What Does This Mean for Long-Term Disability Insurance Claims Under ERISA?
As attorneys who represent individuals disabled by mental health conditions, we are deeply concerned by recent litigation targeting the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). This legislation, enacted with the aim of ensuring equal treatment for mental health and substance use disorders under insurance plans, is facing its most significant challenge in years. The lawsuit filed by the ERISA Industry Committee (ERIC) threatens not only the foundation of parity in healthcare but also raises serious red flags for anyone filing for long-term disability (LTD) benefits under ERISA for “mental/nervous” conditions.
This case is more than just a legal fight about federal authority. It could determine whether millions of Americans with depression, anxiety, PTSD, or substance use disorders will be able to access care, and whether they will have meaningful access to LTD benefits if they are unable to work.
Let’s break down where things stand, why this lawsuit matters, and how we see it impacting the real people we advocate for every day.
The Purpose of the Mental Health Parity and Addiction Equity Act
The MHPAEA was signed into law in 2008 with bipartisan support, and for good reason: it sought to eliminate the arbitrary and discriminatory practices that limited mental health treatment compared to physical conditions. Before MHPAEA, insurers routinely imposed lower reimbursement rates, restricted therapy sessions, and excluded substance use treatment from coverage altogether.
In theory, MHPAEA prohibits these practices. If an insurance company covers 60 physical therapy sessions for a musculoskeletal condition, it must also cover 60 psychotherapy sessions for major depressive disorder, if clinically necessary. If there is no annual visit cap for diabetes care, the same must hold true for PTSD.
In practice, however, insurance companies have continued to limit mental health benefits, especially in long-term disability insurance claims.
The Enforcement Problem—and the Biden Administration’s Attempt to Fix It
Despite the existence of MHPAEA, enforcement has been weak. Many plans and insurers still apply more stringent preauthorization rules, narrower networks, or reduced reimbursement rates for mental health care. As a result, patients often pay out-of-pocket or simply go without care.
In September 2024, the Biden administration issued updated regulations intended to close these enforcement loopholes. These new rules clarified what insurers must report to demonstrate compliance, including “non-quantitative treatment limitations” like talk therapy or medical necessity reviews. In other words, regulators wanted hard data to prove that mental health benefits were not being treated as second-class.
But within weeks, the ERISA Industry Committee—a lobbying organization that represents 100 of the largest employers in America—filed suit.
ERIC’s Lawsuit: A Major Setback for Mental Health Parity
ERIC’s lawsuit, filed in late 2024, argues that the new regulations exceed the federal government’s authority under MHPAEA and improperly impose burdens on employer-sponsored plans. ERIC also claims that the regulations would drive up costs and potentially reduce access to care.
Their lead attorney is Eugene Scalia, a former Secretary of Labor under the Trump administration and a well-known opponent of regulatory overreach. His involvement signals that this is not just an administrative dispute—it’s a major political and legal pushback.
While the lawsuit is currently paused—following a Justice Department announcement that federal agencies will reexamine the rule—it has not been dismissed. The future of the updated MHPAEA regulations remains uncertain. According to The Wall Street Journal, the litigation pause is designed to give a potential new administration the space to either revise or roll back the rule entirely.
The Real-World Impact: Mental/Nervous Limitations in Disability Claims
For individuals living with disabling mental health conditions, this fight is not abstract. It could directly influence their ability to access benefits under employer-sponsored long-term disability plans governed by ERISA.
Most group disability policies distinguish between mental health and physical conditions. While benefits for physical disabilities often continue until retirement age, LTD policies typically limit mental/nervous claims to 24 months, even if the condition is chronic.
This is known as the “mental/nervous limitation,” and it has become a standard feature in many ERISA-governed plans. Insurers frequently invoke it to terminate claims related to depression, anxiety, OCD, PTSD, bipolar disorder, and similar conditions after just two years, regardless of ongoing impairment.
We have long argued that this limitation is unfair and discriminatory, and we’ve seen insurers apply it inconsistently or incorrectly. The line between physical and mental health is not always clear. For example, someone with fibromyalgia or chronic fatigue syndrome may experience cognitive dysfunction and depression intertwined with physical pain. Similarly, traumatic brain injuries often involve both physical and psychological components.
