Does Workers’ Compensation Insurance Cover Mental Health Claims?

Workers compensation insurance is one of the most important types of insurance for a business to have. Not only is it legally mandated in most states, but it’s essential protection for your business in the event of an on-the-job injury.

But while most businesses know enough to cover their liability, not all are familiar with the different types of claims employees can make. Physical injuries and occupational illnesses are the most common claim types, but it’s becoming increasingly common for employees to make claims related to mental health. Here’s everything you need to know to ensure your business is properly covered for your employees’ mental health.

What Field Are You In?

Not all businesses will have the same liability for mental health claims, based on the intensity and mental stress associated with the job. Those who work long hours and may face routine danger, such as EMTs, firefighters, police officers, and workers dealing with hazardous materials, are the most likely to need comprehensive mental health coverage.

It’s also common for employers to cover different employees under different policies in this area. If you have hands-on employees who are more likely to encounter stressful situations, they are more likely to require this coverage. Managers and technical support, who play a more behind-the-scenes role, may not need the same support.

While it’s easy to assume that a comparatively low-danger field won’t need mental health coverage, this can be a costly mistake. Any field can have a particularly stressful day that would lead employees to seek mental health support. Additionally, an incident that leads to a workers’ compensation case for physical injury could lead to mental health claims from the person injured and those who witness the incident.

What State Are You In?

Workers’ compensation laws vary by state, and so do related issues like mental health support. While some states have specific regulations about what employers and employees need to do for coverage, others take it case by case. The best way to cover yourself is to study your state and local laws before purchasing your insurance package.

One of the states with the most straightforward path regarding mental health claims in workers’ compensation is California, where employees need to be working at the business for at least six months before making a claim. A doctor must assess claims before they can be compensated, and other factors play in before the workers’ compensation kicks in.

What Are the Circumstances?

There is more oversight on mental health claims than other workers’ compensation issues, and there are specific criteria the claim will have to meet before it’s covered. If there is an inciting incident, it must be related to something that happened on the job. Additionally, the work conditions that led to the claim have to be unusually challenging or stressful, leading to more than typical day-to-day stress.

The most common claims made under mental health workers’ comp include anxiety, depression, stress, and post-traumatic stress disorder related to a specific incident at work. Before it offers a compensation package, the insurance company will want to see a clear link between the issue and the job to ensure there is no other cause.

While the claim will need to be directly related to work, workers’ comp is no-fault insurance—even if the claim is covered, it’s not an admission that you as an employer did anything wrong.

Physical-mental vs. Mental-mental Claims

There are two main categories of mental health claims. The first type is the physical-mental claim, in which a physical injury leads to longer-term mental health consequences. This can include an employee who becomes depressed while off work due to an injury. It also applies to anxiety about performing a task or working with a machine after being injured under those circumstances.

Mental-mental claims are more complicated, as both the source and symptoms of the claim are mental. If an employee is undergoing regular heightened stress due to circumstances such as extended work hours, witnessing trauma, or workplace harassment, the mental health issues they suffer as a result may be covered under the same policy.

Being Prepared

You never know when an employee will make a mental health claim, so you want to make sure your workers’ compensation insurance covers you comprehensively. While most states require you to have workers’ comp insurance to run a business, this is an opportunity to protect your business from unexpected liabilities that could throw your business plan off entirely.

Plan for Invisible Claims

Mental health issues in the workplace aren’t always obvious. That means you could easily be taken by surprise when an employee makes a claim. Make sure you’re covered and give your business the protection you need for long-term security.