OBJECTIVES: This analysis quantifies the difference in employee health benefits cost between employees with at least one dependent with depression and employees with no depressed dependents. Healthcare, sick leave, short- and long-term disability and workers' compensation claims data are used along with employee population data to quantify the increased employee costs associated with having a dependent with depression. METHODS: Using data from 1998, this study examines 42,000 geographically-disperse employees. An employee was defined to have a dependent with depression if any of the employee's dependents had a healthcare claim during 1998 with a primary ICD9 code signifying depression. Employees without any dependents were excluded from the analysis. Censored (tobit) regression models were used to control for the impacts of age, gender, exempt status, number of covered dependents, and regional distribution and to isolate the impact of having a depressed dependent on the health benefits costs incurred by the employee. RESULTS: Employees with depressed dependents incurred 99% higher healthcare costs (excluding dependent healthcare costs) (p<0.0001) and 27% higher sick leave costs (p<0.01) than did employees without depressed dependents. CONCLUSIONS: An employee whose dependent has depression has significantly higher health benefits costs than an employee whose dependents do not have depression. Thus, employers must recognize the impact of dependent health issues on employee health and productivity costs. Employers may use this information to design or refine EAP and other mental health programs to account for issues associated with the burden of care.