The apparent rise in mental disability claims is a significant issue for disability insurers and workers’ compensation systems. The observed rise in workers’ compensation claims for mental injury must be interpreted in context.
I accept
the following as a fundamental principle for
workers’ compensation:
If work is the cause of injury and disability, then the compensation and treatment should be funded by the employer.
Failure to recognize work as the cause externalizes costs to others including the worker, other workers, and the community at large.
The cost of compensation
and treatment, the main components of workers’ compensation premiums nominally
paid by the employer, are properly reflected in the overall cost of production.
Handwringing
over costs often misses this underlying premise. The degree to which any statute results in work-related
cases of mental injury being discouraged or denied shifts more costs from
employers (the nominal payers of workers’ compensation premiums) to taxpayers (who
fund social welfare), other workers (who fund social insurance), and insured (who
fund some or all the costs for disability insurance). Externalization of work-related mental
disability costs to other insurers and workers amounts to a subsidy of the cost
of production.
Even if workers’
compensation fully covered all work-related cases, workers suffering
work-related mental injuries must still bear the burden of the harm, and with
their families, carry some of the financial
loss.
Recap
In earlier
posts in this series, I provided data on the increasing numbers of accepted
workers’ compensation and disability insurance claims for mental injuries. Here is a brief recap of our discussion so
far.
Work-related
mental injury and disability have always existed but not always identified,
accepted, or counted. At least some and perhaps most of the observed
increase in mental disability claims may be attributable to changes in definitions
of mental injuries, refined coding practices, decreased stigma, increased advocacy
and awareness, reduced barriers to filing mental disability claims, and changes
in the broader work environment.
Greater identification
and recognition of mental injuries allows for greater access to short and
long-term disability funds; recognition of the work-relatedness of some mental
injuries leads to a rise in mental disorder claims for workers’ compensation. Disability insurance and workers’
compensation both have administrative imperatives that drive the need for improved
access to diagnostic and treatment services. Disability insurers have an added
incentive to ensure claims that are work related are properly attributed and
compensated by workers compensation; workers’ compensation has statutory and
fiduciary requirements to ensure that only claims within the scope of coverage
are accepted.
Financial support
for working-age persons with mental disabilities is limited. Welfare (social assistance) may be available
to most and most of the employed labour force have access to social insurance
for severe and prolonged disability.
Private
group and individual disability insurance plans generally offer greater
financial support than social insurance but are only available to a minority of
the employed labour force; financial
supports for work-disabling mental conditions are typically time limited.
Workers’
compensation typically offers greater financial support than disability
insurance; while covering nearly all workers, the path to an accepted claim for
mental disability is challenging ( by virtue of the work-relatedness
requirement, onus and standard of proof levels, diagnostic services
access/availability, restrictive definitions and exceptions that may apply).
Greater
recognition, changing definitions, and reduction in stigma may increase claims …
and that trend is reflected in the data workers’ compensation and disability
insurance data.
What to
keep in mind when looking at Workers’ Compensation Mental Injury data
Understanding
what is going on in the data is not simple.
What gets counted, what periods are involved, administrative backlogs,
and even the coding practices will influence reported data.
As noted in
earlier posts, work-related mental injuries may arise after physical injury, occupational
disease, or treatment. Mental
disabilities may also arise without physical injury or disease through workplace
bullying, harassment, and overwork. Data
that differentiates the nature and source of mental injuries are important to
understanding how mental disability claims are occurring and changing in a
jurisdiction.
Mental-injury
claims data must be well understood before attempting any comparisons within a jurisdiction
over time or across jurisdictions. Even
if data in multiple jurisdictions report identical categories of data, underlying
differences in definitions, coding practices and coverage context may inhibit
meaningful comparison.
As you
examine the data across jurisdictions, verify consistency of definitions,
practices, and scope over the study or reporting period. Confirm the process and terminology for claim
reporting, consideration, and decision during the reporting timeframe. These considerations are in addition to
accounting for the usual factors such as differences in demographics,
industrial mix, etc.
In this
part, we look at data and recent changes in one workers’ compensation
jurisdiction to highlight the complexity in understanding reported data. The example is one with a high degree of
transparency around work-related mental injury.
We will then consider some of the implications for disability insurers
in the long and short-term disability space.
Mental
Disorder Claims – WorkSafeBC Data
Few
workers’ compensation authorities publish data on mental disability claims. WorkSafeBC is an exception.
WorkSafeBC
is the exclusive insurer for workers’ compensation in British Columbia,
Canada. Coverage extends to about 2.7
million workers (about 95% of the employed workforce) and 280,000 employers in
a province of about 5.5 million people.
