Originally published here.

Unemployment among working-age people with serious mental illness is a significant social problem. Serious mental illnesses,or psychiatric disabilities, include mental, behavioral, or emotional disorders that may cause substantial functional impairment,interfering with major life activities such as working, completing school, or sustaining important relationships. In general, peoplewith disabilities have much lower rates of employment than those without disabilities (33% vs. 74%) (Erickson, Lee, & vonSchrader, 2014), and the rate for people with psychiatric disabilities is lower still, with estimates ranging from 10-15% amongthose receiving mental health services, and 20-25% among broader community samples (Bond, 2011).

Significant personal andeconomic costs are associated with unemployment, including social isolation, poorer health, long-term dependence on publicdisability benefits, and a life of poverty. The magnitude of this problem is substantial; about 4% of adults in the US age 18 andolder – over 10 million people – experience a serious mental illness in a given year (Substance Abuse and Mental Health ServicesAdministration, 2014).Their low employment rate notwithstanding, the vast majority of people withpsychiatric disabilities want to work (Frounfelker, Wilkniss, Bond, Devitt, &Drake 2011; Ramsay, et al., 2011).

Employment is increasingly seen as anintegral part of health for people with psychiatric disabilities, with work playinga central role in providing a sense of identity and promoting recovery (Dunn,Wewiorski, & Rogers, 2008; National Alliance on Mental Illness, 2014). Beyondthe economic benefits, studies show work is associated with enhanced self-esteem, life satisfaction, social functioning, and decreased symptoms (Bond, etal., 2001; Burns, et al., 2009; Kukla, Bond, & Xie, 2012), challenging the stillcommon belief that work is too stressful for people with psychiatric disabilities.

The last 20 years have brought major advancements in the development of effective strategies for helping people withpsychiatric disabilities get and keep jobs. One major strategy – a set of services known as supported employment (SE) – assistspeople with psychiatric disabilities to obtain competitive jobs, i.e. jobs in mainstream, integrated settings, available to anyone,that pay a prevailing wage; the evidence for the efficacy of SE is strong (Bond & Drake, 2014; Marshall, et al., 2014; Luciano,Drake, et al., 2014).

However, access to services is quite limited; only about 2% of the over 3 million people served by StateMental Health Authorities received evidence-based SE services in 2012 (www.nri-incdata.org).People with psychiatric disabilities face myriad of employment barriers, including social environment factors (e.g. stigma, lackof transportation); policy factors (e.g. complexities of disability benefit programs); as well as a lack of access to services andsupports.

Over the past several years, national and state level policies have increasingly focused on employment of people withdisabilities, laying a foundation for enhanced work opportunities for those with disabilities. In this policy brief, we discuss theservices and supports that people with psychiatric disabilities need to work and the barriers to employment that still remain, thecurrent legislative and policy opportunities for further promoting employment for people with psychiatric disabilities, and offerrecommendations for leveraging these opportunities.

Recommendations

Develop Guidance and Incentives for Medicaid Coverage of SE

One key to increasing employment among people with psychiatric disabilities is for more state Medicaid systems to offer SE to theseindividuals. While there are a number of Medicaid authorities available to pay for SE services – including a Section 1915(i) state planamendment, a Section 1115 demonstration waiver, managed care authorities (such as Section 1915(b)), as well as benefit plansavailable through the Medicaid expansion – many state officials are unaware of what may be covered under each option.

CMSshould ensure that states, as well as consumers and advocates understand the opportunities to use Medicaid to fund SE by publiclyclarifying (via guidance or other technical assistance documents) how SE services, and particularly the critical components of IPS, canbe covered under different authorities. Guidance should also describe how to coordinate the funding and delivery of SE betweenstate mental health and VR agencies, as well how to use other Medicaid programs, such as the Balancing Incentive Program, tofund services.

In addition, CMS should engage in a coordinated outreach and technical assistance effort to encourage states touse Medicaid to provide SE to people with psychiatric disabilities. Finally, Congress should consider creating incentives for statesto provide SE in their Medicaid programs, such as an enhanced federal reimbursement rate for SE services. Congress has takensimilar steps to promote the adoption of other Medicaid options, like the Section 1915(k) Community First Choice Option.

Maximize Opportunities in the Affordable Care Act

ACA provides another opportunity to support employment among people with disabilities. In states undertaking Medicaidexpansion, lower income individuals with psychiatric disabilities who want to work or are working will have access to healthinsurance without needing to apply for disability-based Medicaid; efforts should be made to ensure that people are aware of thisoption. Additionally, CMS should clarify that mental health parity applies to all ten essential health benefits specified through theACA, in particular the rehabilitation and habilitation benefits. Under these benefits, psychiatric rehabilitation services, includingSE, should be covered to the same degree as physical rehabilitation services (e.g. physical and occupational therapy) in plansavailable through state health insurance marketplaces, as well as through www.healthcare.gov.

Continue Service Innovations

There are opportunities to improve on current evidence-based SE practices, especially to address the educational and careerdevelopment needs of younger people with psychiatric disabilities. Early intervention supported employment may divert peoplefrom a lifetime of disability benefits and poverty. Disability employment researcher as well as funding agencies, such as NationalInstitute on Disability and Rehabilitation Research and National Institute of Mental Health should prioritize the developmentand testing of innovations to current approaches. Additionally, as part of an early intervention strategy, the Social SecurityAdministration should proactively make available information about and encourage the use of employment support services andwork incentives counseling when people first apply for DDSI and SSI to help people stay connected to the labor force and reducethe need for long-term disability benefit support.

Include People with Psychiatric Disabilities in Federal and State Employment Initiatives

There are a number of federal and state initiatives to expand employment opportunities for people with disabilities that couldsignificantly benefit people with psychiatric disabilities if they are included as a focus. At the federal level, DOL should ensurethat covered entities include people with psychiatric disabilities as part of their outreach, recruitment, and retention efforts underSection 503. As efforts proceed, DOL should track the rates of employment for people with psychiatric disabilities and take actionif such individuals are not benefitting from the regulations. At the state level, Employment First initiatives should be expandedto include not only individuals with ID/DD, as is the case in most states, but also people with psychiatric disabilities. In addition,expansion of SE for people with psychiatric disabilities should be part of states’ affirmative strategies for achieving compliancewith Olmstead and with the new HCBS regulations. Advocates should encourage states to take these actions, including bypushing for cross-disability Employment First initiatives, raising employment as part of states’ Olmstead efforts, and engagingwith states as they develop transition plans for their HCBS programs.

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