Insurers that fail to comply with behavioral health parity rules could soon face serious penalties under new behavioral health legislation. On August 18, 2025, the U.S. House of Representatives passed the Mental Health Matters Act, aimed at holding insurers accountable and expanding access to behavioral health services nationwide.
The legislation passed in a 220-205 vote, with most Democrats supporting it and all Republicans opposing it. This vote highlights the growing political focus on mental health parity and the push for stronger enforcement in the insurance system.
If enacted, this behavioral health legislation could provide clarity and enforceability to mental health parity rules, ensuring individuals receive the care they are entitled to under law.
Key Provisions of the Behavioral Health Legislation
The Mental Health Matters Act builds on the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which requires insurers to provide mental health benefits on par with medical coverage. Compliance has been inconsistent, and enforcement has historically been limited.
This new behavioral health legislation introduces several key measures:
- Fines for noncompliant health plans: Health plans that fail to meet parity requirements could face monetary penalties.
- Ban on forced arbitration agreements: By removing these clauses, patients would have greater ability to pursue legal action against insurers for denied behavioral health claims.
- Expanded enforcement powers for the Department of Labor: The DOL would have broader authority to enforce parity rules and hold plan sponsors accountable.
James Gelfand, president of the ERISA Industry Committee (ERIC), raised concerns that this behavioral health legislation could increase litigation risks for employers while attempting to ensure compliance.
Strengthening School-Based Mental Health Services
This behavioral health legislation also emphasizes mental health services in schools:
- Grants for school-based mental health providers: The Department of Education (DOE) would fund programs to recruit and train counselors, psychologists, and social workers in schools.
- Retention and recruitment support: State agencies would receive grants to retain qualified mental health providers.
- Expanded access to trauma-informed programs: Schools would be encouraged to implement trauma-informed and mental health programs.
- Higher education accommodations: Colleges and universities would need to provide clear, transparent policies for students with mental health conditions.
These provisions show a commitment to early intervention and support for children and adolescents, helping prevent long-term mental health challenges.
Federal Support and Industry Concerns
The Biden Administration has expressed strong support for the behavioral health legislation, noting that it will:
- Strengthen access to affordable mental health care.
- Equip the Secretary of Labor with tools to enforce parity provisions.
- Ensure fair judicial review for improperly denied mental health benefits.
- Ban forced arbitration agreements that limit patient recourse.
However, payer organizations and employer groups have voiced concerns over the potential administrative burden and legal exposure that could result from the bill.
Behavioral Health Parity in the Spotlight
Parity has long been a contentious topic, with courts and regulators struggling to ensure equitable coverage for mental health services. One example is Wit v. United Behavioral Health, a nearly decade-long case alleging that the insurer ignored clinical standards when determining coverage for behavioral health services.
The behavioral health legislation complements recent efforts by the U.S. Department of Health and Human Services (HHS), which released a roadmap focused on:
- Expanding behavioral health system capacity.
- Connecting more Americans to care.
- Promoting mental well-being through supportive health environments.
Together, these initiatives aim to make parity meaningful and accessible.
Looking Ahead
If the Mental Health Matters Act becomes law, it could reshape behavioral health coverage in several ways:
- For insurers: Greater oversight and fines may encourage stricter compliance with parity rules.
- For patients: Individuals may gain increased legal recourse for denied claims and better access to school-based services.
- For schools and communities: Investment in mental health providers could improve student outcomes and address provider shortages.
This behavioral health legislation represents a critical step forward, ensuring that mental health benefits are treated with the same importance as physical health coverage.
As the bill moves to the Senate, all eyes will be on how this legislation is implemented and enforced, shaping the future of behavioral health care in the United States.
