Why mental health support in group plans is key to employee retention and productivity
After decades of being in the shadows, mental health in the workplace is finally getting the attention it always deserved. It is no longer a side conversation; rather, it’s emerging as a critical evaluation, engagement, and retention tool in today’s corporate spaces. Especially for companies grappling with challenges like rising attrition or high burnout rates, one of the most tangible ways to support employee well-being is through group health plans that meaningfully cover mental health services. Beyond creating a compassionate culture, it also translates into better retention and productivity, which in turn, directly influences the overall business stability.
While the conversation around mental health continues to grow louder, the shift from awareness to action is still in progress. Here’s breaking down how mental health support in group health plans can reduce friction in access, normalise asking for help, and reinforce the trust between employer and employee.
How mental health fits into the retention equation
Maslow’s hierarchy of needs or Maslow’s pyramid is a staple in management books. The theory lays out a pyramid of human needs, starting with basics like safety and moving up to belonging, esteem, and ultimately, purpose. For the longest time, basics like remuneration and job security remained the deciding factors behind employee retention. But with growing awareness, that’s no longer the case. Today, employee retention hinges not solely on compensation, but on a broader sense of value and support, particularly in a post-pandemic world where burnout and stress are prevalent.
Access to quality mental health care through employer-sponsored insurance can serve as a differentiator in a competitive talent market. It shows commitment to employee wellbeing beyond surface-level initiatives. According to a Deloitte India report, poor mental health costs Indian employers an estimated $14 billion annually in absenteeism, presenteeism and attrition. When mental health coverage is integrated into group plans, it removes key barriers like stigma, cost and access which often prevent employees from seeking help.
For high-growth sectors like tech, BFSI, and professional services, where talent churn is a known challenge, retaining even a fraction of employees by supporting mental health more effectively can offset costs significantly. Embedding support in group health insurance plans hits the dual goal of consistency and scale.
What are the structural barriers to implementation?
In a tight labor market, and with mental health challenges rising across demographics, ground level implementation is not an easy road. Despite the upside, offering comprehensive mental health coverage isn't without hurdles. Traditional insurance plans often focus on hospitalisation, often leaving behind outpatient services, where most mental health treatment occurs.
Employers also face challenges with unpredictable utilisation rates, leading to cost uncertainties when expanding benefits. This becomes especially complex in large, diverse organisations where needs vary across geographies and employee segments.
Employee Assistance Programs (EAPs), a common inclusion in group policies, are often underused or have a narrow scope. They may offer a limited number of sessions or restrict provider options, failing to meet the varied and long-term nature of mental health needs. Additionally, measuring impact remains difficult. Unlike physical illness, the outcomes of mental health support are more subjective and long-term, making it harder for HR teams to quantify return on investment.
Building a roadmap that works
Given these challenges, organisations need to design benefits that truly reflect employee needs. Going beyond compliance-led coverage or token Employee Assistance Programmes, the offerings should be grounded in real-world insights. This should be based on utilisation data, tangible employee feedback and evolving expectations. This approach allows companies to revisit and renegotiate their coverage to ensure it serves the people who need it most.
Secondly, it’s important to go beyond the one-size-fits-all approach. Mental health challenges vary widely in nature, and so should the support. Employees must be able to access the kind of help they truly need, not just what happens to be on offer. That means creating confidential, flexible pathways to access care, rather than fitting into the same mould.
That said, group plans are evolving. More organisations are now partnering with specialised platforms that offer a wider spectrum of mental health services - right from therapy and counselling to mindfulness and crisis support. Larger employers are beginning to negotiate for benefits like unlimited or subsidised sessions, inclusion of therapy in annual checkups or even 24*7 helplines staffed by trained professionals. This shift is being enabled, in part, by rising demand. Some companies are also experimenting with co-pay structures to balance cost while maintaining access.
Employer-sponsored plans have the potential to create outsized impact. With scale on their side, employers can negotiate more value-added features. The difference is not just financial, it’s also operational. Employees are more aware of mental health support, and there’s greater willingness to use it if it’s easily accessible and confidential. It helps make mental well-being a part of corporate culture.