Employer mental health companies are flooding into the behavioral health startup market. This comes after employees say behavioral health benefit programs are essential to establishing a positive work environment.
However, it is unclear how effective these plans actually are because of conflicting research results.
Additionally, as the market for employer mental health plans becomes increasingly saturated, only the most comprehensive options may be able to win contracts with employers in the future.
More than 90% of U.S. workers say employer-sponsored mental health insurance is or will be important to their workplace culture, according to a new poll from the National Alliance on Mental Illness (NAMI).
The poll was conducted in January 2024 and focused on full-time workers employed by companies with 100 or more employees.
NAMI CEO Daniel H. Gillison Jr. said, “This poll makes no mistake: Today’s workers are empowering their employers to take ownership of their mental health by talking about their mental health, providing training, and providing support. “It shows that people want people to take care of their mental health.” In a statement.
Employers with employer-sponsored mental health insurance are also more likely to feel comfortable sharing about their mental health at work, by 15% compared to employees without insurance. did.
Investing in health and human services companies can also save employers money.
Five of our partner employers save an average of $462 in annual medical billing costs per engaged member, translating to $39.8 million in total direct savings, according to a new analysis by health and benefits company Vitality. I found out that it can be reached.
The analysis found that when all program and incentive costs are considered, employers can achieve a 180% return on investment in direct benefit savings.
Contradicting Vitality’s findings is an independent study that found that employee wellness initiatives did not make a reliable difference to mental health. The study found that volunteering was the only type of intervention that actually had an impact on workers’ well-being.
“The results of this article call into question the popularity and validity of individual-level mental health interventions, including mindfulness, resilience, stress management, relaxation classes, and health apps,” the study authors wrote. writing.
Regardless of effectiveness, the market for employer mental health programs is becoming increasingly saturated, potentially making it more difficult for point solutions to secure contracts with employers.
“Employers are being significantly impacted by these focused solutions,” Author Health CEO and former Optum executive Katherine Hobbs said at BHB’s VALUE 2022. We all do. And it’s hard for them to sort it out. …Employers also need this more holistic approach to managing their employees. ”
The flood of point solutions means that employers will quickly move from one EAP company to the next if the ROI isn’t good enough.
“The labor market is so tight that [the last few years]the focus was on implementing benefits that would make employers more competitive,” General Catalyst principal Candace Richardson previously told BHB.
“We have a lot of great-to-have benefits that focus on retention,” Richardson continued. “But as companies review their budgets and make very difficult decisions around layoffs, part of the process that CFOs are going through is figuring out how they’re spending on benefits. .And is he getting the ROI that he needs to see?”
Employer mental health companies may now be left scrambling to determine which can most clearly demonstrate the most comprehensive and convincing evidence of ROI.
