Employers, Participants Show Increased Focus on Mental Health Benefits

Coming out of the COVID-19 pandemic, many employees are willing to invest more in their mental health, despite concerns about the economic situation in the U.S., according to recent research reports conducted separately by HSA Bank and NFP Corp. 

In response to employee demand, many employers are offering more mental health benefits than in years past. Coverage of mental health care has increased to 27% of employers from 23% last year, according to HSA Bank’s 2023 Health & Wealth Index. 

Mental Health Improved Slightly in 2022 

HSA Bank, a provider of health savings accounts, surveyed more than 2,000 randomly selected U.S. adults in the fall of 2022 to gauge physical and financial health across the country. Respondents were scored based on their responses to 15 questions about their health plan enrollment status, health practices, mental health, ability to pay for health-related expenses and confidence in their health and wealth. 

After taking the survey, each respondent received a health score ranging from 0 to 100. The higher the score, the better the respondent’s physical, mental and financial health engagement. 

The Health & Wealth Index found that there was a slight increase in employees feeling confident in their mental health, rising to 83% in 2022 from 81% in 2021. Specifically, respondents in older generations were more confident in their mental health, with Baby Boomers more confident than those in Generation Z.  

However, the Index concluded that Gen Zers are more likely to obtain mental health care than those in older generations.  

“Mental health continues to be an important topic of overall health. And, of course, benefits,” the report stated. “Employers may want to create a company culture of support for the mental wellness of their employees.” 

HSA Bank also argued that mental health benefits coverage makes more of an impact in recruitment and retention. Those in Gen Z (61%) and Millennials (51%) are more likely to change employers due to improved mental health coverage, as opposed to 31% of those in Generation X. 

In terms of the types of mental health benefits most employers are offering, Kevin Robertson, chief revenue officer at HSA Bank, says employee assistance programs are typically the most common. 

An EAP is a work-based intervention program designed to assist employees in resolving personal problems that may adversely affect the employee’s performance, according to SHRM. Robertson says this could include telephonic support where employees can speak to an independent, third-party therapist whenever they’re having a bad day or are seeking support.  

“EAP programs can cover a broad spectrum,” Robertson says. “Most of the ones that I see employers utilizing [come from] a third-party entity that offers some kind of assistance or advocacy for different employee situations.” 

What Employers Can Offer 

As employees are increasingly investing more into mental health services, employers have an opportunity to help lower their participants’ health care costs, which can ultimately serve as an effective retention tool. 

NFP’s 2023 U.S. Benefits Trend Report found that about half of employees reported spending between $500 and $6,000 in 2022 on mental health services.  

“This is an incredible investment that employees are making in their mental health,” the report stated. “And at a time when it’s reported that 95% of respondents are concerned about the economic situation in the U.S.” 

However, the NFP survey indicated that 72% of employers do not plan to add additional mental health support on top of what they already offer. NFP argues that this is an opportunity for them to ease employees’ cost burden.  

“This can be done by exploring expanded services within the current offering to better support employee out-of-pocket spend,” the report stated. “As employees proactively spend significant dollars on mental health services, it’s clear they’re willing to invest in the care they need to improve their well-being.” 

Deb Smolensky, a senior vice president and global practice leader at NFP, stated in the report that “expanding employee assistance programs, providing greater access to virtual behavioral health, offering mental health days and introducing mental resilience training are but a few of the levers employers can pull to help their employee reduce stress.” 

Financial stress can impact not only physical and mental health, but it also impacts work performance and can compel employees to make poor or impetuous decisions, according to NFP. For example, some employees may feel compelled to alter their benefit selection toward the lowest-cost medical plan, which usually means a significantly higher deductible and out-of-pocket expenses.  

To help, employers may opt to offer an HSA alongside a high-deductible health plan in order to grow tax-free savings for qualified medical expenses. Flexible spending accounts and health reimbursement arrangements could also be offered to help employees afford mental health care.  

“All employers should be taking note of the connection between financial worries and mental health,” said Kim Bell, executive vice president and head of health and benefits at NFP. “Everything is trending in the wrong direction, and employees are feeling the crunch.” 

NFP’s annual US Benefits Trend Report supports employers with data generated from the company’s proprietary benchmarking database of more than 4,000 employers of all sizes.