Comprehensive Mental Health Insurance Benefits:
Case Studies
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Services Administration
Center for Mental Health Services
Office of Managed Care
IV. Key Findings from Employers
Characteristics of Study Participants
While most are self-insured and therefore exempt from Federal and State mandates, all employers in this study nonetheless provide comprehensive mental health benefits. They provide the coverage voluntarily and report that they do so primarily because they
- believe that the mental health of employees is crucial to company success;
- recognize that mental health problems are common in the workforce and that early intervention and continuing treatment can address such problems effectively;
- have a "common sense" rationale that investing in the mental health needs of their employees will produce long-term savings by decreasing health care costs, increasing productivity, and reducing absenteeism; and
- understand that overall health care costs may rise when mental health benefits are restricted.
Study participants offer comprehensive mental health benefits as part of a larger corporate culture emphasizing the value of investing in employee overall wellness. This approach can be seen in the wide variety of nontraditional, non-health-related fringe benefits, such as financial incentives and work/life programs. The intent of such programs is to reduce unnecessary life stressors and to increase employee happiness and productivity. For example:
- Fannie Mae offers employee housing assistance, financial support for adoption, emergency child care services, and an elder care program providing case management and other services to parents and relatives of employees.
- Motorola has an extensive network of work/life programs designed to help employees balance the responsibilities of home and office. The company subsidizes in-home care for mildly ill children, on-site and near-site child care development centers, case management during pregnancy, free use of pagers for expectant parents, and on-site stress reduction massage therapy.
Corporate leadership can play a significant role in a decision to improve mental health benefits. In many cases, management's determination to provide comprehensive care predates any expressed need for quantitative data to support decisions to alter benefits:
- First Chicago (a predecessor of Bank One) focused much of its benefit management approach on mental health as a result of the mental health background of one of its health benefits administrators.
- At Delta, the medical director's interest in the association between depression and workplace productivity raised awareness of these issues throughout the company.
Mental Health Benefits: Design, Services, and Employee Cost-Sharing Requirements
Participating employers recognize that providing generous mental health benefits requires more than high-level services and low employee cost-sharing requirements. In addition to the specific benefits, these employers provide numerous mechanisms through which employees can access mental health care. All six employers encourage access to care through programs that fall outside of traditional services, such as:
- wellness programs;
- disease management programs;
- on-site psychiatric care;
- rapid-response teams for crisis intervention;
- employee incentives for participating in preventive health care programs;
- supervisor education and training to help detect mental health problems; and
- opportunities for employees to help shape provider networks.
Recognizing that cost-sharing can constitute a barrier to accessing treatments, many employers have developed cost-sharing structures that encourage employees to access mental health care, such as by eliminating employee out-of-pocket expenses for initial visits or for EAP use.
All six employers invest significant resources in EAPs--programs that provide a wide range of services under the broad goal of increasing access to care. The range of these services varies by company. Some employers have on-site EAPs, providing free counseling in the workplace, while others believe employees are more likely to use an EAP when it is located off-site.
One company, Eli Lilly, offers mental health benefits at levels that exceed parity with physical health coverage. The company's Uniform Mental Health Benefit offers lower cost-sharing requirements for mental health than physical health benefits.
While no employers offer absolute parity between physical and mental health benefits, most do use alternative mechanisms to ensure comprehensive mental health care. In general, employers encourage initial access to mental health care through free or reduced-cost initial visits, but place more limits on extended use of outpatient psychiatric benefits than on physical health care services of similar duration.
Most companies exceed parity in some areas and fail to reach it in others. Some plans offer complex cost-sharing schedules that produce more generous mental health benefits at certain utilization levels and more generous physical health coverage at others. For example, a Bank One employee pays lower average out-of-pocket costs for mental health care than for physical health care if using fewer than 14 sessions a year; additional use produces average mental health copayments greater than the $15 physical health copayment.
