NFP's Alecia Henderson argues why plan sponsors need to go beyond the paper in the benefits plan
The role of employers in supporting mental health has evolved significantly, and that evolution continues to accelerate. While mental health had been gaining attention among plan sponsors well before 2020, the pandemic, rise of hybrid work and increasing burnout rates have deepened the conversation. As the conversation around employee mental health continues unabated, the pivotal support from their benefits and employers must take centre stage.
Today, employees increasingly expect their employers to play an active role in supporting their mental health. This means creating a work environment that is not only responsive but also proactive with policies and benefits that address mental health in a holistic way.
Enhanced Coverage and Accessibility
A key trend in employee benefits is the enhancement of mental health coverage. Between 2019 and 2023, mental health benefits paid by insurers rose by 120%—a more significant increase than any other benefit category, according to data from the Canadian Life and Health Insurance Association (CLHIA).
While an uptick in claims might traditionally be seen as a concern, this growth shows that people are getting the support they need as the stigma around seeking mental healthcare has decreased across demographics, and employees are recognizing the value of accessing these resources.
Historically, coverage for psychology services often mirrored that of other paramedical benefits, with annual maximums of $300 to $500. With hourly rates for therapy typically between $100 to $200, these limits were insufficient for meaningful treatment plans. To address this gap, plan sponsors have adjusted their offerings — raising annual maximums and including more practitioner types to make care more accessible and affordable.
Beyond Benefits: Policies that Promote Wellbeing
Beyond traditional coverage, employers are also exploring policies that promote work-life balance and overall wellbeing. It’s not just about what’s on paper in the benefits plan. Time-off policies, flexible working arrangements all play a critical role in supporting employees’ mental health.
Equally important is effective communication. Even the most comprehensive benefits package can fall short if employees aren’t aware of what’s available or how to access the resources when they need help.
The Financial Case for Mental Health Investment
While the financial implications of increased mental health claims are significant, they are a worthwhile investment. Mental health concerns continue to drive both absenteeism and presenteeism, making early intervention and access to care a business imperative.
Mental health claims now account for approximately one-third of disability spending. Canada Life reports that 39% of short-term and 46% of long-term disability claims involve a secondary mental health diagnosis.
The return on investment extends beyond cost management. Enhanced mental health benefits are a powerful tool for attracting and retaining talent, especially among younger employees. As plan sponsors navigate this evolving landscape, ongoing dialogue with employees and benefits advisors is key to building relevant programs.
Mental health is interconnected with physical health, work-life balance and overall employee wellbeing. By taking a comprehensive and informed approach, employers can meet employees where they are and providing the resources they need to thrive.
Alecia Henderson is the senior vice president, corporate benefits at NFP.
