Disability insurers in Canada are at a crossroads. Gone are the days of managing claims for clearly defined, visibly apparent conditions with predictable recovery and return-to-work timelines. In their place stands a new adversary: largely invisible, difficult to diagnose, and resistant to predictable recovery patterns and traditional claims approaches. Mental illness—that formidable foe—has moved from the margins to dominate the disability landscape, accounting for more than a third of all disability claims and over 70 percent of the total costs—signaling a necessary shift in focus for 2026.
As one of the nation’s most visible mental health awareness days fast approaches—Blue Monday on January 19—now marks a critical moment for insurers to assess how effectively they are responding to what has become the workforce’s most pressing health and safety concern, with an economic impact exceeding $51 billion each year.
As experts note, how well insurers respond to this crisis is a telling measure of their readiness to meet the industry’s rising demands for consolidation, digitalization, diversification, and—above all—prevention. A truly effective response will inevitably go beyond claims management to help employers mitigate risk before it escalates, while equipping plan members to safeguard their mental wellbeing upstream—two hallmarks of a prevention-oriented approach.
“Amid rising premiums and economic uncertainty, employers are scrutinizing every workforce health investment with renewed intensity. Insurers’ ability to demonstrate value across the policy term will increasingly determine whether organizations choose to invest,” Dina El Helou, Vice President of Clinical Service Delivery – Americas at Workplace Options explains. “Comprehensive mental health support sits at the centre of this new value proposition. As younger, notably more open employees enter the workforce seeking stronger support for their emotional wellbeing, organizations will increasingly recognize the advantage of partnering with insurers already attuned to these needs, delivering measurable results that lower costs, decrease absences and turnover, and sustain healthy, engaged teams as mental illness emerges as the leading driver of time away from work.”
The Mental Health Landscape Insurers Face Today
Even before today’s surge in claims, findings from the Centre for Addiction and Mental Health (CAMH) showed that as many as one in two Canadians would experience a mental health issue by age 40. Now, that figure is projected to be even higher, as economic uncertainty, job insecurity, and overlapping crises fuel a rise in anxiety and adjustment disorders—now the second-leading cause of mental health-related disability claims behind depression, the leading cause of disability in Canada.
And yet, despite both rising prevalence and unprecedented public awareness, access to timely support continues to lag. A national shortage of mental health professionals, extended wait times, and limited availability of care—compounded by internalized stigma, time constraints, and financial barriers—mean that a significant share of Canadians (including more than half of those aged 18 to 34) are simply not receiving the care they need to restore their mental wellbeing.
For insurers and their client organizations alike, this gap has tangible consequences. The longer individuals go without appropriate intervention, the more complex and entrenched their conditions become—reducing the likelihood of a speedy or sustainable recovery and drastically increasing the risk of prolonged or indefinite absences, higher claims costs, and slower, often less successful, returns to work. Research from Sun Life confirms that not only are mental health-related claims twice as costly as those for physical conditions, but also more prolonged—accounting for 41 percent of long-term disability claims and subsequently placing tremendous financial as well as operational strain on insurers.
The task for insurers, therefore, is to find a way step in and deliver support that honours their commitment to helping plan members return to work. If reactive, curative care will no longer suffice, the logical alternative would be to provide proactive, preventive support that helps policyholders safeguard their mental health before challenges materialize.
As Dina explains, “Taking a preventive approach to mental health is fundamentally a risk-management decision. For years, psychological injury was something insurers could afford to treat defensively, relying on denial as a form of risk control because the clinical realities felt too unfamiliar or hard to manage. But the landscape has changed. Legislation has broadened the scope of what qualifies as a disability, younger demographics have further raised expectations around support, and both the volume and severity of claims have grown in the face of today’s increasingly volatile, catastrophe-driven world.”
“A preventive, forward-leaning strategy gives insurers the footing they need to reorient themselves to this new reality,” she continues, “buying time to upskill teams and slow the acceleration of claims while strengthening their market position, reputation, and operational reliability in the process.”
