Mental health disability claims require a better employer response 

Looking back over the last couple of decades, it is hard to overstate how much access to mental health care has improved. In the past, care was harder to find; fewer therapists and counselors were available, and many people felt stigma when seeking treatment. Employee Assistance Programs typically provided access to only a few therapy sessions, and employees could wait weeks for an appointment. As a result, many people continued to struggle without timely treatment.

By contrast, the last few years have brought a major expansion in mental health support. EAPs now offer a broader range of services, including online content, cognitive behavioral therapy, coaching, support groups and counseling. In 2002, just 15% of American adults sought treatment with a therapist. By 2024, nearly 25% saw a therapist at least once. There has been a real culture change around mental health treatment in the US and around the world.

Given this expansion in access and support, it may not be surprising that mental health disability and leave claims are increasing. Based on data shared with Mercer by a leading disability insurer, the incidence rate of mental health Short-Term Disability claims for their employer clients is up 41% compared to pre-pandemic levels. From 2023 to 2025 alone, mental health STD claims increased by 21% — and, across certain white-collar sectors such as finance and tech, by almost 60%. That same insurer reports that until 2023, mental health claims were the fifth or sixth most common diagnosis for Long-Term Disability claims. For the first half of 2026, mental health issues are the leading LTD diagnosis.

The growth in mental health disability claims is not just a cost and productivity issue for employers. Mental health disability claims are creating unique challenges for employers.

What is driving the growth in mental health disability and leave claims?

It's important to put the current growth in mental health disability claims in perspective. As stigma around mental health continues to ease, more employees are willing to come forward and seek support, especially younger employees in white-collar industries. As employees become more forthcoming about mental health issues, disability and leave administrators may also be getting better at classifying these claims. Better access to care, including telehealth and specialized provider networks, may also be helping people enter treatment sooner. This is a good thing.

Expanded access to care and leave entitlements may also be contributing to the increase. While employer STD plans often require detailed medical information to support a claim, legal entitlements like FMLA and state paid medical leave benefits may require little more than certification from a medical professional. Employees may also access care from online providers that offer medical certification to support an FMLA claim for a nominal fee — with a money-back guarantee if the employee’s claim is not approved.

Still, employers should not assume that rising mental health disability claims reflect only greater awareness, better access to care or improved classification. Working conditions may also be contributing. Understaffing, excessive workloads, poor management and unreasonable goals can all fuel the growth in mental health leaves. In fact, one Mercer survey of workers found that a majority of employees are at risk for burnout; in another, 54% of employees say that work pressures are the main reason for burnout. Behavioral health providers frequently see a toxic work environment as a key contributor to employee mental health problems and can include time off from work as part of the treatment plan.

What unique issues do mental health disability claims pose for employers?

Mental health disability claims are harder to manage than other diagnoses because the clinical picture is rarely straightforward. Diagnosis typically relies on observation rather than clear test results, and symptoms can change over time. An employee may improve for a period, then relapse. Employees may also report symptoms differently depending on how comfortable they feel being candid, given concerns about stigma, discrimination, workplace culture or job performance. It may also take time for the treating provider to find the right medication protocol to support recovery.

To make matters worse, the disability and leave claim process itself was not designed for mental health claims. Many short-term disability plans require supporting medical information within 14 days of the start of a claim. For mental health claims, that window is often too short. Employees may still be trying to find the right provider or secure an appointment. Some may need to see multiple providers before finding one who can provide effective therapy. If medication is part of treatment, getting an appointment with a psychiatrist and finding the right drug protocol before the 14-day deadline may not be possible.

Even when treatment begins, employees may still struggle to gather the information needed to keep the claim moving. Some providers are slow to complete forms or may not be willing to do so. The information needed to approve a mental health disability claim may also vary by vendor, making the process harder for employees and treating providers to navigate.

When documentation is delayed or incomplete, the result is often disruption for both employees and employers. Claims may be denied because clinical support arrives after the deadline, then approved later when the missing information is received. In the meantime, employees may remain out of work and face interruptions in pay. Employers may temporarily apply PTO to cover the absence, then have to restore that time if the claim is later approved. Late claim reversals can also force employers to revisit leave, pay and staffing decisions. For employees, that uncertainty can add anxiety at a time when recovery should be their top priority.

Employees and their treating providers are also starting to understand how difficult it can be to get a disability or leave claim approved in a timely manner, and some are responding by reporting the claim before the employee stops working. Early reporting is common for maternity claims or scheduled surgeries when the future date of disability is known. While reporting a future leave before the last day worked might seem odd in a mental health context, it is not uncommon; to take one Mercer client as an example, a recent analysis found that nearly half of mental health claims were reported early, on average 11 days before the employee stopped working. Is this a sign of abuse? Or is it a sign that employees with significant mental health issues understand how long the claim process can take and are simply starting it early?

What can employers do about the growth in mental health claims?

Mental health disability and leave claims are complicated and will likely require employers to implement a suite of solutions. Here are four actions to consider:

• Understand the current state. In our experience, few employers are immune from the growth in mental health claims. Employers should dig into their disability and leave experience to understand the impact mental health disability claims are having. What types of mental health conditions are driving the growth? Are you seeing an increase in early reporting of mental health claims? How are mental health claims affecting denial and appeal rates?
• Improve the claim process. The typical disability and leave claim process was not designed with mental health claims in mind. Many STD plans require claimants to be under the care of a provider who specializes in their diagnosis. There is likely no need to confirm that claimants with a cancer diagnosis are under the care of an oncologist. But mental health claimants may be under the care of a general practitioner or another provider who is not a behavioral health specialist. Can that plan provision be enforced? If so, how will you ensure quick access to care? Is the 14-day deadline for the claimant to provide supporting medical information too short?
• Leverage existing mental health resources. EAPs capabilities have expanded dramatically over the last few years. Some EAPs can are even providing support the leave process by helping employees get evaluated by a mental health professional, fill out the necessary paperwork, and checking in with the employee while on leave to make sure they are getting the care they need. EAPs can also help the employee, the employer and the disability administrator by facilitating the return-to-work transition. Better yet, why not use these EAP services proactively to help support mental health issues to hopefully avoid the need to go on leave in the first place? The earlier employers intervene with employee mental health issues, the less the issue has a chance to grow and have a great impact.
• Recognize the impact of the work environment on mental health. Business leaders need to step back and consider how work itself may be contributing to the expansion in mental health leaves. Foundational actions to support workforce mental health include creating a sustainable work environment, allowing employees to speak up and be heard, and providing support for employees with mental health issues.

It took years for employers to find ways to address the challenges of covering mental healthcare in their medical plans. It will also take time to develop solutions for the unique issues that mental health poses to disability and leave claims — so start now to deliver better results for your business and your employees as soon as possible.