WorkSafeBC’s public accountability and transparency regarding mental injuries is well documented. The 2023 Annual Report is titled “Toward psychological health and safety” [see https://www.worksafebc.com/en/resources/about-us/annual-report-statistics/2023-annual-report/2023-annual-report-2024-2026-service-plan?lang=en] and provides details on the current strategies. The annual report notes a nearly 30% increase in psychological-injury-only claims over the last five years.
This tells only part of the work-related mental injury statistical story. WorkSafeBC also publishes an annual Statistics report. The numbers in the following table not only account for the psychological-only-claims but also existing claims or claims for other injuries that have mental disorders to be considered as part of the claim. The following table comes from the Statistics 2022 publication, the most recent version available: [available at https://www.worksafebc.com/en/resources/about-us/annual-report-statistics/2022-statistics ]
This shows that Allowed claims for mental disorders have grown. It also demonstrates the status or disposition of other claims reported. In workers’ compensation articles, claims are often described as either “accepted” or “denied”. In practice, the claim process is not a simple binary categorization.
The above table
reveals a more accurate portrayal with clearer definitions regarding the status
and disposition of mental disorder claims considered:
1. Claim data for 2022 is
as of October 23, 2023. Data for 2020 is as of January 31, 2021. Data for 2019 is as of January 31, 2020. Data
for 2018 is as of January 31, 2019. Data for 2017 is as of November 30, 2018.
2. Disallowed claims are
those that do not meet the requirements of section 135 of the Workers
Compensation Act.
3. Claims that require no adjudication or are rejected may have been
filed in error or be rejected if the worker does not have WorkSafeBC coverage.
4. Suspended claims are
often those where the worker does not respond to a request for additional
information or withdraws the claim. Suspended claims may proceed at a future
date.
Why Data
from One Jurisdiction Varies from Source to Source
The data
provided by WorkSafeBC in the annual and
statistics reports differ from those provided by the Association of Workers’
Compensation Boards of Canada (AWCBC) in its National Work-Injury Program
(NWISP) report. The NWISP 2020-2022
report notes:
This report contains Lost Time Claims by calendar year of injury, or diagnosis in the case of disease, that have been accepted for payment during the year of the accident – or in the three-month grace period (January 1st–March 31st) immediately following the reference year.
The AWCBC NWISP definitions page (see https://awcbc.org/en/statistics/national-work-injurydisease-statistic-program-definitions/)
notes that the Nature of Injury coding refers to the “principal physical
characteristic of an injury/disease”. For
BC in the years 2020-2022, the NWISP report records the following accepted
clams under Code 52 Nature of Injury [(year) count]: (2020)1303, (2021) 1599, (2022) 1559. Timing, reporting, and coding differences account for the lower
counts in the NWISP when compared to the same years in the annual and
statistics reports.
Changing legislation
Even this detailed table lacks another key contextual factor. As with most jurisdictions, the issues of work-related mental injury and disability were of significant concern to workers’ compensation policy makers and stakeholders.
The Royal
Commission on Workers’ Compensation in British Columbia nicely summarizes the
issues as they stood in the late 1990s [ see Volume 2 Chapter 4 in “For the
Common Good : Final Report of the Royal Commission on Workers' Compensation in
British Columbia”, 1999]. The heightened
awareness of mental injuries was evident in the public hearings and research
briefs received by the Royal Commission. The work of the Royal Commission and other
reviews urged changes to the workers’ compensation legislation.
Bill 49, Workers
Compensation Amendment Act, 2002 contained a provision for “mental stress” claims. The provision was narrow and had restrictions
but was a shift toward greater acceptance.
Over the
years, the term “mental disorders” replaced “mental stress” and the section expanded in ways that allowed
for greater acceptance of claims. The
current section of the Workers Compensation Act of BC , Section 135 [available at https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/19001_04#section135
] includes a presumptive clause for “eligible
occupations” such as correctional officer, police officer, and emergency medical assistant. It also provided for additional occupations to
be added to the presumption by regulation.
Presumptions
I’ve
mentioned presumptions in previous posts in this series. Although almost always
rebuttable, presumptive clauses are more than symbolic gestures; they have real
consequences. For example, presumptions:
- Shift
the onus away from the worker having to prove work-relatedness
- Reduce
stigma associated with filing claims.
- Speed
processing time from consideration to decision (decrease individual case
investigation, reduce processing times, may reduce suspended claims by
lessening some evidentiary needs)
- May
increase speed of access to needed treatment.
- May
decrease worker appeals.
Presumptions
change processes and operations of workers’ compensation insurers as reflected
in the WorkSafeBC data.
In 2018, a
new mental-health presumption for municipal and federal firefighters, police,
paramedics, sheriffs and correctional officers was established.
In 2019,
additional occupations were added. These
included emergency response dispatchers, nurses, publicly funded health-care
assistants, as well as forest firefighters, fire investigators and firefighters
working for Indigenous organizations.
