Mind over matter: for small business, mental health insurance is as serious as a heart attack

Entrepreneur, Sept, 1996 by Janean Chun

From taboo topic to front-page news, mental health has aroused a round of compelling health-care debates. When an amendment seeking parity in insurance coverage for mental illness first hit Congress in April, the issue became personal, as senators testified of their families' experiences with mental illness. That passion is now hitting the small-business arena. where arguments for and against are just as heated.

Proponents of the bill, who believe mental illness can be just as damaging to a business as physical ailments, seek to eliminate discrepancies in copayments and treatment limits. "If an employee showed up with cancer, you wouldn't argue about whether he should receive care," argues Al Guida, vice president of government affairs with the National Mental Health Association.

John Galles, president of National Small Business United (NSBU), agrees mental health coverage is important; however, he doesn't agree the burden should be placed on employers. "We encourage small businesses to provide coverage, but we hold that it is primarily an individual responsibility rather than a corporate responsibility to procure mental health coverage," says Galles.

Just what is behind employers' reluctance to provide coverage? Guida, who was appalled to hear a member of the small-business community compare schizophrenia to "having a bad day" or "just being unhappy," says, "There is still certainly an enormous amount of fear and shame associated with mental disorders, which influences the mental health benefits offered by employers today."

Cost is another issue--some say adding mental-health insurance could actually decrease care in general. A figure commonly bandied about is that the mandate would increase employers' insurance costs by up to 11 percent. The Congressional Budget Office predicts another alarming possible result: In a worst-case scenario, as many as 800,000 workers and dependents could lose coverage altogether. "Every time you require an employer to add coverage, it usually reduces the number of employers who can afford the coverage," says Galles.

However, Guida says the Congressional Budget Office found that employer-paid premiums would rise not 11 percent but 1.6 percent. "I think part of the problem is there's a focus among employers on the upfront cost of mental health services," says Guida. "But [that doesn't] consider the back-end costs."

Guida cites a Massachusetts Institute of Technology study showing that clinical depression alone costs employers $23.8 billion per year in lost productivity and absenteeism. "It makes economic sense to provide employees with the services to get them back on the job," he says.

While the debate rages, the bill sits before a conference committee. Galles guesses that "with the limited amount of time left in this legislative session, there will be no resolution this year."

Ideally, the matter will be worked out even before Congressional action is taken. "I would like to see small businesses given the opportunity to collectively purchase health care, including mental-health benefits, without any federal- or state-mandated requirements," Galles says.

Even if the amendment is stalled or defeated, Guida says it has helped increase awareness. "We recognize we have a very serious problem," says Guida. "And no matter what happens with this legislation, many of us are committed to [work] within the business community to see if we can straighten out these misunderstandings and, if necessary, pursue this objective through private means."