Note: The following article provides guidance for CBA Members only.
By Jason Coon
Recently, the CBA has received member inquiries about the results of parity reviews and questions they’ve received from auditors, benefits consultants, and compliance vendors regarding their health plan design—particularly during reviews related to the Mental Health Parity and Addiction Equity Act (MHPAEA).
One area of interest to the CBA involves plan exclusions related to gender dysphoria or gender transition procedures. Because gender dysphoria is listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM), some reviewers have raised questions about whether such exclusions could create a parity issue under MHPAEA.
For Catholic employers, these inquiries can understandably raise concerns. Fortunately, there are important legal protections and compliance principles that clarify how these issues should be addressed.
Why Employers Are Seeing More MHPAEA Reviews
The Consolidated Appropriations Act of 2021 (CAA) significantly expanded federal oversight of parity compliance. Under the law, employers must now maintain detailed documentation demonstrating that mental health benefits are administered in parity with medical and surgical benefits.
As a result, many employers are undergoing parity reviews conducted by:
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benefits brokers
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third-party compliance firms
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auditors specializing in Non-Quantitative Treatment Limitations (NQTLs)
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third-party administrators (TPAs)
These reviews often involve detailed examinations of plan documents and exclusions.
Because parity rules apply to mental health benefits, reviewers sometimes flag provisions related to DSM-listed conditions, including gender dysphoria.
However, it is important to understand what parity law actually requires—and what it does not.
What MHPAEA Actually Requires
The Mental Health Parity and Addiction Equity Act was designed to ensure that mental health benefits are treated comparably to medical and surgical benefits in areas such as:
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copayments and deductibles
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visit limits
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prior authorization requirements
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utilization review practices
Parity laws regulate how benefits are administered, not which treatments must be covered.
Employer-sponsored health plans retain authority under ERISA to determine the scope of covered services.
This distinction is critical when evaluating plan design questions.
The “Meaningful Benefits” Standard
Recent regulatory guidance discusses a “meaningful benefits” framework for parity analysis. Under this concept, if a plan provides any benefits for a particular mental health condition in any classification, it must provide meaningful benefits for that condition across classifications where medical/surgical benefits exist.
The key phrase is “if the plan provides any benefits.”
If a plan provides no benefits for a particular condition in any classification, the meaningful-benefits standard generally is not triggered.
This threshold is an important consideration when responding to parity review questions.
Religious Liberty Protections for Catholic Employers
Catholic employers who are members of the Catholic Benefits Association (CBA) also benefit from important religious liberty protections under federal law.
Members of the CBA are protected by federal court orders granting them permanent injunctive relief and prohibiting enforcement of federal gender transition mandates against CBA members whose sincerely held religious beliefs preclude coverage of such procedures.
Accordingly, CBA members may maintain plan exclusions for services related to gender transition or gender dysphoria without regulatory enforcement.
These protections recognize the ability of Catholic employers to provide health benefits in a manner consistent with their faith.
How This Applies to MHPAEA
Additionally, the Mental Health Parity and Addiction Equity Act (MHPAEA) does not require coverage under these circumstances.
The MHPAEA meaningful-benefits requirement applies only where a plan provides any benefits for a particular mental health condition in any classification.
If a CBA member plan provides no coverage for gender dysphoria services in any classification, the MHPAEA meaningful-benefits standard is not triggered and the statute does not require the plan to offer coverage for such services.
CBA recognizes the pastoral complexity of these situations and is actively reviewing whether offering care options outside the plan as a compassionate care option presents any further legal risk for our members.
What Catholic Employers Should Do
If your organization receives a parity review inquiry related to gender dysphoria or gender transition services:
- Do not assume the inquiry requires plan changes. Many reviews are advisory assessments conducted by vendors or consultants.
- Review your plan design carefully, including whether the plan provides any benefits associated with gender dysphoria.
- Consult legal counsel when responding to parity questions, particularly where religious liberty issues may be implicated.
- Coordinate with the Catholic Benefits Association, which continues to monitor regulatory developments affecting Catholic employers.
Continuing to Serve Employees Faithfully
Catholic employers have long sought to provide generous health benefits to employees while remaining faithful to the teachings of the Church. Regulatory developments can sometimes create uncertainty, but it is important to remember that both federal law and court rulings recognize the importance of protecting religious freedom.
The Catholic Benefits Association remains committed to helping its members navigate these issues so they can continue providing health coverage consistent with both legal requirements and Catholic moral teaching.