Mental health and group insurance: Early intervention works

Sally Rose

By

28/08/2017

SPONSORED CONTENT | A dozen leaders from the superannuation, group insurance and mental health sectors met to share their insights about how to better identify and support at-risk clients. Being out of work, whether due to redundancy or a physical ailment, is a risk factor to developing a secondary mental health condition such as anxiety or depression.

A growing proportion of people who make a claim on their group insurance due to physical illness or injury are now lodging secondary claims related to their mental health. It shouldn’t be surprising that the experience of being in pain, incapacitated and unable to work can lead to depression, anxiety or other forms of psychological stress.

In light of this, industry leaders are working hard to understand how to better identify and support at-risk claimants.

REST Industry Super chief operating officer Andrew Howard said it was important for super fund trustees to be mindful of the extent to which lodging an insurance claim can in itself be an anxiety-inducing experience.

“We have to look at those things we do in life insurance that make people feel like they don’t have much control or aren’t being communicated with very well,” Howard said. “Then re-design our processes so they are easier for people to work through.”

Berrill & Watson principal John Berrill, a lawyer who helps people with insurance claims, said the biggest cause of secondary mental health problems he sees in people who are on claim was financial disadvantage as a result of unpaid or late claims.

He is optimistic the Financial Services Council’s Life Industry Code of Practice, which came into effect on July 1, 2017, will lead to improvements. An Insurance in Superannuation Industry Working Group is currently adapting the code to the specific environment of group insurance.

The three most significant things the group insurance industry could do to reduce claimants’ anxiety, Berrill said, were making payments on time, reducing the complexity of forms individuals and their doctors need to complete and reducing call centre waiting times.

National Mental Health Commission chief operating and financial officer Kim Eagle said early intervention was critical and urged the industry to work closely with consumers to make sure they were receiving the services and support they needed throughout their claim journey.

Getting back to work

AIA Australia & New Zealand chief executive Damien Mu said the life insurer was working closely with its partner funds to help at risk members.

“We know from our own claims data, and also from independent studies, that the longer somebody is off work the more likely they are to get a secondary illness, which is most likely to be mental health-related,” Mu said.

“The chances of a successful return to work are as much as halved after 70 days off work.”
AIA’s Restore program is an early intervention rehabilitation initiative focused on helping claimants suffering from mental health conditions re-connect with their day-to-day life. “Maybe go to the gym or just a walk around the block, before even starting those conversations about going back to work,” Mu explained.

But regulatory barriers exist that limit the ability of group insurers to pay for claimants to access medical rehabilitation services early in the assessment process. REST Industry Super is one of AIA’s group insurance clients that has participated in the Restore program, and Howard said it had proved hugely beneficial.

“It’s good for the industry and good for people in general if we can add rehab to the services that we provide through group life insurance,” he said.

AIA Australia chief group insurance officer Stephanie Phillips said she hoped the Parliamentary Joint Committee inquiry into the life insurance industry would consider recommending removing some of the barriers to group insurers paying for medical rehabilitation services early in the claims process.

Phillips said around 43 per cent of AIA Australia’s claims team were allied health workers and this was helping more people get the psychological support they required earlier in their recovery from a physical injury.

“Taking the whole view of the individual really helps better manage the whole problem, not just the physical problem, and I think that’s helped,” she said. “A person may have been the breadwinner in their household and had a physical injury that has reduced their financial ability to look after their family.

That can affect their relationships and their self-esteem. All of those things have to be taken into consideration.”

Reducing stigma

Phillips said early intervention was key, but is often hampered by the fact that on average people delay lodging a mental health claim till two years after they started experiencing the issue. “We need to remove that stigma, of people being too afraid to talk to their employer about their mental health issues and leaving it too long,” she said.

Cbus Super general manager industry partnerships Chris Lockwood echoed this concern. “The greatest risk is what has happened in that time, in those years, before we’ve even spoken to someone,” he said.

Mu agreed more work needs to be done to reduce the stigma that can still linger around lodging a mental health claim.

“There’s been some improvement in reducing the level of stigma,” he said. “But when you look at the statistics and realise that nearly every Australian will experience some sort of mental health issue at one point in their life – then you realise we’ve still got a long way to go to get people
feeling comfortable speaking up.”

Stigma is one reason people delay lodging a mental health claim but another complicating factor is that many people receive inappropriate legal advice to delay putting in a claim via their superannuation fund until a workers’ compensation or other claim has been finalised.

Berrill said this was bad advice and that, while the rules that govern how policies intersect can be very complicated, people should be encouraged to notify of their intention to claim as soon as possible.

IOOF Holdings product manager insurance Michelle Voudouris said the fund was training its call centre staff to be better able to identify when someone was talking about taking time off work or being in financial stress, and offering to connect them with a claims person to see if any
help was available.

“Obviously that puts a bit of financial stress on the claims experience initially, but it does mean we’re in touch with people sooner rather than later,” she said.

Industries in crisis

MTAA Super, an industry superannuation fund for the motor trades, is taking proactive steps to support its members being affected by mass closures in the automotive manufacturing industry.

After previous  vehicle manufacturers shutdowns in Australian MTAA Super saw mental health claims increase for impacted workers, the funds executive manager operations Chris Porter said.

“We know that in October this year the last two vehicle manufacturers in Australia are going so
we’ve tried really hard to work with our partners and do something ahead of that.”

Porter said MTAA had representatives available on sites that are due to close, and those car factory workers soon to find themselves out of a job are being encouraged to talk through a plan for how they will cope psychologically, as well as financially.

SuperFriend chief executive Margo Lydon said the industry needed more sophisticated data management, to increase the potential for large scale analysis of trends.

“If the sector could work together to collaboratively agree on some basic data sets, then that collective information could be incredibly powerful,” she said.

However, she noted that while better data management could help the industry identify risk trends, it was important to remember that mental illness didn’t discriminate and could strike anyone. Loss of job security is, how ever, a common trigger.

That is why Cbus Super now contacts members when superannuation guarantee payments cease being deposited into their account – often a sign that they are out of work – to see if that is something they want to talk to someone about.

Voudouris said IOOF was now flagging statements when super guarantee payments had ceased in a bid to ensure members were aware that it might limit their eligibility to claim on any income protection insurance they were paying for.

A bigger policy dilemma

Mental Health Australia director of policy and projects Josh Fear welcomed the industry’s efforts to reduce stigma, but noted the next step remains difficult.

“What worries me is where someone has identified a person in distress, what is the next step that comes after that?” he said.

“I think one of the many factors that is driving increased claim costs is that we have a mental health system that’s broken.”

Fear said he hoped the insurance sector would prove a powerful voice in a “coalition of interests” with voices from the patient care and advocacy sectors calling for a stronger mental health system.

Association of Superannuation Funds of Australia chief executive Martin Fahy said there were limits to what the group insurance sector could achieve. “There’s a much bigger public policy question that needs to be tackled in terms of the way we resource and address this,” he said.

However, he also said the sector needs to do its best to prepare its response to what would likely be a massive increase in mental health-related claims in the event of an economic recession.

“A 26-year run of uninterrupted positive economic expansion eventually comes to an end,” he warned. “I hope it doesn’t happen, but if we see interest rates go up by 300 basis points, with the level of indebtedness and the stresses that brings we could see a tsunami of claims.”

Financial Services Council chief executive Sally Loane said the industry must learn to do a better job of communicating with the general public about how different types of group life insurance products, such as TPD insurance and income protection policies, work and the benefits they provide.

This report is based on an Investment Magazine Roundtable, sponsored by AIA Australia.