Mitigating Mental Health-Related EPLI Claims

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Posted by: CMR January 17, 2024 No Comments

During the past few years, mental health issues such as anxiety, depression and post-traumatic stress disorder have been driving more Americans with Disabilities Act charges, according to data from the Equal Employment Opportunity Commission (EEOC).

In 2022, around 11% of ADA charges were related to anxiety disorders. This is up from 7.6% five years earlier. PTSD-related charges grew from 3.9% of total ADA charges filed in 2017 to 6% in 2022, while anxiety-related charges also grew.

These ADA charges can trigger claims against an employment practice liability insurance (EPLI) policy, which helps cover defense and other costs companies face when dealing with a discrimination charge, according to Chris Williams, employment practices liability product manager for Travelers Insurance. Some EPLI policies might include PR costs in certain situations, such as an adverse verdict.

Williams tells that a host of factors is leading to more mental health-related ADA claims.

Based on data from the National Alliance on Mental Illness, more than 1-in-5 U.S. adults live with a mental illness, which Williams points out makes for a sizeable pool of potential claimants.

Further, the Occupational Health and Safety Administration reported that more than 80% of workers have experienced workplace stress.

“Those stresses don’t always have a negative impact on mental health, but they can and sometimes they can exacerbate mental health issues,” Williams says.

In addition, there is more general awareness of mental health issues and employees are more aware of rights, he explains.

Recognizing accommodation requests

While there is more recognition for mental health issues today, some small businesses — particularly those without an HR department — might not be aware the ADA covers these types of disabilities.

Williams notes that an employee’s request for accommodations based on a psychiatric disability might not be as easily recognized by employers as an accommodation request for a physical disability.

One of the most common accommodations that can be overlooked is a request to work from home, which can put employers in an awkward position.

“Most companies let employees work from home during the pandemic, so it is sometimes difficult for the employer to say that presents a new hardship to allow one employee to work from home when they had a whole bunch of employees working from home during the pandemic,” Williams explains.

Other more common accommodation requests include asking for a quiet work environment, additional breaks and the presence of a service animal.

Reassignment away from job duties that aggravate a mental health issue is also a request that companies should consider accommodating when reasonable. Williams points to a recent EEOC case involving a call center employee who was reassigned to a position that required interacting with irate bank customers. These interactions worsened the worker’s anxiety issues.

“The bank refused to reassign the employee despite his anxiety, um, and the bank ultimately agreed to pay the EEOC and the former employer $100,000 to resolve the claim,” Williams says.

Reducing mental health EPLI risks

Williams says the first step to mitigating the chances of facing an ADA charge based on a mental health disability is recognizing the presence of these types of issues in the workplace.

Having a written policy in place that adheres to the ADA, the Family Medical Leave Act and any state law equivalents is the next critical step, he says. These policies should review how employees can request accommodations for mental health-related disabilities.

“It is also important that supervisors and managers be trained on how to recognize those requests,” Williams says. “We unfortunately see some complaints where the HR department has a policy in place, but the front line supervisor is not aware of their obligations under the law because they haven’t been fully trained and then they deny the request outright.”

As mental health-related ADA charges increase, it becomes even more important for insurance agents and brokers to review these issues with clients and discuss the protection EPLI policies offer, Williams says.

“Making sure employers are cognizant of the issue is the first thing; the second is how to address it,” he says. “When you have an employee with one of these issues, it should be an interactive process where the employer sits down with the employee and they try to work through an arrangement that is satisfactory to everybody.”

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Article Written By: Steve Hallo 

Author: CMR