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Mental Health Coverage Gets a Boost from Biden Administration: How the Proposal Affects Health Plans

Quick look: The growing need for mental health care has increased exponentially over the past several years, a demand which was largely driven by the pandemic. In response, the Biden Administration has proposed a new set of rules to improve coverage for mental health conditions. However, prior to this proposal, brokers had already seen a shift among clients asking about expanding benefit options, though this new ruling may cause the demand to spike even further. 

Since 2020, mental health benefits have been a steady topic of discussion. The pandemic prompted an increase in the number of people diagnosed and treated for mental health conditions, such as anxiety and depression. With more people actively seeking care, it’s begun to remove the stigma formerly associated with mental health and bring it front and center as a modern health benefit.

Last month, the Biden Administration added to the conversation by proposing a new set of rules to strengthen the 2008 Mental Health Parity and Addiction Act (MHPAEA). The MHPAEA proposed mental healthcare benefits to be provided on the same level as physical benefits under covered health plans. However, despite having this act in place, people still struggle with finding coverage at an affordable rate. To mitigate this, the newly proposed rule would:

Require adequate access to mental health care

The rule calls for a full evaluation to ensure equivalent access to mental health and physical care benefits. This includes reviewing the health plan’s provider network, how much is paid to out-of-network providers, and the frequency at which prior authorization is required in comparison to when they are denied.

Provide clarity about health plan allowances

There will be an inclusion of specific examples which make it clear health plans cannot use methods like restrictive authorization or narrower networks to prevent equal access to mental health benefits. When setting out-of-network rates, health plans will be required to use similar factors for mental health providers as used for medical providers.

Close loopholes preventing compliance with the MHPAEA

Non-federal government health plans were not required to comply with the MHPAEA when first enacted. However, the newly proposed rule closes this loophole and requires compliance of over 200 additional health plans to provide mental health care protections to 90,000 consumers.

This federal guidance mirrors the changes employees desire with regard to their workplace benefits. The goal is to make it easier and more cost-effective for people to receive mental health benefits under their employer-provided healthcare plans. 

Thus, employers are turning to brokers for guidance about how to incorporate mental health benefits in a way which will have the most positive impact without skyrocketing costs. For small- and medium-sized businesses (SMBs), in particular, offering affordable, competitive benefits is a common challenge but is one a professional employer organization (PEO) partner can help solve.

Addressing a much-needed change in mental healthcare coverage

The spike in mental health treatment has been driven primarily by a 5% increase among adults ages 18-44. With this demographic making up the majority of today’s workforce, it’s crucial for employers to include mental health benefits as part of their healthcare plans. 

According to a survey of over 1,000 full-time employees and 250 employee benefits leaders across the U.S.,33% said they sought mental health treatment in 2021, an increase from 19% receiving treatment in 2020. Yet, it was also reported, 45% of employees did not have their mental health treatment fully covered by their employees in 2020, though this was improved upon with only 19% reporting the same in 2022. 

The change in percentages shows how seriously employers are factoring in mental health care and restructuring their benefit coverage accordingly. Adding such benefits has become a recruiting must-have rather than a perk offered by a select few. 84% of employees surveyed agreed “robust and comprehensive mental health benefits” were an important part of a prospective employer offer, which means SMB leaders who fail to adjust their plans accordingly could easily fall behind the competition. 

Granting clients access to affordable mental health benefits

Fortunately, brokers working with a PEO partner like ExtensisHR have the advantage of offering their clients affordable access to mental health resources. This includes customized healthcare plans, employee assistance programs (EAP), and additional mental health tools and initiatives to give employees what they want and need. Among the partners ExtensisHR works with for mental health coverage include:


In a direct response to the surge in the demand for mental health care, Octave added Aetna to its insurance company partnerships. Previously, they partnered with Anthem Blue Cross and Health Net/MHN in California, and the United Healthcare HMR plan in New York, to provide in-network mental health services for over 12 million people across the U.S.


In a similar move, Empire continues adding more virtual behavioral healthcare companies to its partnerships. This includes Talkspace, the leading online mental health treatment service, which has served over two million people as of the end of 2021. Talkspace continues to provide a convenient and affordable way for employees to seek care.

HealthAdvocate for EAP

HealthAdvocate’s EAP+Work/Life solution identifies employees’ problems and delivers the support they need when they need it. Employees receive timely personalized treatment to maximize workplace productivity and reduce mental health costs.

Personalizing HR solutions with a PEO

With ExtensisHR, SMB employers have access to premium benefits at an affordable cost to fulfill current employee needs and stay competitive when recruiting. In addition to benefit administration, ExtensisHR also offers risk and compliance services, recruiting and retention strategies, and mobile-first technology to streamline processes and communication. 

Also, even though the demand for mental health benefits is at an all-time high, each company has specific factors which affect its final HR solution. With a variety of benefit options to choose from, having ExtensisHR as a PEO partner gives brokers confidence they’re equipped to do what’s best for their clients. And, with a person-to-person approach, SMB leaders feel prioritized and prepared for whatever comes next.

With the federal administration making it easier for people to access affordable mental healthcare benefits, employers are inclined to follow suit and adjust their benefit plans accordingly. Brokers can help their clients adapt more easily when making the connection to a PEO partner who is focused on their specific and changing needs.

We partner with brokers to help them strengthen and grow their client relationships through comprehensive HR solutions. Contact our team of HR experts to learn how we can help you. 

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