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Disability Management In The Age Of An Aging Work Force

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Workers over age 55 could make up 19% of the U.S. work force in 2050, up from 13% at the turn of the millennium, according to the federal Bureau of Labor Statistics.

For employers, retaining loyal, fully trained employees longer can shorten pension payout periods and increase productivity.

For employees, remaining employed can be important for financial or social reasons. One study, by AARP, Washington, has shown that 70% of workers plan to work beyond their “normal” retirement age…or never retire at all.

As the work force ages, employers, employees, insurers and brokers will have to start thinking differently about disability among older workers. The idea that a medical disability past the age of 50 should automatically lead to early retirement no longer holds true.

Even for workers over 55, disability benefits should “bridge the gap” until return to work is possible, not serve as a bridge to early retirement.

Many large employers are trying to prevent disability as well as illness by introducing health and wellness programs. Simply providing effective weight reduction programs could have a big near-term impact on the health, productivity and disability costs of older employees. Employee assistance programs may also prevent disability, by helping workers tackle problems such as depression and alcoholism.

Some employers that already are facing labor shortages, such as hospitals, are trying to retain older workers by designing career paths that let older workers move into less physically demanding positions as they age.

Employers also can learn to use modest workplace accommodations to help employees with visual and hearing impairments and mobility problems. Inexpensive software, such as a screen magnifier or ZoomText, can help workers with visual impairments. To accommodate an employee with mobility problems, an employer may get the job done for free, simply by creating a new handicapped parking spot or relocating an employee’s desk.

Group disability insurers and brokers can reach out to older workers, by designing plans that offer more flexibility and a wider range of options. Dependent care benefits, for instance, particularly can be beneficial to disabled older employees who are trying to care for aging parents while paying children’s college expenses.

Carefully managing the return-to-work process is another way to keep older workers working. Communicating early and often can head off many of the vocational and emotionally charged issues that frequently accompany a disability. Simply calling older claimants and explaining that they probably will be returning to work may help the claimants understand the insurer’s expectations early in the claims process.

The good news is that, even though boomers are growing older, they seem to be relatively healthy.

Recent data mining in the Prudential database suggests that the smaller baby bust generation, “Generation X,” may cause more problems.

Insurers have known for some time that Gen X employees have a higher rate of short-term disability claims than their baby boomer colleagues, but the newest numbers seem to show that Gen X employees also have a higher propensity of severity in their long-term disability claims. Gen X claimants seem to have longer average long-term disability durations for most non-pregnancy-related diagnoses than the baby boomers and, in a few cases, than even the War Babies who are 20 or 30 years older.

If that trend continues, employees who are now in their 30s and early 40s may soon challenge efforts to control disability claims costs.