President Biden recently revealed his $5.8 trillion budget for the 2023 fiscal year, which includes $14.6 in discretionary spending for the U.S. Department of Labor (DOL) and mandatory funding. Much of this spending is devoted toward developing new policies to guarantee better health care coverage for mental health and substance abuse disorder treatment. The DOL also would have enhanced enforcement authority against those entities who unlawfully limited coverage for these conditions.

Federal laws requiring parity for mental health and substance abuse-related claims have existed for years. Group health insurance plans may not restrict those services any more stringently than medical and surgical services. The federal government has a limited ability to enforce parity law.

The federal government is only now starting to take more steps toward enforcing these laws. Currently, plans must submit complex analyses of claims processing methodologies to DOL to remain compliant.

Under Biden’s proposal, DOL would have the authority to impose fines on group health plans that will not provide evidence of compliance with federal parity laws. This authority would add more teeth to DOL’s current ability to enforce. None of the plans that DOL surveyed in 2021 could show compliance with federal parity laws, which is what led to the request for increased enforcement authority.

Congress also has shown interest in stronger enforcement of parity laws, as shown by funds that it made available to DOL in a 2021 appropriations bill. Congress would first need to propose policy legislation to implement the President’s current mental health care budgetary plans, including $275 million over ten years to enforce federal parity laws by DOL. This legislation would be separate from the annual spending bill.

Additional items of funding in the President’s plan include the following:

  • Grants to states to enforce mental health parity requirements
  • Funding for community health centers
  • Enhanced Medicaid reimbursement for mental health and substance use disorder programs for states
  • Increased funding for mental health care providers serving Medicaid beneficiaries

If President Biden’s goals proceed as planned, plans should prepare for new policies concerning mental health and substance abuse disorder treatment, as well as requirements to show proof of their compliance with federal parity laws. Otherwise, they could face increased civil penalties for noncompliance.