Mental Health Claims Reshape Workers’ Comp: PTSD and Stress-Only Coverage Expands

The rise of ‘mental-only’ claims in workers’ compensation is prompting a fundamental shift in how psychological injuries are assessed, adjudicated, and compensated. Traditionally limited to cases involving physical injury, more states are now recognizing mental health conditions like PTSD as standalone compensable claims—particularly for first responders and, increasingly, for broader worker categories.

This trend, accelerated by heightened mental health awareness post-COVID, brings both opportunities and concerns for insurance claims adjusters. While it acknowledges the reality of trauma-related psychological harm, it also opens the door to costlier and more complex claims, often lacking the objective evidence seen in physical injuries. States like Connecticut and New York are leading the expansion, potentially signaling a nationwide pivot.

Claims adjusters will need to navigate ambiguous legislative language, scrutinize diagnostic standards, and assess the causal relationship between stressors and employment—all while managing provider shortages and extended recovery timelines. The challenge will be balancing legitimacy with liability, especially as lawmakers and courts refine the definitions of traumatic events and workplace stress.

From a financial standpoint, the broadening of compensable conditions is likely to increase loss ratios and administrative burdens, particularly in states that do not impose strict guidelines. Adjusters should expect evolving best practices in investigating, documenting, and defending mental health claims. Understanding the nuances of these laws will be critical as the mental health frontier becomes a permanent fixture in workers’ comp.