The Mental Health Claims Few Connect to Culture

In many organizations, two conversations happen in parallel and rarely intersect.

In one room, HR discusses culture initiatives. Employee engagement. Psychological safety. Manager training. The language is aspirational: building better workplaces, supporting wellbeing, creating environments where people thrive.

In another room, Benefits reviews disability claims data. Mental health claims are up again. Durations are extending. Costs are escalating. The language is operational: manage the trend, control costs, improve return-to-work rates.

These conversations are about the same thing. The people in each room rarely realize it.

Mental disorders are now the most common reason for long-term disability claims at Sun Life, one of the insurers that reports on it: almost 40% of its long-term disability claims in 2024.

The argument here is that this isn’t a benefits problem with a benefits solution. It’s a culture problem showing up in the benefits data.

Almost 40% of Sun Life’s long-term disability claims in 2024 were for mental disorders, the most common diagnosis on its books.

The Numbers Behind the Crisis

Canadian insurers paid $9.5 billion in disability benefits in 2023—$7.7 billion in long-term disability, $1.8 billion in short-term. Claims for mental health counselling alone reached $730 million, more than double the figure from four years earlier.

The growth shows no sign of slowing. At Sun Life, the number of plan members claiming for a mental health practitioner grew by almost 70% between 2019 and 2022, and the volume of those claims grew another 20% in 2023. On its long-term disability claims, adjustment disorder and anxiety made up over 40% of mental disorder claims in 2024, up from 25% in 2019.

The composition has shifted. Depression has held steady; the growth is in adjustment disorder and anxiety. Some of that is likely more people seeking help as stigma eases, and some of it more people struggling.

What the claims data suggests is a workforce under sustained psychological pressure that organizational systems aren’t adequately addressing.

$730M in mental health counselling claims alone in 2023—more than double the figure from four years earlier.

Where the Crisis Hits Hardest

The burden isn’t distributed evenly. Sector analysis reveals stark disparities, and the argument here is that they point to workplace conditions.

Health care leads. In 2025, full-time employees in health care and social assistance lost 16.8 days each to illness, disability and personal or family reasons, the most of any major industry group, against 11.0 days for all full-time employees. In the Canadian Federation of Nurses Unions’ 2024 survey of 5,595 nurses, nine in ten registered some degree of burnout, four in ten intended to leave their job or the profession, or retire, within the year, and nine in ten had experienced some form of abuse at work in the past year.

A Toronto hospital study followed the same staff through the first year of the pandemic. The share of nurses with high emotional exhaustion, the core of burnout, rose from 54% in fall 2020 to 63% by spring 2021, against a pre-pandemic benchmark of 20–40% on the same measure. And young nurses are leaving: across Canada in 2023, for every 100 nurses under 35 who registered to practise, 40 others under 35 left the register (37 in Quebec).

Education mirrors the pattern. Across studies worldwide, the share of teachers with clinically meaningful burnout ranges from 25% to 74%. In a February 2021 survey of 1,276 BC teachers, run by UBC with the BC Teachers’ Federation, four in five reported worse mental health that school year and 41% said they were now more likely to seek to leave the profession. In a 2026 study of 733 Canadian teachers, almost 40% had taken a formal leave of absence for mental health reasons.

The public sector shows the same gap. In 2025, public sector employees lost 15.7 days against 9.5 in the private sector. Employees covered by a union lost 16.4 days, against 8.5 for those without.

The sectors under the most strain here—health care, education, public service—share common features: high emotional demands, inadequate staffing, increasing workloads, and limited control over work conditions. Most of these are features of how the work is organized.

The Culture Connection Nobody Makes

Here’s what the claims data suggests: the conditions of work show up in mental health.

In a July 2024 survey, one in four working Canadians (24%) reported burnout “most of the time” or “always”, up from 21% the year before. Among health care workers it was 38%.

The National Standard for Psychological Health and Safety has existed for over a decade. Only 12% of employed Canadians say they are familiar with it, and more than half have never heard of it.

The disconnect is organizational, not informational. Benefits departments see claims as events to manage. HR sees culture as programs to implement. Neither connects the dots: the claims may be downstream evidence of upstream culture failures.

Consider the causal chain:

Inadequate staffing creates workload pressure. Workload pressure depletes psychological resources. Depleted resources reduce capacity to cope with normal stressors. Reduced coping capacity manifests as anxiety, depression, burnout. Clinical symptoms eventually cross thresholds requiring medical intervention. Medical intervention triggers disability claims.

At each stage, the organization had intervention opportunities. By the time someone files a disability claim, multiple earlier chances to address the problem have often been missed.

“Many disability claims represent a series of missed opportunities. The claim is the symptom. The workplace conditions that preceded it are often part of the cause.”

Why Organizations Miss the Connection

Several structural factors prevent organizations from connecting culture work to claims outcomes.

Different Reporting Lines

HR and Benefits often report to different executives. Their metrics don’t overlap. Their budgets are separate. Success in one function isn’t measured against outcomes in the other.

When Benefits sees claims rising, they look for benefits solutions: better EAP utilization, mental health apps, disability management programs. When HR sees engagement declining, they look for HR solutions: surveys, training, recognition programs.

Neither asks whether the problems are connected because their organizational structure doesn’t encourage that question.

Different Time Horizons

Culture interventions operate on long timescales. Meaningful change in psychological safety takes months, often longer, to develop and measure. Benefits works in claims cycles—current quarter, current year, renewal period.

