Normalizing Mental Health-The Benefits for Self-Funded Plans

Employers have to walk a fine line around employee mental health. It’s not appropriate for employers to probe their employees with personal questions about their physical or emotional health. At the same time, employers have a vested financial interest in making sure that members of their workforce have access to necessary mental health resources. Because mental health hasn’t historically been something people feel comfortable discussing at work, it can be awkward for employers to start conversations about their mental health programs and benefits. But those conversations have to happen in order for self-insured employers to maintain the most mentally healthy workforce possible.

Why Mental Health Matters for Self-Funded Employers

While business leaders may have a genuine and personal concern for their employees’ mental health, there’s also a strong business case for providing mental health support to employees who need it. With the exception of very small operations, essentially every business has employees who are living with mental illness—and their struggles can affect the business’s bottom line. 

According to the National Alliance on Mental Illness (using the most recently available data from 2020):

  • One in five American adults lives with a mental illness, and one in 20 has a serious mental illness.
  • More than 12 million adults have had serious thoughts about suicide. 
  • Anxiety disorders are the most common kind of mental health condition in the U.S., affecting 19.1 percent of adults. Depression is second, affecting 8.4 percent of adults. 
  • Only 46.2 percent of adults with mental illness received treatment in 2020, while only 64.5 percent of adults with serious medical illnesses received treatment. 
  • Nearly one-third of adults who live with a mental illness also have a substance use disorder
  • People with depression are 40 percent more likely than the general population to develop cardiovascular and metabolic diseases. 

In other words: mental illness is extremely common, often goes untreated and is linked with substance abuse and physical health problems. So the typical self-insured business employs many people whose unmanaged mental illnesses could lead to high health costs in the future.

Furthermore, we know that there’s a link between mental health and productivity. While there’s not a lot of recent research into how mental health affects work performance, one 2008 study found that depression interfered with a worker’s ability to do physical tasks about 20 percent of the time and interfered with cognitive abilities about 35 percent of the time. Anyone who’s lived through a period of extreme stress, anxiety and/or depression can probably attest that these aren’t good conditions for doing your best work. Supporting employees with mental health benefits, access to mental health programs and other resources is a way for employers to combat absenteeism and get the best possible work from their team.  

Normalizing mental health in the workplace can also be a recruiting and retention tool. Younger workers have grown up in a world where mental health care is discussed openly and mental health programs are commonplace. Many of these workers look for good mental health benefits as well as physical health benefits when they’re considering where to work. And current employees with mental illnesses may look elsewhere if they don’t feel supported at work. 

Approaching Mental Health with a Self-Funded Plan

Since self-insured employers pay for covered individuals’ claims directly, they pay the price (literally) when employees are experiencing health struggles—both physically and mentally. Employers with self-funded plans can mitigate their risk by taking a multi-pronged approach. 

Every business is unique, and some employers may need to address cultural issues within the company that contribute to poor mental health (like putting pressure on employees to work 12-hour days or burning them out with an unrealistic workload).

Employers can also make an effort to educate the workforce about any mental health resources that are available through the employee health plan or your employee wellness program. If you have an employee assistance program, provide a refresher about those benefits; if you don’t have an Employee Assistance Program, consider whether you want to introduce one. HR and/or managers may also create a list of local resources like community mental health programs and solicit discreet feedback from employees about what kinds of support they would find most helpful at work and through their health plan.  

Because self-insured employers have the flexibility to tailor their self-funded health plans for their specific needs, these employers are empowered to provide whatever mental health benefits they think would be most useful for their employees. (Self-insured employers aren’t required by the Affordable Care Act to provide mental health benefits; however, employers that do offer these benefits are required by federal mental health parity law to provide equal coverage for physical and mental health benefits.) Collecting employee feedback and evaluating past healthcare spending may help employers find cost-efficient ways to create a more mentally healthy workplace. 

Stop Loss Insurance Brokers, Inc. works with businesses to tailor their self-funded health plans so they can trim wasteful spending without sacrificing the quality of their mental health benefits. If you have questions about self-funding or stop loss insurance, contact me today!

Denise Doyle

Stop Loss Insurance Brokers, Inc. is your source for information about all things related to self funding. We are here to answer questions you have about stop-loss provisions, switching from fully-funded to self-funded insurance, or whatever else you may be wondering about around health insurance plans. Contact us today!


Contact Block (Blog)

Recent Comments

    Newsletter Signup

    Signup to start receiving the latest newsletters from StopLoss right to your email.
    Stay up to date on insurance trends and insights.

    Back to Top

    In 2011, the top 5 most expensive medical conditions treated in US hospitals were: Septicemia, Osteoarthritis, Complication of device, implant or graft, Liveborn, and Acute myocardial infarction

    From 2010 to 2013, the number of claims that were individually $1 million or above rose by 1,000%

    In 2017 approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape.

    In 2014, 98% of large firms (= 200 Workers) offer 1+ wellness programs to their employees.

    The most costly 1% of patients account for 20% of national health expenditures – accruing average annual expenses of nearly $90,000 per person.

    6% of firms offering fully-insured plans report they intend to self-insure because of Obamacare.

    In 2014, PPO plans remained the most common plan type, enrolling 58% of covered workers.

    In 2012, 93% of businesses with 5,000+ employees and 80% of companies with 1,000-4,999 employees were self-funded

    Massachusetts has the third-highest prevalence of self-funded insurance in the small-group market (Fewer than 50 employees).

    In 2013, the average deductible was $2,906 for individuals selecting plans from marketplaces. This compares with average deductibles of $1,135 for an individual with employer coverage.

    In 2013, the average annual premiums for employer-sponsored health insurance are $5,884 for single coverage and $16,351 for family coverage, up 5% and 4% respectively from 2012.

    From 2010 – 2013, cancer followed by chronic/end stage renal disease and leukemia accounted for the top 3 costliest illnesses.