Several employers provide services along a continuum of care, offering benefits that extend beyond traditional inpatient and outpatient treatments. For example, Eli Lilly's Uniform Mental Health Benefit includes three graduated alternatives for outpatient care, ranging from nonintensive diagnostic and testing services to a partial inpatient program.
In making decisions about benefit design, several employers take into account the characteristics of their particular workforce (e.g., gender, age, type of profession). As a result of its largely female population, Bank One has invested heavily in depression screening and management programs in response to women's higher incidence of depression.
All employers recognize the direct link between the well-being of an employee's family members and the mental health status of that employee. Because of this knowledge, some employers provide free EAP services to all members of an employee's household.
Many benefit managers characterize their EAP as a "gateway" to services, as opposed to a traditional "gatekeeper" limiting access to services. EAPs more often serve as a direct link to the benefit plan's network of mental health providers.
Benefit Management Approaches
All six employers manage their mental health benefits in different ways; no single formula defines the management approach necessary to provide comprehensive or innovative benefits. Companies make many benefit management decisions, including the following:
- Integrate or carve out services: In general, the employers studied do not appear to show a strong preference when distinguishing between health plans that integrate mental health services within their physical health systems and plans that subcontract with MBHOs. Companies can provide comprehensive benefits and meet other goals, including administrative simplicity, quality of care, and access to providers, through either method.
- Internal or external management: Employers tend to maintain responsibility for some or all of their mental health benefits more often than for physical health, enabling them to respond more directly to employee needs.
- Eli Lilly directly manages a uniform benefit, providing coverage for all company employees who need access to mental health services.
- Motorola partners with a vendor to operate a customized provider network that includes mental health specialists.
- Delta, Bank One, and Motorola all operate internal EAPs to promote interaction between the EAP and the benefits plan and to enable EAP personnel to understand the corporate culture.
- Single or multiple contracts: Using a single vendor enables employers to centralize benefits and simplify administration, provide consistent benefits to all employees, and leverage their full purchasing power.
- National or regional design: As a result of the desire to operate fewer contracts, employers face pressures to manage their mental health benefits on a national basis. Some employers resist the trend toward nationalized benefits by retaining regional contracts. A regional approach (e.g., the approach used by Company X) provides closer interaction and the ability to forge partnerships with vendors, enhances knowledge of and ability to respond specifically to a particular region's employee population, and ensures vendor familiarity with the quality of local providers. All six companies exhibit this desire to limit the number of contracts; many companies consolidate benefits nationally.
While employers use a wide variety of approaches, all take an active role in directly managing both plans and vendors. Companies evaluate their plan options regularly and work to improve inadequacies.
Employers recognize the need to communicate their benefits approach to insurers, EAP vendors, and providers. In developing its customized provider network, Motorola found that ensuring that providers understand the company's approach to be the greatest challenge.
Several companies make a significant investment in relationships with vendors. For example, Company X has partnered with the same vendor since 1997, facilitating creation of an integrated co-case management program for members who may benefit from treating potential comorbid physical and mental health conditions.
Employee Satisfaction/Performance Data
The majority of employers do not use performance data to assess the relationship between access to mental health services and employee productivity and health care costs. Therefore, with the exception of Bank One, employer decisions to provide comprehensive mental health benefits have been independent of such data.
Employers require vendors to adhere to performance standards that are most often developed by external organizations, such as the NCQA, purchasing groups, and business groups on health. Instead of creating customized measures, employers use these standardized data to monitor vendors and create HMO report cards. Unfortunately, such industry standard performance measures often do not capture mental-health-specific information.
Employee feedback plays a significant role in shaping the benefit design and influencing policies at all of the companies:
- In addition to assessing employee satisfaction and improving areas of poor performance, most companies are willing to change policies based on employee complaints. Thus, when a number of employees insisted that a particular drug should be included on its managed care plan's formulary, Delta required the vendor to add the medication.
