Absence management programs appear to have become an indelible part of the employer services market.
When Hewitt Associates Inc., Lincolnshire, Ill., polled about 600 large employers a few months ago, it found that 19% already have absence management programs and 56% plan to add absence management programs in the next three to five years.
Group disability insurers have been using their expertise at managing disability-related leave to go after a piece of the action.
The Standard Insurance Company unit of StanCorp Financial Group Inc., Portland, Ore., started an absence management services unit for employers about a year ago.
The group insurance arm of Prudential Financial Inc., Newark, N.J., opened an office in Scottsdale, Ariz., and hired about 50 people there to accommodate growth in its disability and absence management services business.
Hartford Financial Services Group Inc., Hartford, announced in March that it is offering a single, integrated program that can manage absences from workers compensation claims along with those for short-term illness, disability, and leave programs.
Other disability insurers and DI service firms that have entered the absence management market since 2008 include American International Group Inc., New York; Custom Disability Solutions, South Portland, Maine, a unit of Reliance Standard Life Insurance Company, Philadelphia; Guardian Life Insurance Company of America, New York; and UnitedHealth Group Inc., Minnetonka, Minn.
The Disability Management Employer Coalition, San Diego, reflects the growing interest in the absence management market within the agenda for its upcoming annual conference in San Diego. The conference is set to cover such topics as disability and absence management basics, managing intermittent leaves and absence and disability management in “unprecedented times.”
Absence management is hot because “employers are looking for a partner,” says Kimberly Mashburn, a vice president of strategic partnerships in Prudential’s group insurance business.
For years, employers have had to deal with vacation time, sick days, short-term disability leave, and leaves resulting from on-the-job injuries, jury duty and bereavement. Now, because of the wars in Iraq and Afghanistan, employers also are seeing greater and more extended use of federal and state military leave laws. They also are seeing states adopt new leave mandates covering residents.
California was the first state to adopt a paid family leave mandate in 2004. Washington State and New Jersey also have created paid family leave programs.
States also have adopted a variety of paid and unpaid parent-teacher conference leave programs.
The U.S. Department of Labor recently issued guidance in an effort to ensure that workers cannot use the Family Medical and Leave Act leave simply because they have ordinary bad colds.
In the past, workers could qualify for FMLA leave if they suffered three consecutive days of incapacity and visited a health care provider twice. Now, the Labor Department says workers must make the first visit to the provider within seven days of becoming incapacitated and a second visit in a 30-day period.
Meanwhile, employers continue to suspect that some employees are gaming the system. Many now permit employees to schedule paid time off for reasons other than dealing with an illness. But 32% of 4,721 U.S. workers polled for CareerBuilder, Chicago, in late 2009, said they had called in sick when they weren’t at least once during the previous year and 28% of 3,163 U.S. hiring managers polled said they thought more employees were using fake excuses to justify absences resulting from recession-related stress and burnout.
“It’s become very apparent that this is exceedingly complicated,” Prudential’s Mashburn says.
Even if an employer’s human resources managers understand the laws and regulations, the employer may prefer to farm out leave administration because it does not want its own employees handling medical information that may be subject to strict federal privacy protection rules, Mashburn says.
For group disability producers, the easiest way to build awareness of the absence management services their carriers offer may be to give employers bulletins about the topic and recruit benefits lawyers to talk about it to employer groups.
Producers also can bring in experts from organizations such as disability insurers’ absence management units, to conduct leave program reviews.
Often, policies are not up to date, and managers are unfamiliar with the finer points of the companies’ leave policies, Mashburn says.