This mismatch creates attribution problems. If you invest in culture work in January, you probably won’t see claims impact until the following year at the earliest. By then, dozens of other variables have changed. Connecting the investment to the outcome requires longitudinal thinking that quarterly reporting doesn’t support.

The Prevention Paradox

Successful prevention is invisible. If culture work prevents claims from occurring, you don’t see the claims that didn’t happen. You only see the cost of the intervention.

This creates a perverse incentive structure. Claims management is visible and measurable. Prevention is speculative. Organizations invest in what they can measure, even when what they can’t measure might produce better outcomes.

Vendor Incentives

The disability management industry profits from claims. The wellness industry profits from programs. Neither has strong incentives to solve the underlying problem.

Wellness vendors sell individual interventions that don’t address organizational causes. Disability vendors optimize claims handling rather than claims prevention. Both can demonstrate activity without producing meaningful reduction in the problem.

The Canadian Regulatory Context

Canada’s disability landscape adds complexity that makes the culture connection even more important.

Provincial variation creates operational challenges. British Columbia expanded its workers’ compensation mental health presumption in June 2024 to 11 new occupations. Ontario’s framework differs. Federal employees face different rules again. For national organizations, this patchwork requires sophisticated understanding of how workplace conditions translate to claims outcomes across jurisdictions.

The National Standard remains underutilized. The CSA Z1003 National Standard for Psychological Health and Safety identifies 13 psychosocial factors including organizational culture, psychological support, workload management, and psychological protection. It provides a framework for prevention. Yet, a decade on, few employed Canadians know it.

Health care system constraints add delay. In 2025, physicians reported a median wait of 28.6 weeks from a GP’s referral to specialist treatment, 208% longer than in 1993. In 2024–25, half of those referred to publicly funded community mental health counselling waited up to 30 days for a first session, half waited longer, and one in ten waited four months or more. In 2024, 17% of Canadian adults had no regular health care provider.

Once someone reaches the point of needing clinical care, those delays are likely to lengthen the time off. Prevention isn’t just better for people—it’s operationally essential, because the treatment system can’t absorb the demand.

28.6 weeks: the median wait from a GP’s referral to specialist treatment in Canada in 2025, 208% longer than in 1993.

What Could Reduce Claims

The evidence below points to organizational-level interventions, not individual wellness programs, as the more promising path. None of these studies measured claims directly.

Early intervention matters. The window for effective action may be narrow.

But earlier intervention is prevention: addressing workload, manager behavior, team dynamics, and psychological safety before clinical symptoms develop.

Organizational interventions can work. A 2024 systematic review of 22 controlled studies of organizational interventions for health care workers found that 68% reported improvement in at least one mental health outcome, most consistently burnout. The strongest evidence was for changing the job itself: job and task modifications.

Psychological safety comes first. The argument here is that teams that already have it weather stress better, and that it has to be built before a crisis, not during one.

Change that invests in people lasts. A meta-analysis of 137 longitudinal studies found that cost-cutting change, such as restructuring, lowered job attitudes and they stayed lower (d = −0.22), while change that invested in people raised them and they stayed higher (d = +0.18). Both effects ran through whether people felt supported. What kind of change you make, and how supported people feel through it, both matter.

“The most expensive intervention is the one that happens too late.”

Connecting the Conversations

Organizations serious about reducing mental health claims need to bridge the HR-Benefits divide. Here’s what that looks like practically:

Share Data Across Functions

Benefits has claims data by department, tenure, role type. HR has engagement data, turnover data, manager effectiveness data. Combining these datasets can reveal patterns neither function sees alone.

Which departments show both low engagement scores AND elevated claims? Where do manager changes correlate with claims spikes? What’s the relationship between team psychological safety scores and subsequent disability rates?

Measure Culture with Claims-Relevant Metrics

Standard engagement surveys are not built to capture the factors that may predict disability claims. Psychological safety measurement, workload assessment, and psychosocial factor evaluation provide actionable upstream data.

The National Standard’s 13 psychosocial factors offer a framework. Measuring these factors at the team level—with proper statistical validation—can create leading indicators for claims risk.

Invest Prevention Resources Based on Claims Patterns

If health care claims are highest, health care teams need the most intensive culture intervention. If certain managers’ teams show elevated claims, those managers need development or accountability. If specific role types show claims concentration, job redesign for those roles is indicated.

Claims data should inform prevention investment allocation, not just claims management resource allocation.

Extend Time Horizons for ROI Calculation

The sequence recommended here: give culture investments 18 to 24 months before judging their effect on claims, and commit to measurement that spans more than one budget cycle.

In Deloitte’s study of seven Canadian companies, mental health programs in place for a year returned a median $1.62 for every dollar invested; those in place for three years or more, $2.18. The return grows with time, which is why it needs years, not quarters.

The Bottom Line

Canadian organizations are spending billions on disability claims, and the conditions of work are part of what drives them. Much of the money flows to manage symptoms while the causes remain unaddressed.

The argument here is that mental health claims aren’t random events. They follow organizational conditions: workload, staffing, management quality, psychological safety, job design. The claims data is a lagging indicator of culture health.

Organizations that connect these conversations—that see claims trends as culture feedback rather than benefits problems—have the opportunity to intervene earlier, more effectively, and at lower cost.

The HR team and the Benefits team are working on the same problem. It’s time they realized it.

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