Mental health is one of the most significant health care challenges facing Americans today. An unseen and often overlooked health care need, it impacts people everywhere — at home, in the workplace and at school. It is estimated that:
- 1 out of 5 adults in the U.S. experiences a mental illness at some point in their lives
- Nearly 10 million adults live with a serious mental illness
- One-half of all chronic mental illnesses begin by age 14, while three-quarters begin by age 24
The prevalence of mental illness is worrying; however, the fact that so many people are not receiving treatment for it should be even more concerning. Of those who suffer with a mental illness, nearly three out of five adults and half of children ages eight to 15 didn’t receive mental health services in the previous year. Given the ubiquity of this crisis, why aren’t people getting the help they need? Two reasons: the cost of treatment and the stigma surrounding mental health.
In fact, half of all mental illness patients rank treatment costs as the primary reason they don’t seek help, even if they have health insurance.
Is there a role that employers and benefits brokers can play in bridging the gap between treatment and costs for workers?
Looking to employer-sponsored benefits for help
Benefits brokers and their clients (employers) can play a major role in providing assistance for employees who need treatment for mental health issues. Not only would it reduce costs for the company, but it would help improve productivity and overall well-being for their workforce. Presenteeism — the all-too-common phenomenon of an employee coming to work sick, injured, overly fatigued or otherwise not operating at normal levels of productivity — has been estimated to cost more than $150 billion per year.
By sponsoring a flexible spending account (FSA), health reimbursement arrangement (HRA), or health savings Account (HSA), employers can provide useful financial tools for employees to cover out-of-pocket health care costs for themselves and their families. A company can offer an FSA or an HRA without meeting any health care requirement. In order to sponsor an HSA, the company must also offer a high deductible health plan (HDHP). Each account has its own benefit for companies, including reduced tax liability, and with the HDHP, lower premium costs.
With FSAs and HSAs, employees make contributions before taxes (up to the IRS-approved limit), saving themselves 30 percent to 40 percent; the pre-tax contributions also reduce FICA responsibility for the employer. With an HRA, total costs are specific to each employer because they fund the account (employees are not allowed to contribute), and the company also receives the tax benefit.
When employees choose to participate, they can use these CDH benefit accounts for a wide range of IRS-approved health care expenses, which include many mental health care treatments and services.
Using a CDH account for mental health care
Lower taxable income and a vehicle to save on health care is a boon for the participants, who can use pre-tax dollars towards an extensive list of IRS-approved eligible health care expenses. Per IRS Publication 502, “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” For those living with mental illness, there are many treatments covered by FSAs and HSAs, including:
Many mental illnesses, including depression, anxiety, obsessive/compulsive, eating disorders and bipolar disorder, can be treated with prescription medication. It is estimated that 1 out of every 10 Americans currently takes an antidepressant to help manage their condition. With a prescription, employees can purchase their medications using an employer-sponsored benefits account.
Care provided by a psychiatrist or psychologist
Some types of mental illness require specialized care from a psychiatrist or psychologist, generally through a referral from a primary care physician.
Psychiatrists, who are licensed medical doctors, are typically the ones who prescribe the antidepressants and other types of medications. They may also provide services such as psychotherapy.
A psychologist can deliver help for some mental health issues through different modes of behavioral or cognitive therapies.
In addition to prescription medications and office-based therapy programs, mental health patients can also seek help from rehabilitation centers for addiction or other medical problems that often accompany mental illness.
In- and out-patient treatment for alcoholism, drug addiction and other types of substance abuse qualifies as an eligible expense. This includes the cost of meals and lodging for in-patient treatment, as well as transportation expenses for attending meetings of Alcoholics Anonymous, Narcotics Anonymous, or similar recovery groups.
Acupuncture and hypnosis
One lesser-known eligible health care expense is acupuncture. Acupuncture is often used to treat people suffering from depression, eating disorders and other types of mental illness. In addition, with a letter of medical necessity from a physician, mental disorders treated with hypnosis may be paid for with a health care benefits account.
Working together to improve mental health
With cost as an impediment to seeking treatment for mental health, employers and brokers have the ability to provide the necessary financial tools for workers to get the care they need. A robust benefits plan that includes an FSA, HRA or HSA can improve morale, lower costs, and improve productivity. It’s a winning combination in the fight for better mental health care.
Bo Armstrong is a national conference speaker and author of numerous white papers and articles on the health care benefits industry. As DataPath’s Chief Marketing Officer, Bo focuses on identifying emerging market trends within the benefits industry and advocating for customers and their needs within DataPath. DataPath, Inc. creates cloud-based technology solutions for FSA, HRA, and HSA administration.