Mental health utilization is up

Mental health utilization is up – but employer spending fell 7% in 2025 | Insurance Business

Mental health utilization is up – but employer spending fell 7% in 2025

The gap between rising demand and falling investment is widening, and brokers have a clear role at renewal

Benefits

Aug 31, 2026
Share

Seventy-three percent of large employers reported increased utilization of mental health and substance use disorder services in 2025, and another 17% expected demand to climb further, according to the Business Group on Health’s 2026 Employer Health Care Strategy Survey. The problem for brokers helping clients navigate renewal is that employer spending on mental health resources moved in the opposite direction: NFP’s 2026 US Benefits Trend Report found average spending fell roughly 7% year over year in 2025.

That gap – rising demand, falling investment – is the central tension in employer mental health benefits right now, and it is shaping both the vendor landscape and the conversations brokers need to be having with clients before next renewal

Why access remains the core problem

The treatment gap in the US sits in the background of every employer mental health conversation. SAMHSA’s 2024 National Survey on Drug Use and Health found that 61.5 million adults – 23.4% of the US population – had any mental illness in 2024, but only about 52% received treatment. That leaves roughly 29.5 million adults with a diagnosable condition who received no care. 

Insurance coverage is a significant factor in whether people access care. Platforms built around insurance reimbursement – Grow Therapy, Headway, and Talkiatry – have scaled most rapidly by reducing the friction between a patient’s coverage and an available in-network provider

Grow Therapy reported facilitating 7 million visits in 2025, raised a $150 million Series D in March at a $3 billion valuation, and stated coverage of 220 million insured Americans through partnerships with more than 125 health plans. That model – insurance-first, provider network at scale – is increasingly where the employer market is heading

The EAP model’s structural limits

The traditional employee assistance program (EAP) is where most employers currently anchor their mental health benefit, and utilization data suggests it is underperforming. A Prudential Group Insurance survey, cited in an August 2025 report, found that while 59% of employers offer EAPs, more than half of eligible employees have never used one. Barriers include concerns about confidentiality, uncertainty about what the program covers, and stigma

Industry estimates typically put annual EAP utilization at between 3% and 6% of eligible employees, though rates vary by employer size and program design

Low utilization conceals a downstream cost that brokers can make visible. An employee who does not use an EAP and whose mental health needs escalate will often surface in the claims data later through higher short-term disability costs, increased absenteeism, or more intensive health plan utilization. Brokers who can show employer clients the cost of untreated mental health conditions using their own claims data have a more concrete case for upgrading the benefit than engagement metrics alone provide.

The shift in the vendor landscape reflects this pressure. Platforms like Lyra Health, Spring Health, and Modern Health have replaced or augmented traditional EAPs at a growing share of mid-market and enterprise employers, offering faster matching, more sessions, and measurable outcomes reporting. Spring Health reports engagement rates often ten times the traditional EAP average

What brokers need to evaluate at renewal

Two structural questions now define the employer mental health benefit conversation at renewal. The first is whether the current offering connects to the health plan’s behavioral health network, or runs beside it. An EAP that operates parallel to the health plan but does not hand off to in-network providers creates an access cliff – employees exhaust EAP sessions and then face the full barrier of finding in-network care on their own

Universal Health Services’ $835 million acquisition of Talkspace, completed August 17, is a direct market response to that structural gap. It creates a referral pathway from virtual therapy through to inpatient behavioral health within a single organization, removing a coordination step that brokers and EAP administrators have typically had to handle manually

The second question is whether the employer can measure what the benefit is producing. Business Group on Health noted that with utilization rates now high, employers should shift focus from access to unit cost and quality, specifically whether employees are getting the right mental health support at the right time. More than half of eligible employees have never used their EAP, and the vendors gaining ground in 2026 are those providing employers with outcomes data rather than session counts alone.

The employer mental health benefit is no longer a renewal checkbox. The data on rising utilization, falling investment, and a widening access gap creates a clear advisory opening. Audit what the client has, determine whether it connects to the health plan network, assess whether outcomes data is available, and use claims data to make the cost-of-inaction case

Employer health costs are on a 15-year high trajectory, and mental health utilization is now explicitly identified as a cost driver alongside GLP-1s and specialty drugs. Brokers who can frame the evaluation clearly for clients are better positioned heading into a difficult renewal environment