Do workers' compensation benefits cover mental health-related claims?

Do workers' compensation benefits cover mental health-related claims? | Insurance Business America

Do workers' compensation benefits cover mental health-related claims?

Mental illness continues to be an issue plaguing the country’s adult population, affecting the daily lives of nearly one in five (19.9%) Americans, the latest figures from Mental Health America (MHA) reveal. The number, according to the non-profit’s 2022 Prevalence Data, is equivalent to almost 50 million US adults, up from about 47 million in the previous year.

Mental illness, however, can carry a more far-reaching impact that goes beyond the individuals who are suffering from such issues. Mental health problems – including stress, anxiety, and depression – if left untreated, can make a seemingly straightforward task almost unmanageable, which can lead to poor outcomes in the workplace and exorbitant costs for companies.

Recent data from the Centers for Disease Control and Prevention (CDC) shows that mental issues such as depression result in an estimated 200 million lost workdays annually, costing employers between $17 billion and $44 billion. Mental illness is also a major cause of “disability, absenteeism, presenteeism, and productivity loss” among working-age adults.

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These figures point to the need for mental health problems to be taken seriously, according to the consumer legal information website Nolo. However, not all mental issues are covered by workers’ compensation benefits.

“The law gives you the right to seek workers’ comp for mental health issues in certain circumstances,” the site explained. “But there are many hurdles to overcome in proving your claim.”

Who are eligible for workers’ compensation?

Workers’ compensation is a type of insurance program that covers employees for injuries and illnesses sustained while performing their jobs. It is mandated by each state, which establishes different rules for when an employer should acquire coverage.

To be eligible for workers’ compensation benefits, individuals must be an employee, rather than an independent contractor. They will then be able to access medical treatment and receive a portion of their salaries after being injured or getting sick because of their work through the program.

Additionally, workers’ compensation operates as a no-fault insurance program, meaning that an injured employee does not have to go the conventional tort route of proving negligence to make a claim. But this also means that they generally cannot file charges against their employers for the injuries they sustain.

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What mental health conditions are covered by workers’ compensation insurance?

Coverage gets tricky, however, when it comes to work-related mental illness. Under workers’ compensation, mental health-related claims, including stress and anxiety, are reviewed on a case-by-case basis.

To obtain coverage, employees in most states will need to prove that their work caused their mental problems. They will also be required to establish how their issues arose from performing their jobs and not their life outside work.

“Physical injuries and illnesses are often easy to identify,” wrote Richard Frankel, managing partner at disability benefits specialist Bross & Frankel, in a guide on the firm’s website. “If a person is exposed to a toxic chemical at work, it is understandable that they may be entitled to workers’ comp benefits for their resulting sickness. But when a person suffers from an invisible illness, like stress or anxiety, it may be more difficult to obtain benefits because the connection is not as obvious.”

Mental health injuries that a workers’ comp policy may help cover include anxiety disorder, depression, post-traumatic stress disorder (PTSD), and stress. A condition must also be severe enough to disrupt employees’ ability to perform their jobs.

“While most people suffer from stress or anxiety at work, it typically does not rise to the level of being unable to work,” Frankel added. “However, for some employees, particularly bad work experiences or a difficult work environment may result in a diagnosis of a mental health issue. If this condition impairs their function to the point that they cannot do their job, then workers’ comp benefits may be awarded.”

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Frankel cited a nurse in a busy emergency room who routinely sees “victims of violence and accidents,” which may lead to trauma.

“If her ability to work is compromised as a result of her anxiety diagnosis, then she may be able to seek medical treatment and get compensation for her lost wages while she recovers through workers’ compensation,” he explained.

Other instances that may result in traumatic experiences for employees that can be covered by workers’ compensation include surviving a shooting in their workplace and an attack or harassment by an aggressive co-worker.

How can employees prove that a mental health condition is work-related?

Under workers’ compensation, if an employer challenges a claim, it is up to the employee to demonstrate that their issues stem from performing their jobs. But unlike physical injuries that can be easy to document, proving work-related mental problems can be more difficult. According to Frankel, a claim for mental health injuries or illnesses must have the following elements to be compensable:

  • The working conditions must be objectively stressful
  • The believable evidence must support a finding that the worker reacted to the conditions as stressful
  • The objectively stressful working conditions must be “peculiar” to the particular workplace
  • There must be objective evidence supporting a claim of psychiatric disability
  • The court must consider the credibility of the entire case, including any predisposition that an employee brings to the job

“With mental health issues, showing a nexus between your condition and your job can be more challenging,” Frankel explained. “In some cases, there is a traumatic event – like a shooting – that can be readily linked to your mental health condition. But in other situations, there may not be a direct connection between a single event – or a series of events – and your stress and anxiety.

“Many mental health injuries arise over time, due to the nature of your work or difficulties at work,” he added. “This can make it harder to prove that your injury was caused by work. For example, if your boss is abrasive, screams at you frequently, and imposes unreasonable deadlines, that could cause you significant anxiety – but it may be hard to prove that this anxiety isn’t the result of other situations in your life, such as financial stress.”

To overcome these difficulties, Frankel advised employees to work with experienced mental health professionals who can help them establish that a mental health issue was as a result of their jobs. He added that it would be helpful if employees can document the events in their workplaces that affected their stress and anxiety levels.