Mental health can have a significant impact on a person’s ability to work at their full potential. When workers experience an injury or illness on the job, workers’ compensation insurance steps in to protect both the worker and employer.
In recent years, states have shown a growing interest in expanding workers’ compensation coverage and treatment of mental health. The COVID-19 pandemic accelerated state actions to strengthen mental health coverage in the workplace, particularly for frontline health care workers and first responders experiencing high levels of stress and trauma.
5 Things to Know About Mental Health and Workers' Compensation
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Each state regulates its workers’ compensation system differently with no overarching federal oversight. State policymakers can determine workers’ compensation coverage requirements, compensation amounts, duration of benefits, processes for appeals and other key components of insurance.
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Untreated mental health issues cost employers significantly in the form of worker absences and lost productivity on the job site. A 2007 study estimated that diagnosed depression alone among the workforce costs employers as much as $50 billion annually.
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Mental health is already covered under most state workers’ compensation laws, but proving a condition is work-related has proven difficult for many workers. Mental health conditions often result from multiple work and non-work-related factors, making it difficult to clearly show a workplace connection.
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First responders suffer from post-traumatic stress disorder (PTSD) at a rate 50% higher than the national average. A 2021 survey of nurses revealed that nearly a third of all nurses plan to leave their current job by the end of 2022, citing stress and burnout as the top reason for leaving. And at the height of the pandemic, health care workers and first responders accounted for nearly 75% of all workers compensation claims. In response, states have targeted much of their efforts to expand workers’ compensation coverage of these workers.
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Mental health-related injuries are specifically covered in some capacity by workers’ compensation in 34 states, although the extent of the coverage varies greatly. Seven states exclude mental health-related injuries from workers’ compensation coverage.
5 Ways States Can Support Mental Health in the Workplace
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Consider defining mental health-related injury as a compensable workplace injury. Colorado: Statute defines a “mental impairment” as a non-physical workplace injury resulting from visual or audible exposure to a psychologically traumatic event while working and is covered under workers compensation.
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Establishing policies where mental health-related injuries, like PTSD, sustained by first responders and frontline health workers have a presumption of work-related cause and are more easily covered by workers’ compensation. Maine: When police officers and firefighters are diagnosed by a licensed psychiatrist or psychologist with PTSD, the condition is presumed to have arisen from work and, therefore, covered by workers’ compensation. Employers have the right to present clear and rebuttable evidence showing the PTSD is not work-related.
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Extend, or make permanent, COVID-19 Medicaid reimbursement policies for telemental health providers. Arkansas: Legislation made permanent a pandemic-related policy that provided Medicaid reimbursement for telemental health services. These services can make mental health support in the workplace more accessible and less disruptive to the workday. Utah: Insurance providers in the state are required to cover telemedicine services, including for behavioral health.
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Enhance access to mental health services and supports in the workplace. Nevada: Requires the state to administer a mental health hotline and peer support program for first responders experiencing mental health issues related to their work.
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Establish a policy infrastructure in state government to address access to mental and behavioral health supports. Colorado: Convened a behavioral health task force, which recommended the establishment of the Behavioral Health Administration to serve as a stand-alone state agency promoting and administering the state’s behavioral health priorities. Legislation creating the BHA was enacted in 2022. Illinois: Created a task force to study the impacts of mental health and substance use disorders on employment opportunities within minority populations.