Back in the 1980s and early 1990s, increases in disability claims seemed to go hand in hand with increases in unemployment rates. Disability insurers responded by changing plan designs and tightening procedures for handling claims.
Today, disability insurers, benefits administrators and other companies are promoting another defensive measure: Programs for analyzing absenteeism and referring employees who have trouble with showing up for work to counseling and health coaching programs.
Some of the companies announcing new or expanded absence management initiatives in the past 2 years include Aetna Inc., Hartford; Assurant Inc., New York; Buck Consultants, New York, a unit of Affiliated Computer Services Inc., Dallas; Guardian Life Insurance Company of America, New York; and Nationwide Better Health, a unit of Nationwide Mutual Insurance Company, Columbus, Ohio.
Disability insurers “understand that it’s not just about paying the claims,” says Jeff Harner, a vice president at Nationwide Better Health, a health and productivity management unit of Nationwide Mutual Insurance Company, Columbus, Ohio. “It’s about what you try to do to prevent them.”
Private disability insurers pay about $8 billion in long-term disability benefits to claimants each year, according to the Council for Disability Awareness, Portland, Maine, and employers suffer many billions of dollars in additional costs related to illness, short-term disability and long-term disability.
Kronos Inc., Chelmsford, Mass., a human resources company that is marketing productivity analysis systems, found when it commissioned a recent survey of 455 U.S. employers that employee absences of all kinds cost the equivalent of 36% of base payroll, and unplanned absences cost about 9% of base payroll.
“It’s a little bit early to tell” how the recent economic turmoil has affected absenteeism costs or disability costs, Harner says.
Hurricane Ike severely disrupted employers in Galveston, Texas, and other communities for weeks, and it also affected business schedules and attendance in some other communities in the South and Southeast by affecting supplies of gasoline.
Away from the areas hit by storms, economic stress may be improving productivity at some employers, by spurring employees to show up for work and do their best once they are at work, experts say.
But Harner says an analysis of disability claims at a large client employer that implemented layoffs in 2007 showed that mental and nervous claims increased significantly at the locations undergoing layoffs.
Researchers at the American Psychological Association, New York, have reported survey results indicating that U.S. adults felt far more stress in September than in April.
“We think that’s really important,” Harner says.