A ‘dire’ situation: Employees’ mental healthcare needs soar again

Despite the nation’s move toward normalcy and the COVID pandemic’s official end, employees’ mental health needs have skyrocketed over the last year, according to a survey released this week by the Business Group on Health.

- Advertisement -

And these needs, along with the expense of conditions like cancer—the No. 1-ranked driver of healthcare costs, are driving employers’ overall healthcare spend higher by nearly double digits (8.4%), according to the organization’s 2024 Large Employer Health Care Strategy Survey

The survey queried more than 150 employers, representing approximately 19 million employees in the U.S. More than 80% of the employers had more than 10,000 employees.

Mental health will top employers’ 2024 healthcare initiatives

Seventy-seven percent of employers report employees’ mental health needs are on the rise this year, according to the survey. That’s up by a third from the 44% of employers who noted this increased need among their workforce last year.

- Advertisement -

That “is a stark jump,” said Ellen Kelsay, president and CEO of Business Group on Health, during a news conference on the survey results. “And another 16% of employers anticipate seeing increased mental health needs in the future.”

Kelsay says those stats point to “the dire need for mental health services and [for employers to] support employees as they navigate their myriad needs in the area of mental health.”

Employers are listening. According to the report, 36% of employers listed expanding access to mental health services among their top healthcare initiatives for 2024—putting it in the No. 1 slot. 

Top Health Care Initiatives 2024

How are employers planning to increase employees’ access to mental health support? Nearly all intend to turn to online resources like apps, webinars, videos and articles, according to the survey.  

Additionally, 47% of employers expect to work this year with their benefits plan provider and other vendors to expand the mental health network they offer. And that figure is expected to jump substantially to 63% next year.

The percentage of employers offering mental health navigation programs, meanwhile, is expected to rise from 31% this year to 44% next year, according to the survey.

Another interesting move is that nearly half (44%) of employers this year are training employees to recognize mental health issues among their peers and help direct them to appropriate services, taking a page from the type of training that many managers receive. Next year, 52% of employers expect to conduct this employee training.

“We’re starting to see growth in the percent of employers that are doing similar training for peers who are not necessarily in a managerial position,” said Brenna Shebel, vice president of Business Group on Health, during the news conference.

The cost of healthcare continues to rise

For employers, providing coverage and services for employees’ mental wellbeing is just one piece of an ever-growing healthcare bill. The total average healthcare costs rose 8.4% to $17,201 per employee this year, with employers absorbing the entire increase, according to the survey. Employers’ contribution to the premium amounted to 68.4% of the total cost. Meanwhile, professional services group Aon reported finding an 8.5% increase in U.S. employers’ healthcare costs for next year, as well.

estimated health care costs

“Employers are really trying to shield employees from any affordability concerns by not passing along those increases to them,” Kelsay says. “They’ve done that now for a couple years running but how long they’re able to do that has yet to be seen.”  

Among the various conditions that drive healthcare costs for employers, cancer topped the list for the second year in a row. About 85% cited it as a cost driver. Musculoskeletal conditions once again ranked second, after falling from its perch in 2021 as the long-running highest cost driver. 

According to the report, the cost situation may worsen. It turns out that 18% of employers are seeing the impact of a higher prevalence of late-stage cancer due to screenings that were postponed during the pandemic. A whopping 41% of employers anticipate seeing late-stage cancer among their workforce in the future as a result of the delays.

“Employers are focused,” Shebel says, “on providing or covering screenings that are above and beyond what is typical in preventative care.”

Dawn Kawamoto, Human Resource Executive
Dawn Kawamoto
Dawn Kawamoto is HR Editor of Human Resource Executive. She is an award-winning journalist who has covered technology business news for such publications as CNET and has covered the HR and careers industry for such organizations as Dice and Built In prior to joining HRE. She can be reached at [email protected] and below on social media.