With increasing mental illness awareness and pending legislation, what can we learn from our Canadian peers to better prepare?

You may have heard… the ice bucket challenge has returned. This time, instead of the ALS Association, the benefactor is the MIND club (Mental Illness Needs Discussion) at the University of South Carolina (USC).

According to a MIND representative, the campaign set out in March to earn a modest amount of $500 (anticipating it would remain confined to the USC school campus), with the objective of normalizing conversations about mental health.¹ By the end of April, funds raised surpassed $350,000, and the campaign is still going strong.²

Increased awareness and broadening treatments for mental illnesses are certainly a step in the right direction for our society and, as disability insurers are aware, increased awareness has the potential to lead to a rise in mental health related claims – which carriers must prepare for.

In this article, we share highlights from Mental Health Illness: DI Pricing and Experience, delivered at our recent IDI Client Summit by Kerin Moreton, Vice President NA Claims, Munich Re North America Life, and Jim Filmore, VP & Actuary, Group & Living Benefits, Munich Re Life US. In the session, Kerin shared cautionary tales about Canada’s history with disability claims and discussed strategies with Jim to avert similar outcomes in the U.S. market.

While it doesn’t take a broad media campaign to increase public awareness, it certainly helps. Just ask the top disability insurers in Canada.

In 2011, shortly after the Vancouver Winter Olympics, Bell Canada (a large Canadian telecommunications company) launched “Bell Let’s Talk”, a mental illness awareness campaign featuring Clara Hughes, one of the country’s most decorated athletes. On the first day of the campaign, May 3^rd, Bell Canada donated five cents to mental health related initiatives for every cell call, text, or status tweet using the Let’s Talk hashtag, and for every social media share of the Let’s Talk website.³ (This element now occurs on the third Wednesday of each January; however, the awareness campaign remains active throughout the year.)

According to Kerin, these efforts went viral “in every direction, in ways no one imagined.” This was a wonderful success for mental illness awareness in Canada; however, it resulted in a trickle and then a wave of IDI and Group mental illness claims that many were not prepared for including healthcare systems, primary care physicians, psychiatrists and therapists, and disability carriers.

In a 2015 Munich Re Canada Industry Survey of over 600 disability claim assessors and a follow-up 2019 Survey of Disability Claim Leaders, responders confirmed what had been heard anecdotally - disability claims departments were unprepared to handle the added claim volumes from mental illness cases; claim specialists could not find timely treatments due to a lack of treatment provider availability, and they were untrained to speak with claimants with complex mental illness. This led to disability case manager burnout and claim termination delays.⁴ To complicate issues further, benefit periods for mental illness claims in Canada have no limitation, leading to much higher risk for carriers. Additionally, the rapid increase in mental illness claim volume led to pricing challenges at renewal time due to a lack of credible claim experience.

With legislation pending that could remove benefit period limits for mental illness claims in the United States, carriers should now be considering ways to mitigate the increased risk that comes with augmented mental illness awareness.⁵

Kerin and Jim discussed a handful of considerations:

• Underwriting: When drafting underwriting questions, consider including more detailed mental health and medication questions.
• Product design: Consider including language that ties benefits to therapy, treatment, and medication compliance, and be clear about the impact of second jobs or “side hustles” on claimants. (It should be noted that policy changes can be made more nimbly in Canada, due to differences in regulatory structure.)
• Elimination periods: Insurers should be aware that products with shorter elimination periods carry a greater risk of mental illness claims.
• Claim staff training: Train staff to provide supportive and respectful communication when interacting with individuals living with mental illness. More frequent follow-ups and tracking of medication compliance are required, as this can help avoid longer-than-necessary claim durations. Train staff on methods to confirm if activities while on a mental illness claim are consistent with the limitations reported. 
• Claimant understanding: Figure out how to identify and work with people who are non-compliant with treatment or who are hesitant to seek care from medical professionals. Specialized vendor partners can assist with this as well as training medical teams to support claim specialists and claimants.
• Side hustle identification: It is not uncommon for claimants to have hobbies or paid work apart from their main employer, e.g., ridesharing services or other gig economy work. Policy language should clearly state that any form of paid service is offset against the benefit payable or not allowed while on claim.
  (For more on this topic, see our recent article, Validating financials to support disability management and help combat fraud.)
• Pricing adjustment: Where necessary, adjust pricing models to account for lengthy claim periods and higher treatment/rehabilitation expenses associated with mental illness claims.
• Environmental and generational considerations: Insurers must recognize that today’s youth are tomorrow’s policyholders, and they may bring with them never-before-seen and unexpected conditions (such as gaming addiction, seen in Canada)^.6
• Communication strategies: Develop targeted communication plans that encourage claimants to remain in treatment. One form of messaging could be to showcase how resuming work can lead to enhanced retirement savings opportunities.

Collective efforts to help those experiencing mental illness seek and obtain treatment strengthen our society as a whole. Disability carriers have the added responsibility to maintain their financial stability and keep the promises made to their policyholders. Considering ways to protect this important coverage ensures that carriers will continue to be able to provide benefits regardless of pending legislation.