May is Mental Health Awareness Month. This is a timely moment for business leaders in Texas to examine how mental health intersects with workers’ compensation.
Though mental health claims currently account for less than 2% of all workers’ compensation cases in the U.S., their impact is far more significant than the number suggests. According to Business Insurance (October 2024), these claims cost 3.5 times more and last over 3.5 times longer than their non-mental health counterparts. That’s a cost multiplier few businesses can afford to ignore.
Why So Few Mental Health Claims?
Despite the growing awareness around workplace mental health, the number of claims remains disproportionately low. Several factors contribute to this:
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State Laws Vary: Some states place strict requirements on proving that a mental health condition is work-related. Texas, for instance, generally requires clear evidence that job conditions were the primary cause—not just a contributing factor.
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Stigma and Lack of Awareness: Many employees are unsure whether they’re even eligible to file a mental health-related claim. Others worry that disclosing these struggles could hurt their careers.
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Documentation Challenges: Mental injuries don’t show up on X-rays or MRIs, making them harder to document and easier to dispute.
As the nature of work evolves, with more remote teams, increased job stress, and blurred boundaries between work and personal life, the case for recognizing mental health claims is becoming more compelling.
Why Mental Health Claims Cost So Much More
There are several reasons these claims are more expensive and harder to close:
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Longer Recovery Time: Mental health conditions often delay return-to-work timelines, especially when combined with physical injuries. The emotional toll of a job-related trauma doesn’t follow a predictable schedule.
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Complex Treatment Plans: Therapy, medication, and frequent check-ins add up quickly. Unlike a broken bone, mental health recovery doesn’t follow a standard protocol.
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Limited Provider Networks: Many therapists don’t accept insurance. When they do, access may be limited by visit caps or referral delays—further prolonging treatment.
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Comorbid Conditions: Many workers facing mental health issues also struggle with physical conditions like chronic pain, increasing total claim costs.
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Fragmented Systems: Lack of coordination between primary care doctors, mental health providers, and claims administrators often leads to redundant or delayed care.
The bottom line? Mental health-related claims might be rare, but when they occur, they demand more time, more money, and more coordination to resolve.
Long-Term Disability and the Mental Health Link
Mental health is also a leading driver of long-term disability. While 10–20% of LTD claims cite mental health as the primary reason, up to 65% list it as a secondary issue. Despite this prevalence, most LTD policies only cover mental health-related claims for up to 24 months. This restriction, paired with ongoing stigma, creates a difficult road back to work for many employees.
Workers who hit this cap may be forced out of the workforce or shift to government programs like Social Security Disability Insurance, increasing the long-term burden on businesses and the system.
What Employers in Texas Should Do Now
For Texas employers (especially those in high-risk or high-pressure industries like construction, healthcare, and tech), it’s time to rethink how mental health fits into your risk management strategy:
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Train Supervisors: Equip frontline managers to recognize signs of stress, burnout, or trauma early. They are your first line of defense.
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Review Your Workers’ Comp Program: Understand how your carrier handles mental health claims and what documentation is needed.
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Support Early Intervention: Promote Employee Assistance Programs (EAPs), wellness benefits, and confidential counseling resources.
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Communicate Clearly: Make sure your workforce understands what mental health support is available and that it’s okay to use it.
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Partner Strategically: Work with brokers who understand both the legal and human side of mental health claims in Texas.
A New Chapter in Workers’ Comp
Mental health claims may still be the minority, but they are no longer the exception. As awareness increases, so will the expectations for employees to voice concerns, for employers to take action, and for insurers to make adjustments.
Watkins Insurance Group works with Texas businesses to develop proactive workers’ compensation strategies that reflect today’s workforce realities. From coverage audits to return-to-work planning, we help our clients stay prepared because protecting people means looking out for the whole person.
Want to know how your current workers’ comp policy addresses mental health? Contact a Watkins Insurance Group advisor for a confidential review and practical next steps.
