Parity Enforcement Act of 2025
- Sponsor
- Rep. Norcross, Donald [D-NJ-1]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Feb 4, 2025
Bottom line
The bill significantly strengthens the enforcement of mental health and substance use disorder parity laws by introducing financial penalties and expanding the Department of Labor's direct enforcement authority.
What it actually does
This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to authorize the Secretary of Labor to impose civil monetary penalties on group health plan sponsors, service providers, administrators, and health insurance issuers for failing to meet mental health and substance use disorder parity requirements. It also explicitly clarifies the Secretary's authority to enforce these parity requirements directly.
Proponents argue
Proponents argue that existing mental health parity laws lack sufficient enforcement mechanisms, leading to widespread non-compliance. This bill provides a crucial deterrent through civil monetary penalties, ensuring that individuals receive equitable access to mental health and substance use disorder care, and holding all responsible entities accountable.
Opponents contend
Critics might contend that introducing civil monetary penalties could impose an undue regulatory burden and financial risk on plan sponsors, service providers, and health insurance issuers, potentially increasing administrative costs or discouraging employers from offering comprehensive health benefits.
The bill is very short and clear, allowing for quick comprehension of its direct impact.
Section 2(a)
Establishes Civil Monetary Penalties for Mental Health Parity Violations
This provision amends Section 502(c)(10) of ERISA to allow the Secretary of Labor to impose civil monetary penalties on any plan sponsor, service provider, administrator, or health insurance issuer of a group health plan for failing to meet the mental health and substance use disorder parity requirements under Section 712(a). This expands the scope of entities subject to penalties and explicitly includes parity violations alongside genetic information non-compliance.
Supporters argue
Supporters argue this provision closes a critical enforcement gap, providing a powerful deterrent against parity violations and ensuring that mental health and substance use disorder benefits are truly on par with medical/surgical benefits. It holds all relevant entities in the health plan ecosystem accountable.
Critics contend
Critics might argue that introducing civil monetary penalties adds an undue regulatory burden and financial risk to plan sponsors and administrators, potentially increasing administrative costs or discouraging employers from offering comprehensive health plans due to fear of penalties.
Tradeoffs
This provision balances the need for robust enforcement of mental health parity laws to protect beneficiaries against concerns about increased compliance costs and potential penalties for employers and health plans, aiming to achieve greater equity in health coverage.
Section 2(b)
Clarifies Secretary's Enforcement Authority for Mental Health Parity
This section amends ERISA Section 502(b)(3) to explicitly state that the general prohibition on enforcement by the Secretary of Labor does not apply to Section 712, which outlines mental health and substance use disorder parity requirements. This clarification ensures the Secretary has unambiguous authority to enforce these provisions, including the new civil monetary penalties established in Section 2(a).