Effective June 2024, the presumption was expanded yet again, adding to the mental-health presumption community-integration specialists, coroners, harm-reduction workers, parole officers, probation officers, respiratory therapists, shelter workers, social workers, transition house workers, victim service workers and withdrawal-management workers.
The percentage
of allowed claims adjudicated under presumptive clauses has typically increased
in the years following the expansion of eligible occupations.
Implications
for Other Disability Insurers
In most
jurisdictions, employment-based disability insurance plans (short and long-term
disability known as STD and LTD) are not universal and those that exist do not
always cover mental injuries. Group
disability plans are more common in unionized organizations, among larger
employers, and in certain sectors such as healthcare.
In the BC
context, disability insurance extends to about 1.3 million individuals,
primarily through group plans. If
premiums are paid for in whole or in part by the employer, benefits are
taxable. Coverage ranges from about 50%
to 70% of earnings.
As noted in
previous posts, disability insures have an incentive to control costs where
another form of insurance is a first payer, or benefits can be
coordinated. Workers’ compensation is the
first payer for work-related injury including mental injuries. Many workers who would qualify for STD or LTD
coverage may be required by their insurer to apply for workers’ compensation if
there is a possibility of the mental injury being related to either a physical
work injury or work-related occupational disease or a psychological only workers’
compensation claim. From the employee perspective, the benefit under workers’
compensation is generally greater than that from STD/LTD so there is an
incentive to seek this coverage. Health care costs related to an accepted
workers’ compensation claim may also increase the incentive to claiming .
Changes in
the presumptive clauses have three other important impacts for disability
insurers. The fact workers’ compensation
may cover certain mental disorders raises the prospects of injured workers
seeking benefits because of the increased awareness. Increased numbers of people seeking benefits
for mental disorders will increase the competition for diagnostic and treating
mental health professionals—an already under-serviced provider segment. The qualification difference between STD/LTD
and workers’ compensation will result in cases started under a disability
benefits plan being retroactively covered by a workers’ compensation claim,
adding complexity to claims handling.
Besides the
direct cost and workload issues, workers’ compensation claims that are rejected
or disallowed may well be subject to reviews and appeals, protracting the claim
consideration. We know that the
iatrogenic effects of such processes may extend disability. Increasing backlogs in handling workers’
compensation claims can have implication for disability insurer costs.
As noted in
previous posts, access to diagnostic and treatment resources is critical but
the availability of qualified professionals accepted by workers’ compensation
and other insurers is limited. Restricted
access tends to drive up costs for services (such as consultation reports and
on-going therapy) and length of disability.
Final
Thoughts
Many
managers have had the experience of an employee with increasing absences. The given and recorded reasons may be
convenient (e.g., sickness, illness in family, etc.), low-hassle (sick leave,
personal business day, vacation leave) alternatives to reporting a work-related
mental injury or making a workers’ compensation or STD/LTD claim for mental
injury or disability. The motivations
are obvious. For the employer, the
process is simple and easily managed like any other brief absence. For the employee,
there is no stigma, little justification, and minimal hassle to access paid
absence. Essentially, the costs of the work-related mental injury and
disability are externalized to the worker and her family.
Many
workers who cope with work-related mental issues on their own conceal disabling
conditions under requests for sick leave and vacation time off until those
avenues are exhausted; only then is a claim for disability insurance, social insurance, or
workers’ compensation claim reluctantly filed.
The human
cost to the worker/employee, their family and the community is the same
regardless of where a claim is filed. What
may shift is the attribution of cause and funding consequences.
It is too
simplistic to say that the observed increases in workers’ compensation and
disability insurance claims for mental injury reflect a deterioration in the
mental health of the workforce or a worsening of exposure to causes such as
work pressure/volume, harassment, or bullying.
To be clear, these are factors that need to be monitored and worthy of
prevention. The consequences of removing
stigma and excessive barriers to filing disability and workers’ compensation
claims for mental injury and disability are likely revealing more of what has
been there all along.
It is also
too simplistic to say “building resilience” is the solution to the rising claim
counts. While necessary, building a more
resilient workforce is unlikely to change incidence but may well diminish
severity. More research is needed here.
The human
and social costs of mental injuries are immense and real. Dismissing mental disability as a personal
failing or weakness in the individual is a slap in the face to those
experiencing the pain and consequences of mental injuries. Fully recognizing work-related mental injuries
and disabilities is essential to building the strategies and resources for primary
prevention, early intervention, and increasing available supports for treatment.
The
detailed claims analysis from WorkSafeBC and statistics from AWCBC, SunLife, MunichRe, and SafeWork Australia
quoted in this series are a first and important step in understanding workers’
compensation and disability insurance for mental disability. Improved understanding through transparency
and more investment in research are needed to better inform our policy
decisions and foster improved outcomes.
