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The Cost of Mental Illness to Employers & Employees

The Cost of Mental Illness to Employers & EmployeesIn a previous post, I asserted the need for people with mental illness who are functioning well to speak out about their success with their disease. I also spoke of the importance for people to hold themselves as examples of how one can live successfully and productively with a mental illness.

On second thought, you may want to be cautious about doing this at work.

Individual contributions help make companies successful, and surely people with mental illness contribute greatly to their employer’s success.

However, people with mental illness may also contribute greatly to their employer’s health care and productivity costs. All companies seek to minimize costs. In doing so they may limit opportunities available to those with a known mental illness in order to avoid the significant costs often associated with psychiatric conditions.

How much does an employee with mental illness cost?

Consider the costliest disorder to employers, bipolar disorder. A study published in 2008 by Laxman, Lovibond, et al. collected data on a sample of 761 workers with bipolar disorder and 229,145 workers without bipolar disorder.

The annual cost of healthcare for an employee with bipolar disorder was $6,836 more than the control group average ($9,983 vs. $3,147). And the cost wasn’t just skewed high due to the cost of psychiatric care. Many physical health conditions are comorbid with bipolar disorder, so the group with bipolar disorder scored higher costs in every measurable health care cost category.

But these expenses only accounted for 20 percent of the total cost of bipolar disorder to employers. Indirect costs proved even higher.

The absentee rate for the bipolar group was 18.9 workdays per year, while workers without bipolar disorder missed 7.4 workdays. Because the number of missed workdays was so large, many in the bipolar group spent time on short-term disability, adding increases in insurance premiums and ratings to the cost of lost days of work.

Worker compensation costs also were significantly higher. In terms of productivity, the output of the workers with bipolar disorder was 20 percent less than that of those without the illness. This was affected by the decrease in performance brought on by working while cycling through a depressive or manic episode.

As companies seek to limit health care and associated costs, we’re left with the cost to workers of stigma and discrimination. In fact, a majority of the workers with bipolar disorder interviewed reported that stigma in the workplace led to their being dismissed from positions, denied promotions, demoted, or held back in their career in other ways.

I remember one job I had where I was open about my bipolar disorder. After being passed over for a supervisor position three times despite getting excellent reviews, I scheduled a meeting with the manager. Without my bringing up my diagnosis she told me that my not being chosen for promotion had “nothing to do with your problem.”

Obviously, it did. But even excellent performance cannot mask the fact that the chronically ill employee may be very expensive. Because of the Americans with Disabilities Act. employers are supposed to overlook these things when considering employing or promoting workers. But with an eye on the bottom line and a need to maximize productivity, many managers can’t.

So here I am, an advocate for openness, acceptance and self-reliance, telling you to keep your illness from your manager. If you seek accommodations, do so through HR. Your boss and co-workers do not have to know the reason why. There are ways that each of us can fight the stigma of mental illness. Only by each asserting that mental illness does not mean idleness or irresponsibility can stigma be overcome. But mental illness is expensive. Your job may not be the best place to wage the battle.


The Cost of Mental Illness to Employers & Employees

George Hofmann

George Hofmann is a mindfulness meditation instructor teaching people with mental illness how to manage stress. He also has bipolar disorder 1. He writes about these topics at

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APA Reference
Hofmann, G. (2018). The Cost of Mental Illness to Employers & Employees. Psych Central. Retrieved on October 24, 2020, from
Scientifically Reviewed
Last updated: 8 Jul 2018 (Originally: 24 Dec 2013)
Last reviewed: By a member of our scientific advisory board on 8 Jul 2018
Published on Psych All rights reserved.