'A diagnosis isn't what determines the claim, it's about how that condition impacts someone's ability to do their job,' says SVP at Sun Life Health
Recent findings from Sun Life suggest mental health is turning into a long-term disability (LTD) issue and could be at the core of why Canadian employers are struggling with talent retention.
According to Sun Life, mental health in Canada is the most common diagnosis for LTD claims, representing almost 40 per cent of claims in 2024 and LTD mental disorders claims are growing faster than other diagnoses.
The findings come at an opportune time, particularly around Mental Health Week. Marie-Chantal Côté believes the timing couldn’t be more relevant and sees this as an opportunity for employers to engage in deeper, more honest dialogue about the mental well-being of their employees.
“The number one takeaway from this entire conversation and the results that we're sharing is employers can play a significant role in removing stigma and helping people unmask mental health,” said, Côté, senior vice president at Sun Life Health. “Mental health is health. A diagnosis isn’t what determines the claim, it’s about how that condition impacts someone’s ability to do their job.”
Just last year, claims related to mental disorders hovered in the high 30 per cent range. Now, they’ve hit 40 per cent. And when broken down by gender, the figures are even more sobering, she explained.
“Now the number is 35 per cent for men and 45 per cent for women. Almost half of the reason that women are on long term disability is because of a mental disorder claim. So the data is showing us that the numbers are going up,” she emphasized.
The data also shows a shift in the types of mental health claims. While depression is steady, anxiety and adjustment disorders are also rising. Since 2019, claim volumes for adjustment disorder have doubled, with growth in anxiety disorders not far behind. Together, adjustment disorder and anxiety related claims make up over 40 per cent of LTD mental disorders compared to 25 per cent in 2019, Sun Life found.
“Adjustment disorders are about the difficulty adjusting to a new reality or life change,” she explained, pointing to ongoing effects from the pandemic, geopolitical instability, and economic uncertainty as all playing a role. “That resonates so much with what I’m seeing in the working population.”
Historically, LTD and mental health were seen as separate categories. She agrees that view is outdated as the parity between physical and mental health is one of the biggest cultural shifts in insurance and workplace wellness over the past decade.
But while the rise in claims is troubling, Côté believes it might also reflect progress as she points to increased usage of psychological services and a growing awareness of mental health resources as hopeful signs, even if they temporarily spike claim numbers.
Côté outlined a clear business rationale for why employers should prioritize mental health, not just for employee well-being, but for the strength and sustainability of their organizations.
She stressed that healthy workplaces are directly linked to better business performance. From attracting top talent to keeping them engaged and performing at their best, she argues that mental health support is a strategic necessity. And organizations that prioritize mental health have seen gains in productivity, retention, and resilience.
“Healthier and more resilient workplaces are more productive. All the data shows that,” she said. “It is hard to attract [top talent], and it is hard to train. It is hard to get to that full level of productivity,” acknowledging how competitive and costly the talent landscape has become.
Moreover, retention, in her view, should be just as much of a focus as hiring.
“It’s even greater to retain because they become a great source of knowledge, they are known by our clients. It’s just a win, win.”
Beyond individual resilience, Côté emphasized the importance of organizational resilience: the ability of an entire business to adapt to rapid, systemic change.
“When an organization together is more resilient, it can face many more of the negative challenges,” she said, pointing to the geopolitical volatility that businesses are now forced to navigate. “It's great for organizations because they build their own resilience and are able to face changing ecosystems very fast.”
While she believes that a culture of openness is something every employer should strive for, pointing to the importance of training, dialogue, and leadership engagement, culture alone isn’t enough as employers also need to provide the right resources.
That includes benefit coverage, support programs, and accessible tools that employees know how to use. She also urged employers not to overlook long-established supports like Employee Assistance Programs (EAPs), which remain underused despite being embedded in nearly every benefits plan.
Additionally, while Côté stressed that employers should promote other available options as well, like virtual primary care and mental health coaches, she believes manager support can be a critical success factor.
“We love the idea of supporting the managers so they can help because they can talk to employees about the solutions,” she said.
“Have the leaders talk about mental health. Just talk about it because even saying the words out loud starts to demystify,” she added. “We might get it wrong, it’s okay. We try again. Having the right tools is really, I think, the key.”
