Sarah Borders June 1, 2026 1 min read

MHPAEA Lawsuit Allowed to Proceed

Another lawsuit alleging violation of the Mental Health Parity and Addiction Equity Act (MHPAEA) is underway, and the motion to dismiss was denied. BCBS of Illinois attempted to claim their requirement for 24/7 on-site nursing in residential treatment centers (RTCs) mirrors the 24/7 on-site care requirement in skilled nursing facilities (SNFs), but the court pointed out the carrier only requires SNFs to be licensed by the appropriate government entity and operate within the scope of that license, which means it is not necessarily a requirement that they have 24/7 on-site nursing. This means they impose a more stringent requirement on RTC than they do on SNF, which could potentially violate MHPAEA, and the case is allowed to proceed. The lawsuit is filed against both the TPA and the employer.

Sarah Borders

Principal, Benefits Compliance Solutions. Sarah has spent the last 15 years in the employee benefits industry, has numerous designations and serves on NAHU’s Employer Working Group Subcommittee and is an active board member of Austin AHU. She recently stepped down as Vice President of Benefits Compliance at one of the nation's largest brokerage firms to start her own compliance consulting practice. Her designations include an active license with the Texas Department of Insurance, CEBS (Certified Employee Benefits Specialist), Certified Health Care Reform Professional, HIPAA certification and Health Care Service Associate. She holds an MBA from Texas A&M Corpus Christi and a BA from University of Incarnate Word. Her consulting firm, Benefits Compliance Solutions, partners with employers to identify unknown risks and avoid hundreds of thousands of dollars in fines and lawsuits from failure to comply with their healthplan obligations.