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February 8, 2023

Opt-out right for self-insured non-federal governmental plans under the Parity Rules eliminated

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On December 29, 2022, President Biden signed the Consolidated Appropriations Act, 2023 (“CAA 2023”) into law. The CAA 2023 eliminated the ability of large state and local governmental employers sponsoring self-insured medical plans to opt out of compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA or “parity rules”). This means all of their plans will ultimately have to comply with the parity rules, if they were not already.

This Alert provides a high-level summary of the parity rules, the prior opt-out right available to self-insured non-federal governmental medical plans, the elimination of this option by the CAA 2023, and the impact on large state and local government employers.

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