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COVID-19 and mental health insurance

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  • COVID-19 and mental health insurance
By Emily Abdelhamid
24 November 2020
10 min read
18

Mental health issues in the UK have been rising in recent years, even pre-COVID-19, and the number of people struggling is increasing further still with the impacts of the COVID-19 pandemic. The likelihood is that more people will suffer psychological symptoms as a result of the pandemic, than those who actually contract the virus itself.

People are struggling to cope with quarantine, social distancing, loss of contact with friends, family and colleagues, and bereavement, coupled with fear of catching the virus and fear for the health of loved ones. These may be heightened by financial struggles, worries about job stability, loss of income, and loss of employment. To many of us, the COVID-19 pandemic was unexpected and sudden, and the circumstances we have found ourselves in this year would have been very difficult to imagine 12 months ago. Whilst some people’s emotional response to the pandemic will stabilise as they adjust, others will continue to struggle.

The full impact of the COVID-19 pandemic is yet to be realised, however what is clear is the huge psychological impact it is having on people.

The impact of COVID-19 on mental health in the UK

According to mental health charity Mind, 1 in 4 people will experience a mental health problem of some kind each year in England, and 1 in 6 report experiencing a common mental health problem such as anxiety and depression in any given week in England. The Charity estimates that these numbers are probably even higher than this.

Further, the overall number of people reporting mental health problems has been rising in recent years, and studies conducted by The Lancet Psychiatry have shown an upward trend in increased population mental distress in the UK since 2014. The results of The Lancet Psychiatry’s survey, carried out at the end of April 2020 during the UK lockdown, showed that the increase in population mental distress was not simply a continuation of previous upward trends when compared with results obtained pre-COVID-19 pandemic, but the rate of increase has surged and the average score was higher than would have been expected had the trajectories from 2014–19 continued. That increase is expected to largely be attributable to the COVID-19 pandemic.

Many people will be experiencing mental health problems for the first time, and those with pre-existing mental health conditions may experience new or exacerbated symptoms as a result of the COVID-19 pandemic. A survey conducted by Rethink Mental Illness during the first UK lockdown found that 79% of people with pre-existing mental illness reported that their mental health had got worse or much worse as a result of the pandemic and the measures to contain it. Over 2.3 million people visited rethink.org for advice and information in the six months after Prime Minister Boris Johnson announced the UK lockdown, and demand for advice and information doubled compared to the six-month period that preceded the pandemic.

Quarantine and social distancing measures mean that there is less opportunity to be with family and friends and get the social support which is essential for good mental wellbeing. People who are in quarantine or spending significantly more time confined within their homes may begin to suffer from anxiety, boredom, frustration, irritability, insomnia or depression. Some people may turn to increased levels of alcohol and drug use, or substance abuse.

Whilst working from home has its benefits, it can be very isolating, there may be loss of stimulation provided by the workplace environment, loss of structure and the days may blur together, and with this it may become more difficult for some to ‘switch off’ from work and maintain a healthy work-life balance. Front-line health and care workers may also develop psychological disorders arising out of their work, such as stress, anxiety, depression and post-traumatic stress disorder.

These mental health symptoms could persist after any quarantine or lockdown is lifted. It could take some people years to recover. Indeed the long-term effects from pandemics and economic recessions on mental health are known from past experiences, which includes increased suicide rates and hospital admissions for mental illness. Demand for access to mental health services is only likely to increase in the current pandemic climate and its aftermath.

Health and safety in the workplace

Employers are adapting to the new ‘normal’ working environment with social distancing restrictions or remote working, and will be well aware of their various duties to maintain a safe working environment for their employees, under the Health and Safety at Work etc. Act 1974 and the ‘Six-Pack’ Regulations. Neglect to provide this could lead to increased employers’ liability claims following incidents and stress at work.

Employers should ensure they have appropriate procedures and risk assessments in place. If employers have not done so already, we recommend updating risk assessments in light of the new risks that COVID-19 and remote working may bring. This includes carrying out desktop workstation assessments, to ensure employees have the equipment, resources and training they need to work from home safely, to assess and then reduce as far as reasonably practicable the risks of any physical or mental injuries occurring. Employers should encourage employees to report any health and safety concerns or issues.

How can employers support employees?

Some employees will be more vulnerable in this pandemic depending on any pre-existing mental health or physical conditions, or due to family, home or other circumstances. Employers may or may not know about these, as some people may not feel able to disclose. Having open lines of communications is important in enabling employees to feel able to speak to their employer freely about any conditions.

