Where Does Disability Insurance Fit On The Health/Productivity Continuum?

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IDM, TAM, HPM–what do these acronyms stand for? What do they mean? And where does your disability product fit along the spectrum?

It helps to know because over the last several years, the U.S. market has seen employer interest move along the continuum of approaches. Employers have gone from integrated disability management (IDM) toward total absence management (TAM), and beyond to overall workforce health and productivity (HPM) solutions.

In any given conversation, you might hear all three acronyms being used interchangeably.

Or, if speaking with someone who really understands the issues, you might find the person using each acronym to mean something different.

If you are approaching employers with disability products, you need to know which term to use and when. Here is a refresher to help.

IDM refers to the concept of integrating the various pieces of disability management to achieve cost and administrative efficiencies for the employer, and a better “customer experience” for the employee.

The typical program elements included in IDM are short and long term disability, workers compensation coverage, and family medical leave administration.

By coordinating these three program elements through a single intake source, with immediate triage to the appropriate claims administrator, employers gain several benefits.

They can report a claim using one simple communications process. They can track both occupational and non-occupational absences to eliminate duplication of coverage. They can comply with state and federal family medical leave laws of notification and certification. And they can eliminate reliance on the employee in determining what type of claim they have.

In addition, IDM programs typically encourage early intervention, provide opportunities for common case management across occupational and non-occupational claims, and create an environment where formal return-to-work programs can be implemented throughout the organization.

Further, and perhaps most important, this integration allows employers to track effectively the data that is related to all these areas, establish a baseline against which to measure themselves, identify trends occurring throughout the organization and subsequently develop programs for improvement over time.

TAM programs incorporate all the elements, programs and processes of IDM programs but expand on them to include all employee time away from work.

Examples of programs that might be included are leave of absence (e.g., personal leave, military leave, jury duty), intermittent leave, vacation time and incidental sick time. These programs can go as far as measuring all employee absence from day one. This allows supervisors and managers to plan proactively for absence, use budgets more effectively for replacement workers and make the “present” team as productive as possible.

HPM comes into play when employers start using all the data, information, programs and processes to improve the overall health of their workforce. The goal is to make their environment as productive as possible.

In addition to the elements of IDM and TAM previously discussed, this concept also incorporates health management, demand management and disease management initiatives.

Organizational commitment to these programs, coupled with incentives for participation, results in appropriate screening of employees for various health risks and ensures triage to effective intervention programs.

It goes without saying that employers face many pressures today. They must contend with the rising costs of health care, the aging population, the decrease in new job entrants, the “hard” property-casualty insurance market and increased economic pressures, to name a few.

All these factors are driving employers toward implementing HPM programs. Therefore, vendors need to consider how their current products and services are positioned along the HPM continuum.

From a best practices standpoint, for instance, an IDM vendor will offer integrated STD, LTD and FML administration, with links to workers compensation through their own capabilities or that of a partner.

A TAM vendor will go further, to add day-one absence tracking capability through its own system and/or links to employer timekeeping systems.

HPM programs build on the capabilities of both the IDM and TAM vendors by closely coordinating and partnering with managed care and other specialty vendors.

To be successful in this marketplace, vendors need to understand where they fall along the HPM continuum. They need to have a firm grasp on how their offerings stack up against the competition, understand the “gaps” between their capabilities and employer demand, and determine if they will build, buy or partner to close the gaps.

Karen Trumbull English, ARM, CPCU, is a senior consultant in the Boston office of Watson Wyatt. Her e-mail address is karen.english@ifs.watsonwyatt.com.


Reproduced from National Underwriter Edition, June 23, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.