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Mental and emotional health needs are growing. Are your benefits keeping up?

By Alliant Employee Benefits / May 22, 2024

Nearly one-quarter of American adults—and more than one-third of those 18 to 25—suffer from mental illness, according to an annual U.S. government survey.

The growing need for mental health services is straining the capacity of employer-sponsored medical plans and employee assistance programs (EAPs). Nearly half of insured employees who have serious mental health concerns say they haven’t gotten the treatment they need.

Increasingly, though, employers are looking for new ways to help their plan members cope with behavioral health challenges. Many have supplemented their medical plans with programs that offer expanded provider networks (often via telehealth) and additional services, such as coaching and digital tools. Some are also rethinking the formal communication programs and the informal signals implicit in workplace culture that might encourage members to seek the help they need.

While these initiatives involve expenditures of both time and money, we believe that investing in employee behavioral health can produce significant financial and non-financial returns. Such programs not only alleviate the suffering of employees and their families, but they can also often reduce medical costs and improve employee productivity and retention.

Employee Mental Health Trends
Employers looking to identify plan members most in need of behavioral health assistance would do well to start with younger employees and those with teenage dependents. Over the past 10 years, mental illness has surged among younger adults: 36% of Americans ages 18 to 25 suffered from a mental illness in 2022, up from 20% in 2012. In those ages 26 to 49, the rate of mental illness rose to 29%, from 21%. Studies offer a variety of explanations for the growing distress in young people, including economic insecurity, isolation, social media use, and concern about political instability.

Questions about your benefits plan? Get in touch with an Alliant consultant.

Gaps in Existing Employer Benefit Programs

Although various mental health treatments (e.g., medication and therapy) have proven to be effective, too many members have a hard time getting help. Of people with employer-sponsored health insurance, 47% of those who rated their mental health as fair or poor reported a time in the previous year when they didn’t get the care they needed, according to a 2023 survey.

There are multiple causes for this treatment gap:

1. Provider shortages
Finding in-network therapists or psychiatrists can be difficult for members, and they are often met with long waits for appointments. Half of Americans live in areas with a shortage of mental health workers. Moreover, many mental health professionals don’t participate in insurance networks. Many employers are beginning to recognize the limitations of their mental health networks. In a recent survey, only 67% said their plans offered sufficient numbers of behavioral health providers. By contrast, 91% said their plans had enough primary care providers.

2. Mismatched needs and services
Traditional in-person therapy and employer assistance programs are not fully engaging employees with behavioral health concerns, especially the younger adults who are most in need. In part, this is because many of them are dealing with extreme stress and other conditions that aren’t classified as illnesses even though they limit the ability to enjoy life and work productively. Many younger people, moreover, prefer to interact through modalities that often aren’t featured in traditional offerings, including digital tools, text chat, and telehealth.

When employers offer a more modern suite of behavioral health offerings, the engagement rate is typically much higher than that of classic EAP programs. One popular provider of a traditional EAP program tells us that 6.5% of covered employees utilize its services over the course of a year. By contrast, a vendor that provides a wider range of tools, including digital assessments, therapy, and coaching reports that more than 18% of covered employees have used at least one of its services.

3. Reluctance to seek help
Despite the growing prevalence of mental health conditions, many people continue to experience a stigma in seeking help, believing, too, that they can deal with their issues on their own. The culture and policies of employers can encourage—or discourage—plan members from getting behavioral health assistance. Of people covered by employer plans who didn’t seek the mental health treatment they needed, the top reason cited was that they were too busy or couldn't get time off work.

Costs to Employers of Untreated Behavioral Health Issues

Mental illness extracts a high toll. It reduces people’s ability to function in all facets of their lives, including on the job, and increases the likelihood of heart disease, diabetes, obesity, and other serious conditions. For employers, the costs of ignoring or underestimating these issues surface in several areas:

Increased medical claims
There is a strong correlation between mental and physical health, so untreated mental illness can significantly increase the claim expense of a company’s medical plan. More than nine out of 10 adults diagnosed with behavioral health disorders also suffer from physical conditions, according to Evernorth claims data. Treating behavioral health issues can reduce the claims generated by other conditions. Adults who received such outpatient therapy incurred 17% lower medical and pharmacy costs in the 15 months after their diagnosis than those who did not undergo the same therapy, an average savings of $1,750.

Reduced productivity
Employees with behavioral health challenges often have increased absenteeism, lower effectiveness on the job, and higher turnover. WHO estimates that 12 billion working days are lost globally every year to depression and anxiety, at an annual cost of $1 trillion in lost productivity annually. The growing incidence of adolescent mental illness places burdens on employee-parents as well. Caring for these children takes 7.7 hours a week, on average, or basically four workdays a month.

The Path Forward

It is a reality of modern life that more and more colleagues and coworkers are struggling with depression, anxiety, substance abuse, and other mental health issues. But employers can play a significant role in putting workers and their families on the path to healthier, more satisfying lives.

Toward that end, Alliant believes that every company should examine the behavioral health needs of employees and their families to identify steps to get the right treatment to those who need it. This responsibility offers the added bonus of improving employee productivity and reducing medical claims costs.

Disclaimer: This document is designed to provide general information and guidance. This document is provided on an “as is” basis without any warranty of any kind. Alliant Insurance Services disclaims any liability for any loss or damage from reliance on this document.



This article is the first in a series to help employers understand and respond to the rise of mental and emotional health issues faced by their plan members.

This installment explores changes in mental health conditions, coverage gaps in traditional benefit plans, and costs to employers when employees and their families go without behavioral health treatment. The second article in the series will explore how companies can evaluate the behavioral needs of members and identify gaps in their existing benefit packages. The final article examines programs available to companies that want to enhance such packages.

Next in our series:

How to Meet Your Employees' Mental Health Benefit Needs