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Published: July, 2009; Vol 6, Num 2

 

The Business Case for Mental Health Parity

Mind/Body Connection

  • People with high rates of medical service have four times the prevalence of depression and anxiety disorders. 
  • Researchers estimate that 50 to 80 percent of all medical illnesses reported to physicians have a strong emotional or stress-related component.
  • Effective treatment of mental illnesses, especially depression, is associated with improved outcomes for chronic physical disorders.
  • Forty-three percent of all adults suffer adverse health effects from stress. Stress is linked to the four leading causes of death: heart disease, cancer, stroke and chronic lower respiratory disease.
  • Among all major medical illnesses, depression is the leading cause of disability in the U.S.

The new law does not require a group health plan to provide mental health and addiction coverage. It only requires that, if such benefits are provided, they be essentially the same as the plan’s medical benefits.

Yet, funds should strongly consider providing this coverage because of the large number of Laborers and family members affected by these problems and the only slight potential for increased cost.

A decision to withhold these benefits is unlikely to be a cost-saver because the impact will be felt elsewhere. Left untreated, people with mental illness consistently display higher medical claims. In addition, the impact of untreated mental health issues is seen in direct and indirect costs in the workplace, such as in increased rates of absenteeism and accidents, lack of productivity and lower morale.

Moreover, studies show that the construction industry has the highest rate of drug abuse and the second highest rate of alcohol abuse. A separate study shows the industry has the fourth highest rate of depression. Further, in these hard times, many Laborers are struggling financially, which adds another dimension of stress and anxiety.

Mental health parity and addiction equity allow Laborers and their families access to services to address these problems; services that were once considered unaffordable, based on previous benefit plan designs. Care and treatment of these disorders will ease other health issues because of the mind/body connection (see side bar).

For LIUNA signatory employers, provision of mental health and addiction services through the health and welfare fund will result in a stronger bottom line. Researchers estimate that depression causes a 20 percent loss in overall productivity for American employers. Studies find a 40-55 percent reduction in absenteeism with treatment of depression. In Minnesota, Blue Cross/Blue Shield’s insurance premiums fell by five to six percent after one year’s experience under that state’s comprehensive parity law. In North Carolina, mental health expenses have decreased every year since parity for state and local government employees was enacted in 1992.

The Congressional Budget Office estimates that parity will increase plan insurance premiums by less than one percent. For what is likely to be at most a tiny increase in cost, LIUNA health and welfare funds can substantially improve the health and well-being of their participants and strengthen employer bottom lines. Mental health parity and addiction equity is a strong step toward a healthier workforce and a healthier nation.