Trump Weighs Axing Mental Health Rule With Lawsuit on Pause (1)

A D.C. federal court paused an employer group’s lawsuit over a Biden-era rule to strengthen mental health coverage as the Trump administration considers modifying or rescinding the policy.

The Monday stay comes after the Health and Human Services, Labor, and Treasury departments on May 9 asked the US District Court for the District of Columbia to suspend the ERISA Industry Committee’s lawsuit challenging the rule, which created a new test to ensure employer health plans don’t shortchange their employees on mental health services compared to traditional medical benefits.

Republicans and employer groups blasted the rule when it was finalized in September, labeling it unworkable and arguing it could lead to employers dropping mental health coverage altogether. The rule stemmed from the Consolidated Appropriations Act of 2021, which increased mental health coverage requirements under the Mental Health Parity and Addiction Equity Act of 2008.

The agencies said in a court filing that they intend to “reconsider” the rule, “including whether to issue a notice of proposed rulemaking rescinding or modifying the regulation.” The administration also said it plans to issue a partial “non-enforcement policy” in the meantime, and to “reexamine the Departments’ current MHPAEA enforcement program more broadly.”

“Because the Departments do not intend to enforce parts of the rule and have indicated that they intend to reconsider the regulation challenged in this litigation, the government respectfully submits that it would be appropriate to place this case in abeyance pending the completion of that reconsideration process,” the administration wrote.

The ERISA Industry Committee agreed to the pause but said it would “reserve our right to resume litigation at any time,” according to the filing.

ERIC said in a statement Monday that it was “pleased” with the developments.

“Today’s action by the Trump Administration recognizes the need for greater examination to ensure employers have the clarity and flexibility they need to offer robust behavioral health benefits for a healthy, productive workforce,” the group said.

ERIC is represented by Gibson, Dunn & Crutcher LLP.

The case is ERISA Industry Committee v. Department of Health and Human Services et al, D.D.C., No. 1:25-cv-00136, motion filed 5/9/25.