changes and improving its enforcement strategies. However, access to mental health care remains a critical issue for millions of Americans, making enforcement of parity laws essential for ensuring fair and equal coverage. The challenges outlined in the OIG report have real consequences for SUD treatment providers and their patients. Without more vigorous enforcement of mental health parity laws, providers will continue to struggle with unfair reimbursement practices, administrative hurdles, and inadequate network support. Although EBSA’s efforts have resulted in some corrective actions, such as reprocessing wrongfully denied claims and eliminating impermissible treatment exclusions, the report emphasizes the need for additional regulatory authority and resources.

[1] U.S. Dep’t of Labor, Off. of Inspector Gen., Report No. 09-25-001-12-001 (2025), https://www.oig.dol.gov/public/reports/oa/2025/09-25-001-12-001.pdf.

[2] Id. at 1.

[3] Id. at 2.

[4] Id. at 7-8.

[5] U.S. Dep’t of Labor, Off. of Inspector Gen., Report No. 09-25-001-12-001, at 11 (2025), https://www.oig.dol.gov/public/reports/oa/2025/09-25-001-12-001.pdf.

[6] Id.

[7] Id. at 6.