Mental Health Benefits for Employees: What Employers Need to Know

Short answer: most employees get mental health care through three benefits: the behavioral health coverage inside the group medical plan, an employee assistance program (EAP), and disability insurance when a condition keeps them from working. Federal parity law requires a group plan that covers mental health to cover it on terms no more restrictive than medical care. The hard part is rarely the plan document. It is whether employees can find a therapist who takes the plan and know the EAP exists.

6 min read

Key takeaways

• Three benefits do most of the work: medical plan behavioral coverage, an EAP and disability insurance.
• Parity applies to group plans that cover mental health and substance use care: no tighter limits than for medical care.
• Access beats generosity. A rich benefit with no in-network therapists taking new patients does little.
• Employers never see who uses it. Claims and EAP use are confidential, and reporting comes back in aggregate only.

What counts as a mental health benefit

Benefit	What it covers	Who pays	Watch for
Group medical plan	Therapy, psychiatry, inpatient and residential care, substance use treatment, prescriptions	Employer and employee premiums, plus cost sharing	Network size, wait times, prior authorization
Employee assistance program	A few free, confidential counseling sessions per issue, plus referrals, legal and financial help	Employer, usually a small monthly fee per employee	Low awareness, session limits
Telehealth behavioral care	Video or app-based therapy and psychiatry, often faster to book	Through the medical plan or a separate vendor	Whether visits count toward the deductible
Short- and long-term disability	Income while an employee cannot work, including for mental health conditions	Employer or employee, depending on design	Many long-term disability policies limit mental health claims to 24 months
Reimbursement accounts	HSA, FSA or HRA dollars can pay therapy copays and deductibles	Employee or employer	Plan rules on eligible expenses

The rules: parity and what is required

• Mental Health Parity and Addiction Equity Act (MHPAEA). If a group health plan covers mental health or substance use care, its copays, visit limits and approval rules for that care cannot be more restrictive than those for comparable medical care. Plans must also be able to produce a written comparative analysis of those approval rules, a requirement added in 2021.
• The 2024 parity rule. A 2024 federal rule added new testing requirements. In May 2025 the Departments of Labor, Health and Human Services and the Treasury said they would not enforce its new provisions while a legal challenge proceeds. The earlier rules and the 2021 comparative analysis requirement still apply.
• Small-group plans. Fully insured plans sold to employers with 50 or fewer employees must include mental health and substance use services as an essential health benefit.
• Preventive care. Non-grandfathered plans cover depression screening for adults and adolescents without cost sharing.

On a fully insured plan, the carrier does most of the parity work. On a self-funded or level-funded plan, the employer is responsible for the comparative analysis, which usually comes from the administrator and should be reviewed. See benefits compliance.

Getting care used, not just covered

• Test the network. Ask the carrier how many in-network therapists and psychiatrists near your locations are accepting new patients, and how long the first appointment takes to book.
• Add a faster front door. Telehealth therapy or an EAP with a quick intake gives employees a route in while they look for longer-term care.
• Say it more than once. Most employees cannot name their EAP. Put the number on ID cards, the intranet and every open enrollment packet, and have managers mention it.
• Check the cost at the point of care. On a high-deductible plan, employees pay the full negotiated rate for therapy until the deductible is met. An HSA contribution or a lower office visit copay can be the difference between a first appointment and none.
• Train managers to refer, not diagnose. The goal is knowing where to point someone, not assessing them.

More on EAPs: employee assistance programs and EAP benefits for employees.

How to tell whether it is working

• EAP utilization, reported by the vendor in aggregate, compared with its own benchmark.
• On self-funded and level-funded plans, the share of claims for behavioral care and how much of it is out of network, which signals a network gap.
• Short-term disability claims with a mental health diagnosis, and how long they last.
• Employee feedback on whether they know what is available and how to reach it.

Employers see these numbers only in aggregate. Individual claims and EAP use are confidential under HIPAA and the EAP’s own rules, and should never reach managers.

Frequently asked questions

Are employers required to provide mental health benefits?

No law requires an employer to offer health coverage for mental health on its own. Fully insured small-group plans must include it as an essential health benefit, and any group plan that covers mental health or substance use care must follow federal parity rules.

What is an employee assistance program?

An EAP is an employer-paid program that gives employees and their household members a small number of free, confidential counseling sessions, plus referrals and help with issues such as legal, financial and family concerns.

How much do mental health benefits cost employers?

Behavioral care is part of the medical premium. An EAP is usually priced as a small monthly fee per employee and is one of the lowest-cost benefits an employer can add. Ask for the vendor’s utilization reporting before renewing.

Does an EAP affect HSA eligibility?

Not if the EAP does not provide significant medical care. Most EAPs offering a few counseling sessions and referrals qualify as excepted benefits and do not disqualify employees from contributing to an HSA.

Can a QSEHRA or ICHRA reimburse therapy?

Yes, if the arrangement reimburses qualified medical expenses beyond premiums. Therapy with a licensed provider is generally a qualified medical expense; check the plan document.

Can an employer find out which employees use mental health benefits?

No. Individual claims and EAP use are confidential. Employers receive aggregate reports only, and plan health information must be kept separate from employment decisions.

Want to know whether your plan’s mental health benefit actually works?

CFH Insurance Consultants is an independent employee benefits firm, founded in 2007. We are licensed insurance brokers, and for proper coverage of an account we work in teams of five: an account executive, an account manager, a plan analyst, customer service and IT. We will check your carrier’s behavioral health network around your locations, review what employees pay per visit, and compare your EAP’s reported use against its benchmark, then show you what would change access most for the least money. Send us your renewal, call 248.370.8853, or book a 30-minute call.

Related reading: Wellbeing and population health · Disability plan coordination · What is an HSA?

This article is general information, not legal or medical advice. If you or someone you know is in crisis, call or text 988, the Suicide and Crisis Lifeline.

Unhappy with your current broker? Switch to CFH. Your employees won’t notice. You will.

Also from CFH: Mental health parity in 2026: what employers still have to do