If insurers and employer-plan sponsors feel emboldened by a successful challenge to the MHPAEA regulations, we may see more aggressive application of these limitations—and even efforts to narrow benefits further.
What This Lawsuit Says About the Power of Industry
Make no mistake: this litigation is backed by powerful interests. The ERISA Industry Committee is an influential lobbying organization representing employer-sponsored benefits in Washington. Their board of directors isn’t public—interested parties must register just to see who is making the decisions behind the scenes.
It’s not hard to see why the industry is nervous. If the Biden-era regulations are upheld, insurers and plan sponsors will face greater scrutiny, and potentially more lawsuits, over how they treat mental health claims. They may have to justify why their network is 90% physical medicine and only 10% mental health. They may have to disclose why claims for anxiety are denied more often than those for arthritis.
And this accountability costs money. That’s what ERIC is fighting to avoid.
Why This Should Matter to Every ERISA Disability Claimant
When you file for long-term disability, your claim is reviewed by the very same insurers and administrative structures that are now resisting parity enforcement. Even if your policy isn’t directly affected by MHPAEA, the legal reasoning in this lawsuit could bleed into how courts interpret ERISA obligations more broadly.
We’ve already seen how insurers cherry-pick evidence, ignore treating physicians, and rely on biased “independent” reviewers to deny claims, especially mental health ones. Stronger parity rules would help curtail some of those abuses by aligning the treatment of mental health with the standards long applied to physical illnesses.
Equality in Name Only?
It’s easy for organizations like ERIC to issue statements claiming concern about mental health access. But actions speak louder than words. Suing to block stronger enforcement of mental health parity, while claiming to care about access, is a contradiction that speaks volumes.
As attorneys for disabled people, we see the human cost when insurance plans fail to live up to their obligations. We know what happens when a person struggling with suicidal ideation is told their benefits are capped. We see the consequences when trauma survivors are forced back to work prematurely because their plan devalues psychiatric care.
The MHPAEA was intended to fix this. It will be a shame if insurance industry forces dismantle it.
What Can You Do?
Contact your representatives in Washington and let them know you want them to fight for mental health parity.
Click here for the Committee on Educational & Workforce
Click here for the U.S. Senate Committee on Health, Education, Labor & Pensions
One Surprise You Should Know About: Sun Life U.S.
Sun Life is one of the largest providers of employment and government benefits, a publicly traded company, and a global financial organization. In April, Sun Life made a $50,000 donation to the National Alliance on Mental Illness (NAMI) to support the organization’s program, which educates people to better manage their physical and mental wellness. In December 2023, the company issued a statement supporting the passage of legislation to require mental health parity for long-term disability insurance. We applaud Sun Life for taking a leadership role in supporting mental health, even as we fight for claimants whose disability benefits are being denied.
Concerned About Your Long-Term Disability Claim?
If you are struggling with a mental health condition and your disability benefits have been denied or terminated, we’re here to help. At Newfield Law Group, we’ve spent decades fighting insurers who unfairly treat mental health claims as second-class. Contact us today for a consultation.
UPDATE:
Anthem has settled a class action lawsuit brought by participants in employee health plans it administers, following negotiations and private mediation.
The plan participants claim that Anthem violated the Employee Retirement Income Security Act (ERISA) and the Mental Health Parity and Addiction Equity Act (MHPAEA) by improperly denying coverage for inpatient mental health and substance use disorder treatment based on impermissibly restrictive eligibility criteria.
The settlement comes after a New York federal district court certified the class of plaintiffs in March 2024 and issued an injunction for reprocessing benefits claims and declaratory relief on the ERISA claims.
The case is Marissa Collins et al. v. Anthem Inc. et al., case number 2:20-cv-01969, U.S. District Court for the Eastern District of New York.
Marissa Collins, who participated in her husband’s ADP employee health plan that Anthem administered, filed suit against Anthem and its affiliate, Anthem UM Services Inc., in April 2020. She claimed that Anthem applied overly strict criteria in processing mental health and substance abuse disorder claims, which contradicted the medical necessity criteria in the plan. Federal law prohibits insurance companies from using more restrictive coverage criteria for mental health treatment than it does for medical/surgical treatment.
