Magazine article Risk Management

New Trends and Approaches: Keeping Track of Disability Management

Magazine article Risk Management

New Trends and Approaches: Keeping Track of Disability Management

Article excerpt

Employers have greatly changed the way they provide and manage medical benefits to their employees. The challenge of making similar changes to disability coverage, however, has only begun to be realized. In the workplace, managing disability claims and rehabilitative programs carries hidden costs and demands close management attention. Integrated disability management-returning people to work and keeping them there-is critical to maintaining productivity in the workplace. A recent survey by Watson Wyatt, a management consulting firm, examined how 152 U.S. companies are managing their programs and costs and uncovered a number of trends changing disability management.

When compared to payroll, retirement plans or group medical, the costs of disability benefits seem small. According to the Watson Wyatt survey, average direct costs for short- and longterm disability and workers' compensation total 4 percent of payroll. The indirect costs of disability are harder to measure and can be much greater. Some of these costs may surface long after an incident and perhaps not be attributed to disability at all.

When an employee is absent for any extended period, employers face the cost of overtime pay for other employees who must handle the increased workload. Temporary workers are often hired, raising these costs further. It should be no surprise that improving return-to-work results is the leading goal of disability management programs among the surveyed employers.

Trends in Disability Management

Survey participants identified several trends as having an affect on disability costs, including the aging of the baby boomers; a growing list of disabling conditions; regulatory mandates; effects of corporate downsizing; and perceptions about the quality or effectiveness of managed medical care.

Recognizing these trends is the first step in addressing them. For example, the aging of the baby boomers, now in their early 50s, will affect the prevalence and character of disability claims. Depending upon their illness or injury, older workers may take a longer time to recover or be reluctant to return to work in hope of early retirement. Employers should use this knowledge to effect transitional employment programs and review their provisions for prevention and rehabilitation. On the other hand, employers can expect decreases in maternity absences as a large percentage of the female work force advances beyond normal child-bearing years.

New disability categories that have been recognized only recently complicate efforts to manage this expense. They include chronic fatigue syndrome, carpal tunnel and repetitive motion injuries, stress- and anxiety-related disabilities and chemical sensitivity. …

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