Employment: The Risks When Using Mental Health Insurance

By:  Mentor Research Institute


There are situations in which the current or prior use of mental health insurance can prevent you from getting hired by an employer.  For example, you can be excluded from employment in certain public positions such as law enforcement, security agencies or the military.  In the private sector you can be formally excluded from jobs that require special background checks, certain performance standards and security checks.  The most common injustice involves the informal means by which employers deny promotions and exclude people from jobs.  Informally, you can be excluded from any job, or not promoted, as long as the employer doesn't officially set forth a policy that would otherwise be discriminating or an unfair labor practice.  It boils down to the unofficial policy that  guides decisions to hire or promote people.  The private and public sectors have a long history of employment practices that are unfair or discriminate unfairly against people who are different or who make them uncomfortable.   The stigma of mental illness still exists and operates even with employers who sincerely deny such practices.  It is unfortunate and unfair, but many benign diagnoses carry a stigma which is unfounded and results in unfair labor practices and even discrimination against a good employee. 

The most common injustice involves the informal means by which employers deny promotions and exclude people from jobs. 

In order to maintain control over their employment practices, employers are constructing elaborate company policies and using third party agents to insulate them from liability.  One of the more popular company policies is called the "at will employment policy" by which employers can fire employees without giving grounds.   In reality, the basis for many of these policies and practice are absurd and probably illegal.  But what can a person do about it?  Getting to the bottom of what actually happened and then being able to correct an injustice can be impossible.  At the very least it requires a lot of energy, money, and time, as well as a good attorney.  The odds are against you even if you are right and even if you have all the resources necessary .

There are many ways in which your employer can gain access to your history of health care.  It happens every day.  There are three principle ways.

1.  The employee volunteers the information.

2.  The employers asks the employee or job applicant and he or she tells the employer.

3.  The employer or agent for the employer finds out from your health care company.

Whether you should tell an employer about your health care history is something you should probably ask an attorney.  But it is important to recognize that your health insurance company has a contract with the employer and not the patient.  While you may be your doctor's patient, your employer is the customer of managed care, an HMO or an insurance company.  Insurance and managed health care contract to provide care for the employees of a business and as a result cater first to business.  The greatest risk to your future employment and career comes from managed mental health care and insurance companies in which the line between health care companies and your employer's company become unclear. 

The important questions are "How do employers get information on your health care history?"  In order to use health insurance, health care companies require your doctor, psychotherapist or counselor to give you a diagnosis which they in turn enter into their computer systems. In order to get your insurance company to pay for treatment you must have a diagnosis.  There are many risks associated with using health insurance.  First of all, there are problems with the primary diagnostic system and how it is being used by managed health care.  Secondly, well intended doctors, psychotherapists and counselors routinely give their patient a diagnosis because they can justify the diagnosis and the patient doesn't want to pay out of pocket for counseling or treatment.  It is very simple.  In order to get your health insurance to pay for treatment you must have a diagnosis that qualifies you and frequently it must be one of the more serious diagnoses.  Instead of giving you the least serious diagnosis (which would disqualify you from treatment), you may end up getting a more serious diagnosis.  In order to get a diagnosis that is severe enough to compel your insurance to pay for treatment you must be willing to accept that there will be a permanent record of that diagnosis and your treatment.  More importantly, many insurance companies routinely demand detailed, intimate and private information about your entire life before they authorize payment.  They do this because they don't trust your doctor or counselor and because having that information is of value to them.  Of course they will tell you that it helps you as well and that you can just trust them. There are good reasons to be concerned about the use of the current diagnostic system

The Medical Information Bureau, Inc., in Cambridge, Massachusetts, maintains a nationwide database of health care claims and makes information available to interested parties.  Insurers have been known to withhold life insurance from people with certain diagnoses and to withhold health and disability insurance from people who have submitted mental health claims to another insurer.  Other interested parties may access this data as part of legal proceedings or actions in which you are required to sign a release.

The lines between employers and health care companies are increasingly blurred.   For example, HMOs are both the employer and the health care provider for their employees.  HMO employees must trust that supervisors, managers and supervisors will police themselves and will follow their own privacy policies.  The conflicts of interest are huge and the informal mechanisms of sharing information are astonishing within managed care companies and make real privacy unlikely. 

The line is also blurring between the business of your employer and the business of health care.  They increasingly work together to cut costs.  As insurance companies increasingly centralize their records, they provide access to multiple sources who are not policed by any external agency and are essentially on their good behavior to not misuse their access to your records.   Supervisors, human resource managers, employee assistance counselors, recruitment specialists and employment screening investigators who work for employers can gain access to these records and are expected to voluntarily police themselves and ignore information that would discriminate against you.  Workers at many levels of contact with your employer have easy access to your personal data.

Employers can find out more about your health care history in other ways.  In some cases you can be compelled by a prospective employer to sign a release authorizing them or their agent to access to your mental health records.  They can ask you if you have any condition or problem and imply that they merely want to be sure you receive protections that you are entitled to under the law.  For example, the  Americans With Disabilities Act of 1990 provides some federal protection for citizens who are disabled by psychological or physical problems.  However the ADA applies primarily to large employers, is difficult to enforce and many psychological problems are not covered.   At best, people may be protected somewhat from the most obvious and gross acts of discrimination. 

Employers are looking for information that they feel is essential to select the best person for a job.   Herein lies a trap, if you lie on the application because you don't think it is any of their business, the act of lying can in some cases be grounds for dismissal.  If you answer the question, you have to trust you won't be discriminated against.  Chances are, you will never know and they will never tell you why you are not promoted or why you were rejected from a job application.