COVID-19 put mental health benefits front and center for employers

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The COVID-19 pandemic has solidified the role of comprehensive, affordable mental health benefits as a retention strategy for employers, a pair of surveys released Monday found.

New surveys from the National Alliance of Healthcare Purchaser Coalitions and Mercer make the business case for packing quality mental health coverage into employee benefit plans. The findings, which cover hundreds of thousands of employees, include that mental health is a top area of focus for both employers as they craft benefits and for employees as they survey career options.

Employees’ mental health has a direct impact on their productivity, or their ability to perform their best at work, said Michael Thompson, CEO of the National Alliance, the umbrella organization for employer coalitions nationwide. His group’s members represent public and private employers that spend more than $300 billion annually on healthcare for more than 45 million Americans.

National Alliance conducted an online poll in August of 142 employers with at least 1,000 employees. Mental health and substance use access and quality tied as the top area of focus for healthcare strategies in the next one to two years.

“Employers have seen the impact of the deterioration of mental health during the pandemic and have actually seen it manifest in their workforce,” Thompson said. “With that in mind, I think they are anxious to provide necessary support and access for employees who do have concerns, issues with their mental health.”

Mercer found that more than half of U.S. employees reported some level of stress in the past year, and almost one-quarter said they experienced mental health issues such as depression or anxiety. One fifth said they’re financially worse off than before the pandemic, and almost the same share feels less physically healthy. Mercer fielded its survey of 14,000 employees in 13 countries—2,000 of them in the U.S.—between March and April.

Half of employees Mercer surveyed said programs that reduce the cost of mental health treatment are highly or extremely valuable. That finding wasn’t surprising, but it does validate the work employers have been doing over the past 18 months, said Kate Brown, who leads Mercer’s Center for Health Innovation.

Mercer also found that 45% of employees who felt they received good support from their employer during the pandemic also said they are less likely to leave their job as a result.

Mercer’s findings show that while mental and physical health benefits are important to employees, even more highly ranked was having flexible working arrangements, Brown said.

“It’s creating a more supportive culture for your people,” he added. “That’s what proved to be so important.”

The National Alliance survey found employers have become somewhat more open to COVID-19 vaccine mandates for their employees amid the rise in cases fueled by the delta variant. In a March survey, just 8% of employers said they would mandate COVID vaccines for all workers. That grew to 37% in August.

The reason it’s not higher is because employers are struggling economically with finding workers. Anything that could potentially cause people to leave is a concern, Thompson said.

President Joe Biden’s expansive new rule mandating employers with more than 100 workers require them to be vaccinated or test for the virus weekly changes the dynamic and, frankly, makes it easier for employers to move in the direction they were already headed, Thompson said.

Many employers wanted to roll out vaccine mandates but wanted to avoid alienating workers, he added. Biden’s mandate allows them to avoid that perception.

“There are definitely employers that will view this new regulation as providing cover for a strategy that was harder to implement independently, particularly independent of their competitors,” he said. “This will create a level playing field of all employees over 100 having some form of a mandate. It will make it more viable for many employers to do it.”

The percentage of employers anticipating a return to a stabilized business environment by the end of 2021 declined from 65% to 57% over the past six months, the National Alliance found.

Employers also cited affordability concerns with respect to their benefit plans as a big issue going forward, with 80% citing drug prices as a significant threat and 73% citing hospital prices as a significant threat.

Centers of excellence tied as a leading area of focus for companies’ healthcare strategies in the coming years, with 92% of respondents selecting it. That’s where health plans steer members to a specific provider for specific big-ticket procedures, like joint replacements.

Thompson said that aligns with the recent movement from a hands-off approach to employer healthcare delivery to one that’s more “selective and directive for employees.”

Employees who took Mercer’s survey also noted that their employers are their third most trusted source of health information, higher than private medical insurers, online retailers and even the government.

“That’s interesting finding if I’m in an HR seat,” Brown said. “I really have a high level of trust from my employees. I think that makes some of the choices employers have to make a little bit easier.”

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