Pharmacy tops the list of healthcare priorities for small and midsize employers. The No. 2 spot might surprise you: mental health.
In ParetoHealth’s 2026 State of Healthcare Spend report, employers named mental health a higher healthcare priority to address than cancer, cardiovascular disease, and endocrine conditions. Yet in the same analysis, mental health did not appear among the top five direct cost drivers.
That gap is meaningful. Employers aren’t reacting to mental health claims alone. They’re seeing its effects on lost productivity, absenteeism, rising costs for other conditions, and employees stretched thin caring for family members.
With World Mental Health Day on October 10, it’s a good moment to look at what that means for benefits strategy, and what employers can do to support their employees.
The cost goes well beyond mental health claims
Mental health conditions are common, and care is often hard to reach. More than 23% of U.S. adults experience a mental illness in a given year, while more than 40% of Americans live in areas with limited access to mental health providers.
When people can’t get care quickly, the effects add up. Untreated or poorly managed conditions can drive up medical spending, complicate other health issues, and pull people away from work.
Individuals with mood disorders have twice the annual healthcare costs of those without, and depression and anxiety account for an estimated 12 billion lost working days worldwide each year.
Mental health may not top a claims report, but employers feel it across the health plan and their workforce.
Why “we have an EAP” isn’t enough
Mental health needs range widely. Some employees do well with self-guided tools or coaching. Others need therapy or medication management. People with more complex conditions may need intensive outpatient, residential, or inpatient care.
Many small and midsize employers count on a traditional employee assistance program (EAP) to cover all of it. Often it came bundled at no extra cost. But having an EAP isn’t the same as having a mental health strategy.
93% of employers offer an EAP, yet only about half of workers know it’s available to them, and just 4% actually use it. The reasons are built into the model:
- Limited care. Many EAPs cap counseling at a few sessions. That’s enough for a short-term issue, but not for ongoing needs.
- Slow, phone-first access. Employees often call a hotline, go through intake, and wait for a referral.
- Little visibility. Employers often can’t see whether anyone uses their EAP or whether it helps.
- Dead ends. When someone needs more than short-term counseling, they’re often left to find care on their own.
The real test of any mental health benefit is whether it helps people get the right care when they need it. Ask:
- Can employees get an appointment quickly?
- Is it clear where to start?
- Are people matched with care that fits their needs?
- Can someone move to a higher level of care if they need it?
If the answer to any of these is no, the benefit exists on paper but isn’t doing its job.
Small and midsize employers deserve the same quality of care
Fixing that is hard for a small or midsize employer on its own.
More than 60 million Americans work at businesses with fewer than 500 employees, yet most small and midsize employers lack the scale to offer the same mental health benefits available at large companies.
The scale of the Pareto community enables us to offer enterprise-level solutions to close that gap and help employers manage costs more effectively.
Through the ParetoHealth Savings Engine, ParetoHealth Members have access to Lyra Select, which brings Lyra Health’s mental healthcare to small and midsize employers. The Savings Engine combines data, analytics, clinical expertise, and targeted programs to address the biggest sources of healthcare costs, including mental health.
Better access starts with making care easier to find
Lyra Select offers employees and their families both virtual and in-person care, with appointments typically available in less than a day.
The ParetoHealth and Lyra collaboration offers small and midsize employers:
- Care without the wait: Employees and family members can typically see a qualified provider within one day.
- Better outcomes, lower costs: 90% of members who use Lyra improve or recover, which means fewer high-cost claims like ER visits or hospital stays and significant savings for both employers and employees.
- Healthier, more productive teams: With the right support, employees are more resilient, less likely to burn out, and more engaged at work, leading to stronger performance and lower turnover.
An independent, four-year analysis found that Lyra’s care model consistently reduces annual healthcare claims costs year over year for employers offering the benefit.
Make mental health a year-round strategy
Mental health ranks as the No. 2 healthcare priority for small and midsize employers for a reason. The impact can reach beyond mental health claims into healthcare costs, missed work, productivity, and the challenges employees face when managing care for themselves or their families.
Employers can do something about it.
Better access is a good place to start. That means making it easier to find care, reducing the wait for an appointment, and connecting people with support that fits their needs.
For small and midsize employers, the goal isn’t to check a box with a mental health benefit. It’s to make sure people can actually use their support when they need it and it provides the right level of care they need.
World Mental Health Day puts mental health in the spotlight for one day. A strong mental health strategy keeps it there all year.
Learn how Lyra Select, available through the ParetoHealth Savings Engine, helps Members give employees and their families better access to mental health care.
