The Keenan Blog

Blog

Mental Health Parity Enforcement Is Intensifying: What Employers Need to Document Now

Mental health benefits have been a compliance focus for years, but enforcement efforts are entering a new phase. Regulators are increasingly scrutinizing how health plans administer mental health and substance use disorder benefits, with a particular emphasis on whether those benefits are being provided on par with medical and surgical benefits.

For employers sponsoring group health plans, compliance is no longer just about offering coverage. It is also about being able to demonstrate, through documentation and analysis, that mental health benefits are being administered in accordance with applicable parity requirements.

As enforcement activity continues to evolve, employers should understand what documentation may be requested and how to prepare.

Understanding mental health parity

The Mental Health Parity and Addiction Equity Act (MHPAEA) generally requires group health plans that offer mental health and substance use disorder benefits to provide those benefits in a manner comparable to medical and surgical benefits.

While parity initially focused on financial requirements and treatment limitations, regulatory attention has increasingly shifted toward non-quantitative treatment limitations (NQTLs). These include plan management practices such as prior authorization requirements, provider credentialing standards, network admission criteria, reimbursement methodologies, and utilization management processes.

Regulators have made it clear that plans must be prepared to demonstrate how these practices are designed and applied.

Documentation is taking center stage

One of the most significant developments in recent years has been the expectation that plan sponsors maintain detailed comparative analyses of NQTLs.

Employers may need to demonstrate:

• How mental health and medical benefits are evaluated

• Whether similar standards are applied across benefit categories

• How decisions regarding coverage and access are made

• The factors used to develop utilization management practices

• Data supporting the administration of plan provisions

Simply assuming parity exists may not be enough. Increasingly, regulators expect plans to document how they reached that conclusion.

Why enforcement is increasing

Mental health remains a growing area of focus for lawmakers, regulators, healthcare providers, and employees.

At both the federal and state levels, policymakers continue to explore ways to improve access to behavioral health services and ensure individuals receive equitable treatment under health plans.

California has also seen increased legislative activity in this area. As discussed in Key California Health & Welfare Bills to Watch in 2026: Part 2, proposed legislation continues to focus on mental health parity requirements and enhanced oversight of plan administration practices. These developments reinforce the importance of understanding how health plans are designed, administered, and documented.

Documentation is taking center stage

One of the most significant developments in recent years has been the expectation that plan sponsors maintain detailed comparative analyses of non-quantitative treatment limitations (NQTLs).

Employers may need to demonstrate:

• How mental health and medical benefits are evaluated

• Whether similar standards are applied across benefit categories

• How coverage decisions are made

• The factors used to develop utilization management practices

• Data supporting plan administration decisions

Simply assuming parity exists may not be enough. Increasingly, regulators expect plans to document how they reached that conclusion.

This heightened scrutiny mirrors broader trends across employee benefits compliance. Topics such as fiduciary oversight, documentation, and governance have received increasing attention, including in Keenan's webinar, which explores how health plan fiduciaries can demonstrate compliance and procedural prudence in an evolving regulatory environment.

The importance of ongoing review

Mental health parity compliance is not a one-time exercise. Benefit plans evolve, vendor relationships change, and regulatory expectations continue to develop. Processes that may have been compliant a few years ago may warrant renewed review as guidance, enforcement priorities, and plan administration practices change.

Regular evaluations can help employers identify potential compliance gaps, confirm that vendor partners are providing necessary documentation, and ensure that parity analyses remain current and defensible. Ongoing reviews may also help organizations address issues proactively before they become the focus of a regulatory inquiry.

Organizations that periodically assess plan operations, documentation practices, and compliance procedures are often better positioned to respond to requests for information and demonstrate a thoughtful approach to mental health parity compliance.

Preparing for what's next

Mental health parity enforcement is likely to remain a priority for regulators. Employers that take a proactive approach to documentation, vendor oversight, and compliance reviews may be better positioned to respond if questions arise.

While the specific requirements will vary based on plan design and administration, one theme is clear: regulators increasingly want evidence, not assumptions.

By understanding documentation expectations today, employers can help strengthen their compliance posture while continuing to support employee access to mental health and substance use disorder benefits.