Researcher: Give Employers More Skin in SSDI Game

“The reforms required all Dutch firms to fund the first two years of disability benefits to their workers and to pay an experience-rated disability tax based on the number of workers they subsequently moved onto the long-term Dutch disability insurance program,” Burkhauser said. “These reforms provided incentives for employers, who are in the best position to offer accommodation and rehabilitation, to do so in lieu of moving workers with disabilities onto cash transfers.”

Employers responded by buying more private disability insurance and also by improving efforts to get workers with disabilities back to work, Burkhauser said.

In the United States, Burkhauser said, SSDI program managers have been trying to give beneficiaries more incentives to return to work and to punish beneficiaries who are malingering.

The country might be better off by simply requiring all employers to provide 2 years of short-term disability (STD) insurance and giving those employers a financial incentive to get workers back to work, Burkhauser said.

In that system, he said, private STD carriers could do more to help with return-to-work efforts. “

Another strategy would be to make employers that fail to do a good job of getting workers back to work pay higher SSDI-linked payroll taxes, Burkhauser said.

“This is currently the system used to fund state workers’ compensation benefits,” Burkhauser said.

“Alternatively, employers who provide short-term private disability insurance for employees and whose private insurance agents cooperate with SSDI gatekeepers in managing their cases could be granted a reduction in SSDI tax rates, while firms that did not offer such private insurance could be charged higher SSDI tax rates,” Burkhauser said.

Burkhauser concluded that the United States has to get past the costly assumption that people who have disabilities are not capable of working.