Mental Health Parity Enforcement: 7 Health Plan Red Flags Employers Should Review

The U.S. Department of Labor is putting renewed attention on how employer health plans provide access to mental health and substance use disorder benefits.

On September 8, 2026, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued new guidance outlining where it plans to focus enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA).

For employers that sponsor group health plans, the message is straightforward: now is a good time to understand how your plan handles mental health and substance use disorder benefits and ask your carrier, third-party administrator or benefits advisor the right questions.

The Department’s new enforcement guidance focuses on three areas:

• Separate treatment limitations and exclusions
• Medical necessity standards and review processes
• Network adequacy, including provider admission standards and reimbursement practices

The DOL also released a detailed list of potential warning signs employers and plan administrators can use when reviewing plan terms and how benefits actually operate. Review the Department of Labor’s new MHPAEA compliance warning signs.

Here are seven red flags employers should have on their radar.

1. Mental Health Services Are Excluded When Similar When Similar Medical Care Is Covered

One of the clearest warning signs is a plan that excludes specific treatments for mental health or substance use disorders while covering comparable treatment for medical or surgical conditions.

The DOL specifically identifies examples such as exclusions for certain autism treatments or medications used to treat substance use disorders when comparable medical treatments are covered.

That does not mean every difference between benefits automatically violates MHPAEA. But significant differences should prompt a closer review.

What employers should ask:
Does our plan exclude any mental health or substance use disorder treatments that would generally be covered in a comparable medical situation?

2. Prior Authorization Is More Restrictive for Mental Health Care

Prior authorization itself is not automatically prohibited.

The concern is whether the plan imposes it on mental health or substance use disorder treatment more restrictively than it does on comparable medical and surgical care.

For example, federal guidance has long identified a plan requiring prior authorization for all mental health services while not imposing a similar requirement on medical services as a potential parity problem. The Department of Labor explains how prior authorization and other nonquantitative treatment limitations are evaluated under MHPAEA.

What employers should ask:
Are prior authorization requirements, treatment reviews or other approval processes applied differently to behavioral health benefits than to medical benefits?

3. Medical Necessity Standards Are Harder to Meet

Plans often use medical necessity criteria to determine whether treatment will be covered.

The DOL’s new enforcement guidance specifically identifies medical necessity standards and review processes as one of its three priority areas.

The issue is not whether a health plan can evaluate medical necessity. It is whether the standards and processes used for mental health and substance use disorder care are comparable to those applied to medical and surgical benefits.

Potential concerns can include more frequent reviews, additional documentation requirements or stricter criteria applied only to behavioral health treatment.

What employers should ask:
How does our plan determine medical necessity for mental health care, and how does that process compare with medical and surgical care?

4. Employees Cannot Find In-Network Mental Health Providers

A plan may look compliant on paper and still create problems in practice if employees cannot actually access care.

That is why network adequacy is now one of EBSA’s stated enforcement priorities.

The DOL identifies several potential warning signs, including:

• Longer waits for mental health providers to join a network
• Fewer efforts to address gaps in behavioral health networks
• More difficult processes for obtaining an out-of-network exception
• Disproportionately high use of out-of-network mental health providers
• Higher numbers of employee complaints about finding available behavioral health providers

What employers should ask:
Can employees actually find available in-network mental health providers within a reasonable time?

5. Mental Health Providers Face Different Network Standards

Employers may not see what happens behind the scenes when a carrier or network administrator recruits and reimburses providers.

The DOL does.

Its September guidance specifically calls out network admission standards and provider reimbursement methodologies.

Potential warning signs include making behavioral health providers complete more burdensome credentialing processes, using different reimbursement methodologies or making it more difficult for those providers to join or remain in the network.

This is one reason employers should not assume network parity simply because the insurance carrier manages the network.

What employers should ask:
How does our carrier or network administrator evaluate, recruit and reimburse mental health providers compared with medical providers?

6. Employees Face More Obstacles When They Need an Out-of-Network Exception

Sometimes an employee cannot find an appropriate provider in the plan network.

Many plans have procedures that allow employees to request an exception, sometimes called a network gap exception, single-case agreement or out-of-network exception.

The DOL identifies disparities in those procedures as another potential problem. If an employee seeking mental health care has to meet more burdensome requirements than someone seeking comparable medical care, the plan may warrant further review.

