As mental health costs rise, benefit managers seek new solutions

• Key Insight: Learn how employers must broaden behavioral-health benefits beyond therapy to curb costs and turnover.
• What's at Stake: Rising mental-health costs could materially increase employers' healthcare spend and workforce attrition.
• Supporting Data: Depression and anxiety cost about $1 trillion annually in lost productivity (WHO).
• Source: Bullets generated by AI with editorial review

Mental health has rapidly emerged as one of the biggest healthcare costs across every industry, pushing employers to expand their take on behavioral health support and well-being benefits.

Depression and anxiety already costs the global economy approximately $1 trillion in lost productivity every year, according to the World Health Organization (WHO), and according to recent research from financial services company Mercer, it has also become the second highest driver of organizations' healthcare and medical expenses. Finding more holistic mental health plans and policies should be top of mind for benefit leaders. 

"It doesn't surprise me that mental health has risen up the ranks like this," says Peter Rutigliano, behavioral health leader at Mercer. "Wanting to go into therapy and seeing the need for it has become less of a stigma than it ever has, which means that companies need to really recognize the importance of really attending to all of peoples' mental health needs."

Read more: Supporting the human side of the workplace

Nearly half of employees globally are concerned about their physical, mental, or cognitive health, underscoring the growing importance of well-being in the workplace, according to Mercer. Loneliness and stress were the most common challenges, with 36% and 45% feeling this most days at work. One in four workers even said they would consider leaving their current employer due to insufficient healthcare or well-being benefits, as just 24% include mental health screenings, while half provide counseling services.

However, despite a strong demand for a deeper, more holistic approach to mental health and a clear need for better coverage, the current economic climate is keeping many leaders from considering different, more progressive mental health solutions.   

"People might have wanted to take a much stronger step into this mental health world or decided to dial it back because the future feels uncertain and some of the more innovative programs cost a lot more than traditional solutions," Rutigliano says. "But if they start dipping their toes into these options they could really start moving forward in a positive direction." 

Building a more comprehensive mental health strategy

Large employers are taking more proactive steps to address behavioral health needs, which is a step in the right direction, according to Rutigliano. In fact, Mercer's research found that 64% of large employers said that expanding access to behavioral healthcare is a "very important" or "important" strategy over the next three to five years. Currently, 45% of these employers offer or plan to offer care options beyond phone or video sessions in 2025 and 29% already provide or will provide in-person counseling at one or more worksites. But Rutigliano urges leaders to push a little further by covering mental health coaches, additional education support, and even AI-powered tools.

Read more: 'An epidemic that keeps growing': Supporting employees through substance use

"There will be a place for AI in the mental health world but right now we're still figuring out where that is and we're going to make some mistakes along the way," Rutigliano says. "My recommendation is for companies to go into these conversations conservatively and figure out what works and what's best practice for their workforce." 

Above all else, Rutigliano recommends that leaders lean on early intervention as much as they can. This means creating an open and transparent culture where employees feel comfortable seeking help sooner so as to address those needs quicker and more effectively before they lead to long-term negative outcomes like high turnover rates and low engagement. 

"Do your employees feel like their senior leadership has their back? Do you care about their well being? Do you listen to employees when they bring up concerns? Do they really feel like they're listened to?" Rutigliano says. "Companies that answer those questions will not only see better productivity, less absenteeism, higher quality of work and better productivity, but people enjoying their work and staying longer."