Designing a Scalable Prevention Strategy: Three Notes for Insurers
Crafting such a credible prevention strategy ultimately rests on three core, interlocking components:
- Multimodal access to counselling support
- Training for managers and claims professionals
- Workplace education and awareness initiatives
At the foundation of any successful prevention strategy is the availability of accessible support. In the face of persistent barriers to traditional, in-person care—including long work hours, caregiving responsibilities, geographic constraints, and linguistic considerations—flexible pathways to support are essential. Telephonic, video, chat-based, and on-demand counselling options allow plan members to access care in ways that accommodate their scheduling, confidentiality, and linguistic needs—as well as their personal preferences.
By partnering with a wellbeing solutions provider like Workplace Options—backed by an expansive, nationally distributed network of licensed clinicians—insurers can offer the seamless, customized support plan members need to promptly and proactively address their mental health concerns and prevent distress from escalating into disability.
Access to care is only part of the equation, however. Equally critical is the promotion and enablement of its use. Managers—whether a claims agent or direct supervisor—play a decisive role in shaping help-seeking behaviours. In the workplace, managerial attitudes toward mental health strongly influence whether employees feel safe accessing support. Where encouragement is absent, utilization tends to remain low, as employees fear judgment, discrimination, or career repercussions.
In the insurance world, a similar dynamic exists. While there is some latitude in the agent-policyholder relationship, interactions at the claims stage are particularly consequential. Engagement with a claims professional who appears ill-equipped or disinterested in addressing the emotional distress a policyholder may be facing can trigger further distress, exacerbate claims, and increase the risk of adversarial outcomes, including litigation. Earlier still, inadequate communication about available resources can result in missed opportunities for early intervention, as plan members remain unaware that help exists.
For these reasons, training is essential. Claims professionals and managers must be equipped to recognize signs of distress, engage in sensitive, emotionally informed conversations, and confidently connect individuals to appropriate supports. Through partnerships with providers like Workplace Options, insurers can once again deliver support at scale—helping managers, claims teams, and account managers effectively promote, implement, and maximize the use of mental health services.
In the same vein, educating plan members about the availability and importance of these services is imperative to ensure utilization. Research shows that half of Canadians with symptoms consistent with depression or anxiety are undiagnosed, while findings from a 2022 national poll conducted by Mental Health Research Canada (MHRC) reveal that only a third of Canadians feel confident they could recognize signs of mental illness in themselves.
With training solutions centered on topics such as self-awareness, emotional intelligence, “Demystifying Counselling,” and recognizing and responding to mental health needs, insurers can help plan members build the skills required to identify personal risk and take action early to protect their mental health, maintain strong attendance, and avoid the hefty consequences of delayed intervention.
From Cost Control to Competitive Currency: How Mental Health Prevention Creates Market Advantage
With mental health claims now the fastest growing category of disability costs in Canada, it’s clear that something must be done to buffer the economic—and reputational—impact of ever-increasing threats to workers’ psychological wellbeing. Should nothing change, the cumulative economic impact could reach $2.5 trillion by 2041.
On the other hand, partnering with a wellbeing provider equipped to deliver comprehensive support across the policy term can drive meaningful improvements: absences can be shortened by up to six weeks per case, resulting in hundreds of thousands of dollars in direct savings—both for organizations and their insurers. Workplace Options’ programs, in particular, have demonstrated a return on investment exceeding 50 percent in helping employees return from sick leave, with 98 percent of participants reporting that they feel supported and affirming their organization’s decision to offer WPO’s support.
The choice is ultimately insurers’ to make. They can either invest now and reap the benefits of a healthy, engaged, and present workforce, or delay action and absorb the financial and operational costs later. As the competitive pressure to deliver whole-journey support intensifies, the answer is clear: preventive support is the path forward, and insurers must get on board if they wish to succeed in the years ahead.
Get started now on building a preventive approach to mental health-related disability. Connect with Workplace Options today.