With a largely remote workforce employers could maintain engagement by: creating a buddy support system or peer groups; ensuring employees have regular supervision video calls with managers continuing to monitor workloads and provide feedback; collaborating in ‘real time’ by sharing a screen with a trainee, apprentice or junior when working on a task they might learn from; continuing team and departmental meetings online; and creating virtual Q&A sessions for employees, with separate sessions for trainees and apprentices. Additionally employers could encourage social connection through virtual coffees, post-work virtual quizzes and virtual drinks.

Furlough may change workload and types of tasks for some employees. Where members of staff are furloughed, employers should ensure that any employees who are continuing to work have a manageable workload and appropriate training for any new tasks they may undertake. Furloughed employees should return to a manageable workload.

It is good practice for employers to encourage mental health and wellbeing, support employees to open up about mental health but be mindful that not everybody feels able to do so. As an additional resource, some employers offer access to an independent support helpline via an Employee Assistance Programme. This is a great advantage however, is not a replacement for actively supporting employees in the workplace. If an employer is aware of an employee’s disclosed mental health condition or history, it could be good practice for HR or line managers to discuss with the employee how they are and how employers can support them individually, being mindful that some employees may be more vulnerable depending on their individual condition or trigger.

Insurance and mental health

With increased numbers of people experiencing mental health problems post-COVID-19, it follows that more people will require professional help from mental health services, whether that is due to the development of mental health problems for the first time, previous mental health problems which have been re-triggered, or maybe existing problems have been exacerbated. With this there will be an increase in mental health related insurance claims, whether for treatment, for incapacity and loss of wages due to sickness leave from work for mental health, or tragically, due to suicide.

Insurance can varying levels of cover for mental health conditions or associated losses, including critical illness insurance, private health insurance, life insurance, income protection insurance and travel insurance. With the rise in mental health conditions, the relationship between insurance and mental health is becoming under increasing scrutiny and increasing disputes being referred to the Financial Ombudsman. Individuals have been rejected for life insurance cover on the grounds of mental health, where they have previously seen a counsellor for a specific and isolated event. Yet insurers have refused claims made under critical illness policies for mental health related reasons, because the threshold for cover was not sufficiently met. The requisite threshold or circumstance to trigger cover for mental health related reasons is often not set out within insurance policies which can cause confusion. Should this be reaching out for professional psychological help such as counselling or CBT, formal diagnosis by a GP or psychiatrist, being prescribed medication, being signed off work due to mental health factors, or is the threshold so high as to require being sectioned under the Mental Health Act 1983. The threshold for pre-existing mental health conditions may be relatively low when considering whether to provide cover and in setting a premium, and yet the threshold is considerably higher when responding to a claim. We have seen the change from suicide being completely excluded to becoming a time-limited exclusion in many life insurance policies, in recognition that suicide is a peril to be insured. Will COVID-19 accelerate other changes to insurance cover for mental health? Insurers will pay out on valid claims, but their policies need more clarity when it comes to mental health.

It is common for insurers to require immediate notification of a circumstance which may give rise to a claim under a policy. Failure to notify in accordance with the policy could lead to insurers avoiding a claim. However the onset and development of mental health conditions are not so evident as physical conditions which may well blur the line for notification to insurers. A person may suffer from mental health symptoms, and exhibit symptoms and behaviours, long before reaching a tipping point and/or receiving a formal diagnosis.

Post COVID-19, in a hardening insurance market, many insurers are altering the terms of some of their insurance products, or exclude or suspend coverage in certain circumstances. For example, many insurers are not currently offering income protection insurance covering redundancies, due to the anticipated job losses in this pandemic. Insurers will need to be careful to draw consumers’ attention to the policy coverage and ensure that exclusions are clearly communicated, in particular relating to mental health. The Association of British Insurers recommends that any mental health exclusions in particular are prominent, where an insurance policy is for an individual consumer. Policy wordings will need to be clear as to any cover for mental health, the threshold required to trigger cover, the extent of cover, and any exclusions.

Insurers considering claims under existing policies will need to be conscious of those who may already have pre-existing mental health issues and the extent of policy coverage. In addition, the Financial Conduct Authority has reminded insurers that increased numbers of insurance consumers will be in a vulnerable position as a result of the COVID-19 pandemic. Insurers are expected to be aware of these circumstances and treat those consumers accordingly. Vulnerable insurance consumers include those with poor mental or physical health, low financial or emotional resilience, life events such as bereavement or divorce, and low capability, including low financial capability and poor digital, language and cognitive skills. The Financial Conduct Authority has been proactive in relation to the multitude of claims under business interruption insurance policies post-COVID-19. The Financial Conduct Authority is obviously mindful of the issues with insurance and mental health, and insurers will be aware that the Financial Conduct Authority may take further steps in ensuring positive change in this area.

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