Can short-term disability be used for mental health conditions?

The everyday stressors of life during the COVID-19 pandemic left many school employees dealing with new or exasperated mental health concerns. While every organization approaches mental health benefits differently, we have received questions about an employee’s ability to use short-term disability benefits to help with mental health issues.

Check out the information below to expertly navigate short-term disability benefits as they relate to mental health conditions.

Do mental health conditions qualify an employee for short-term disability?

The answer is — it depends! First and foremost, the determination that any illness qualifies an employee for short-term disability is based on three things:

1. Your organization’s short-term disability requirements
2. How the health plan administrator or carrier interprets the plan requirements
3. A professional diagnosis of the illness

Oftentimes, carriers lean heavily on a professional diagnosis and treatment plan when evaluating whether a condition qualifies for short-term disability. The disability carrier will take into account:

• the severity of the illness, and
• whether or not it wholly and continuously disables an employee to the point that they can no longer engage in their regular work.

Does my organization have any say in whether an illness qualifies for short-term disability?

If your organization’s short-term disability benefits are fully insured (administered by a carrier), the carrier will determine whether an illness qualifies based on the criteria listed above.

If your organization’s short-term disability benefits are self-insured, your organization can decide whether an illness qualifies using the criteria above.

NOTE: Determinations should be made on a universal and reasonable basis. It is also important that all determinations, as well as the determination process, be adequately documented.

How should we handle short-term disability requests that are submitted due to mental illness?

We recommend following four simple steps to help your organization handle short-term disability requests for any type of illness:

1. Clearly and adequately communicate plan requirements with employees. Make sure plan certifications are distributed to ALL employees to help create a baseline understanding of what the plan provides.
2. File claims early and include all required documentation for appropriate healthcare professionals. This helps the process move as quickly and smoothly as possible.
3. Take ALL mental health claims seriously. Maintain a sensitive and professional approach when assisting employees who are looking for any type of mental health support.
4. Take advantage of your resources! If employees are requesting more mental health support, reach out to all partners, such as your SET SEG account executive, Employee Assistance Program (EAP), and insurance agent.

It’s no surprise that the pandemic made a tremendous impact on healthcare. From cost to accessibility to benefit plan design, all aspects of the model are being reevaluated and analyzed in a new light. By reviewing how businesses and organizations across the nation are adapting their healthcare plans to address new challenges, we have a better understanding of what’s to come in 2021.

Healthcare Costs Remain Unpredictable

Despite reduced healthcare activity during 2020 as COVID-19 delayed both preventive and elective care for the majority of plan participants, according to the 2021 Large Employers’ Health Care Strategy and Plan Design Survey conducted by the Business Group on Health, premiums and out-of-pocket spending are expected to increase by roughly 5.3% in 2021.

Other recent studies suggest that medical cost increases would fall in the 4% to 10% range. As so many unknowns remain, it’s difficult to advise whether our members should anticipate a surge in care being delivered next year as the pandemic wanes (and assume an even larger increase in costs), or if they’ll see a continued reluctance among their employees to seek care into 2021.

The Rise of Virtual Care

As businesses and organizations quickly adapted to deliver no-contact services, healthcare institutions also simultaneously shifted to provide ways to virtually administer care and treatment to patients. Telehealth services, previously low-utilized methods of accessing healthcare, were widely embraced by patients as a way to safely see a doctor in 2020. Trends indicate that telemedicine will continue to grow as a welcomed alternative to traditional office visits.

Virtual care for musculoskeletal issues, such as physical therapy for back and joint pain, shows the greatest potential for growth and cost savings. In 2019 and 2020, musculoskeletal issues — such as knee, hip, and back pain severe enough to warrant surgery — was ranked the top condition impacting healthcare costs.

According to a recent study on virtual physical therapy services, patients rated their satisfaction 91.2% and $1,000 was the minimum cost reduction when post-surgery tele-rehabilitation was used.

Laser Focus on Mental Health and Well-Being

This year, more than ever before, employers are recognizing the importance of supporting employees’ mental health needs. More than 69% of organizations provide access to online mental health support services, and that number is expected to increase to 88% in 2021. Employers are also addressing cost barriers by reducing out-of-pocket costs for mental health services.

Savvy Primary Care Strategies

In 2021, 51% of organizations plan to have at least one advanced primary care strategy, like contracting directly with primary care providers. In mid-Michigan, SET SEG members are already taking advantage of this cutting-edge approach and receive efficient, cost-effective healthcare at the SET SEG Family Healthcare Center.

The SET SEG direct primary care model has improved the delivery of preventive services, chronic disease management, and mental health for over 2,000 school employees and their families. Click here to learn more.

Healthcare is Integral to Employee Retention

In 2021, we expect employees will weigh healthcare benefits more heavily when considering employment opportunities and innovative healthcare offerings will be an integral piece of employee satisfaction. When planning engagement and retention efforts, make sure to consider healthcare as an important component.