- Several companies rely heavily on employee input, through focus groups and direct interviews, in creating benefits plans. Employee dissatisfaction with managed care plans, for example, served as a catalyst for Motorola's decision to add an option for a customized preferred provider network.
Specific Examples of Best Practices
Comprehensive and innovative mental health benefits take a variety of forms; no one approach provides a complete formula necessary for providing such benefits. Instead, the six employers studied use a range of "best practices" in mental health benefit design, management, and data monitoring.
Bank One: Tracking the Connection Between Claims Data and Treatment Interventions
Bank One is one of the few employers in the Nation that tracks the effects of mental health spending. Through an advanced computer information system, the company monitors disability and absenteeism. It has found a direct link between increased mental health spending and decreased employee health problems.
Delta Air Lines: Tailoring Benefits to Meet Specific Needs of Employee Population
As a member of the airline industry, Delta faces a variety of special challenges. Federal regulations ground pilots taking psychoactive medications, including antidepressants; this often makes pilots fearful of seeking mental health treatment. Delta recognizes the special needs of this unique population and has attempted to structure its benefits plan accordingly.
Eli Lilly: Managing Mental Health Benefits Internally to Ensure Access to Care
To improve employee mental health care, Eli Lilly terminated its contract with a behavioral health carve-out plan and began to provide all mental health coverage through an internally managed indemnity plan. The Uniform Mental Health Benefit encourages utilization through high levels of coverage and no deductibles.
Fannie Mae: Fostering Mental Health Through Wellness Programs and On-Site Care
Fannie Mae offers a wide variety of physical and mental health work-site wellness programs designed to help employees balance work and home life. The company provides on-site psychiatric care, including a variety of consultative and administrative services such as case management for employees receiving treatment, advocacy on behalf of employees enrolled in managed care, and general advice about the company's benefits plan.
Motorola: Customizing a Provider Network Based on Employee Preferences
To ensure that employees requiring mental health treatment receive the highest possible quality of care, Motorola has customized a network of mental health specialists based on employee preference and past claims data.
Company X: Using Competitive Bidding Under a Regional System
Company X's expertise in competing for Federal contracts through bidding has helped it select and manage its own subcontractors. Company X modified its Federal bidding practices to develop a competitive bidding system for vendors, enabling the company to select the best mental health care vendor in each region.
Challenges Remaining
The pervasiveness of corporate mergers and acquisitions presents numerous challenges to administering and providing employees with mental health benefits, including the following:
- consolidating benefits so that employees have access to uniform benefits;
- becoming familiar with the needs of new employee populations;
- maintaining leadership despite the loss and turnover of executives;
- integrating historical health and claims data from component companies; and
- decreasing the number of health care vendors.
Managing multiple contracts, as well as ensuring vendors share the company's approach to mental health care, remains a key challenge. For example, Bank One, which holds contracts with more than 50 HMOs, is currently consolidating its HMO choices. Employers also face challenges in communicating the corporate philosophy that underlies the mental health benefits, as insurers frequently focus on controlling costs. In addition to managing multiple vendors, employers must integrate data from a variety of vendor database systems that may not be compatible with the company's system.
Mental health education remains critical, since many employees still fear the stigma of mental illness and its potential adverse effects on employment. Such difficulties are particularly acute when a diagnosed mental health condition can significantly affect an employee's job status, such as the Federal Aviation Administration requirement grounding any airline pilot taking psychoactive medications.
Increasing regulatory and financial pressures on the managed care industry also are taking a toll on employers. Facing cost pressures from purchasers, MCOs may reduce service levels and increase health insurance premiums to remain financially viable. Furthermore, employers fear that mandated parity legislation could require a standardized approach that will limit their development of innovative programs customized to employee needs.
The experiences described by participants in these case studies (see Appendix C) can help guide other companies that are preparing to redesign their benefits to meet parity regulations. The cases also illustrate examples of best practices for corporations engaged in efforts to improve employee access to mental health care.
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