Rising cost of mental illness concerns employers

Organizations need to develop programs to identify the underlying cause of disability claims

The majority of employers are concerned about rising mental health claims but they need to get proactive if they want to control the costs of disability in the workplace, a recent survey found.

The 2005 Watson Wyat [email protected] survey looked at absence and disability management, as well as broader health and productivity issues, and found that most organizations fail to track the costs and causes of disability clams and aren’t prepared to tackle the issue head on.

“The good news is that employers are more aware of the importance of the alignment between organizational health and workforce health,” said Joseph Ricciuti, national director of group benefit and health-care practice at Watson Wyat. “However, the bad new is that relatively few employers have plans to measure absences or address the underlying problems related to productivity.”

Mental health claims — such as stress, depression and anxiety disorders — present a unique challenge to employers.

Organizations must look beyond the narrow context of disability practices and begin to examine how management practices affect employee health, said Bill Wilkerson, CEO of the Global Business and Economic Roundtable on Addiction and Mental Health.

The survey showed that most employers aren’t measuring the total costs associated with employee absenteeism. Only 35 per cent of companies measure short-term and long-term disability benefit costs per employee, and even fewer companies look at the cost as a percentage of payroll (30 per cent for short-term disability and 28 per cent for long-term disability).

Most organizations are in the dark about the reasons behind disability claims with only 36 per cent reporting that they track the cause of long-term disability claims and only 38 per cent did so for short-term disability claims.

This leaves most organizations unprepared to identify potential problems before they arise.

“The lack of this information is an obstacle to developing proactive strategies for total absence management,” said Ricciuti.

Unfortunately the majority of companies have no concrete plans to tackle the issue of mental health claims.

Only 31 per cent indicated they are likely to implement programs to address the issue over the next two years and only five per cent said they have any plans to deal with the social stigma of mental illness.

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