Insurers would love to see their own group disability business stick and competitors’ cases pry off easily.
Matt Ceurvels, director of product management and development at the U.S. arm of Sun Life Financial Group Inc. (TSX:SLF), says the proliferation of state and federal programs that require careful employee time tracking may be making all group benefits business stickier, including group disability business.
Ceurvels talked about that possibility recently during an interview about the current state of the group disability market.
Sun Life has been an active, enthusiastic supporter of this month’s Disability Insurance Awareness Month (DIAM) outreach campaign.
Ceurvels spoke in connection with the DIAM effort, but he said trying to separate conversations about group disability insurance programs and absence-management programs is no longer possible. ”The conversation has to be about both,” Ceurvels said.
Sun Life and many of its competitors in the group disability market have been developing absence-management programs.
Ceurvels said that, from his perspective, the main reason for a disability insurer to get into the absence-management business is that a disability claim usually starts with an absence. A claim often involves use of Family and Medical Leave Act (FMLA) leave and other official leave programs, he added.
Today, the employer shared responsibility, or coverage mandate, provisions in the Patient Protection and Affordable Care Act (PPACA) make formal employee counting a critical activity for employers with as few as 50 workers. Some other federal programs, such as the Americans with Disabilities Act (ADA), apply to employers with as few as 15 employees.
In the past, the typical absence-management services client had more than 1,000 employees, but, today, Ceurvels said, because of the new regulatory challenges, the number of smaller absence-management clients is growing.
For both the employees and the employers, the ideal is to have benefits and absence-management programs that are as tightly integrated as possible, Ceurvels said. Otherwise, he said, users might have to keep track of many different user names and passwords for many different websites. Human resources or benefits employees might have to feed similar data into slightly but annoyingly different systems over and over.
For a broker, insurer or benefit plan administrator, maximizing integration starts with a careful, detailed process for getting an employer’s employee and dependent information into one database, Ceurvels said.
Because onboarding a group benefits case takes so much time and effort, the cost of starting the process all over again with another benefits provider may increase persistency rates, by making employer groups somewhat more likely to stay with the incumbent providers than they were in the past, Ceurvels said.
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