What employers should ask:
If an employee cannot find an available mental health provider, is the process for getting an exception comparable to the process available for medical care?

7. No One Is Monitoring How the Plan Actually Works

Mental health parity cannot be evaluated only by looking at the benefits booklet.

The DOL encourages plans to review both written plan provisions and actual plan operations, including data and employee experiences that may reveal access problems. Its latest guidance recommends having a written monitoring process and documenting corrective action when disparities or red flags are identified.

That could include looking at:

• Employee complaints
• Out-of-network utilization
• Provider access issues
• Claims and appeal processes
• Network gaps
• Differences between written policies and what employees experience

What employers should ask:
Who is responsible for monitoring mental health parity issues, and what happens when a potential problem is identified?

What Is MHPAEA?

The Mental Health Parity and Addiction Equity Act generally requires covered health plans that offer mental health or substance use disorder benefits to provide those benefits on terms that are comparable to medical and surgical benefits.

That includes obvious financial requirements such as copays and deductibles, but it also covers less visible restrictions known as nonquantitative treatment limitations, or NQTLs.

NQTLs can include things like prior authorization, medical necessity standards, provider-network requirements and other processes that affect whether or how an employee can access care. The Department of Labor provides an overview of mental health parity requirements and resources for plans and participants.

What About the 2024 Mental Health Parity Final Rule?

This is where employers need to be careful.

Federal agencies issued an extensive new MHPAEA final rule in 2024. However, in May 2025, the Departments of Labor, Health and Human Services and Treasury announced that they would not enforce the portions of that rule that were new compared with the earlier regulations while litigation and reconsideration of the rule continue, plus an additional period after a final decision in the litigation.

That does not mean mental health parity requirements disappeared.

The agencies specifically stated that MHPAEA’s statutory requirements, including the comparative-analysis requirements added by the Consolidated Appropriations Act, 2021, remain in effect. Read the Departments’ current enforcement statement on the 2024 final rule.

The September 2026 guidance gives employers a clearer picture of how EBSA intends to approach those continuing obligations.

Is an Employer Responsible if a Carrier or TPA Administers the Health Plan?

Employers should not assume that using an insurance carrier, third-party administrator or other service provider means there is nothing for the plan sponsor to consider.

How responsibilities are divided will depend on the type of plan and the parties involved, and employers should work with their benefits advisors and legal counsel when necessary.

From a practical standpoint, however, employers should be able to ask their vendors how they are addressing mental health parity and whether they can provide the information and analyses needed to support the plan’s obligations.

For employers already managing benefits administration and employee enrollment, this is another reason to keep benefit-plan information and vendor responsibilities organized. Learn more about CTR’s Benefits Administration and Open Enrollment solutions.

What Should Employers Do Now?

Employers do not need to personally conduct every clinical or network analysis themselves.

They do need to know who is doing it and be comfortable asking questions.

Before your next plan year, consider asking your broker, carrier, TPA or benefits advisor:

1. How are mental health and substance use disorder benefits being evaluated for parity?
2. Are there exclusions or prior authorization requirements that differ from comparable medical benefits?
3. How is medical necessity determined?
4. How does the plan monitor access to in-network behavioral health providers?
5. What happens when an employee cannot find an available provider?
6. Are provider reimbursement and network admission practices reviewed for parity?
7. Can you provide the plan’s required NQTL comparative analysis or other supporting documentation?

The DOL’s new guidance does not mean every red flag is automatically a violation. The agency itself emphasizes that NQTL requirements can be complicated and that not every limitation on mental health or substance use disorder benefits is prohibited.

But if one of these issues exists in your plan, it is worth asking the next question.

The Bottom Line

Mental health parity is not just about whether a health plan says it covers behavioral health.

The real question is whether employees can access those benefits without facing more restrictive barriers than they face when seeking medical or surgical care.

With the Department of Labor now identifying mental health parity as a national enforcement priority and providing a clearer list of the practices it plans to scrutinize, employers have a useful opportunity to review their plans before a problem arises.

Start with your carrier, TPA, broker or benefits advisor. Ask how your plan handles the DOL’s three priority areas and whether any of the new federal warning signs are showing up in your plan.

CTR will continue monitoring federal benefits guidance and sharing the updates employers need to know.

This information is provided for general informational purposes only and is not intended as legal advice. Employers should consult qualified legal counsel regarding their specific compliance obligations.