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Benefits Column

Selling the Problem of Absence

Because most people mistakenly associate disability with catastrophic bodily injury, it's difficult to engage HR leaders and employees alike in dialogues about work-related absence and the need for income protection.

Monday, December 20, 2010
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I've been involved in managing absences most of my career. At first, I centered my efforts on returning elite athletes to their playing fields. When we added an "industrial-athlete program" to our sports-medicine services, I focused on bringing employees back to their jobs.

Then, to paraphrase Robert Frost, way led on to way, and I found myself working within the disability-insurance industry.

I never thought I'd work for an insurance company after four college summers spent changing beneficiary designations and reassigning ownership of life-insurance policies. That was a road too well traveled.

But I was enticed by the opportunity to influence the quality of healthcare that employees received and to persuade employers to take their staffs back to work after an illness or injury sidelined them.

Once entrenched in my new field of work, I quickly figured out that no one liked to talk about disability, never mind disability insurance. That wasn't surprising given that, when you use the word -- disability -- even healthcare professionals immediately picture traumatic physical damage such as spinal cord injuries and not people with heart disease.

The Council for Disability Awareness captured a snapshot of employee beliefs regarding disability and the odds of becoming disabled in CDA's 2010 Consumer Disability Awareness Survey (which will be published in January 2011).

"Most employees take a very catastrophic view of disability," says Barry Lundquist, president of CDA. "They believe that disability is most likely caused by serious accidents, strokes, heart attacks and paralysis."

The reality, however, is that more than 90 percent of long-term disability claims are caused by chronic illnesses, which are often related to lifestyle choices and personal behaviors.

Lundquist adds that, while 83 percent of workers believe that disability could happen to anyone at any time, less than 10 percent of employees believe it will happen to them.

Statistically, most employees who can't work because of an illness or injury are not using wheelchairs. In fact, some of them aren't even sick.

Depending upon the employee demographics, as many as one-third of the absent workers could simply be pregnant. But they are also out of work -- on average -- about two weeks before delivery and six weeks afterward.

If they take family-medical leave along with paid time off, salary continuation, sick time or short-term disability, these employees may be out for 12 weeks in most cities and states; sometimes even longer if they develop pregnancy-related complications.

That time away from work is disruptive to a company.

Yet, because most people mistakenly associate disability with bodily injuries, it's difficult to engage HR leaders and employees alike in dialogues about work-related absence and the need for income protection.

That's why we need to reframe the workplace-absence discussion.

But if HR leaders want to plan for the impact of absence on the business and the employee, they need to be able to forecast the magnitude of the problem.

"On average, [an HR leader] can expect eight percent of employees to be out of work on short-term disability on an annual basis," says Leo Tinkham, vice president of marketing at the Gen Re Life Corp., which performs industry benchmark surveys, including disability-market research.

"This percentage can move up or down depending upon how long the employee has to wait for benefits to begin [known as the elimination period] and the benefit percentage [or the proportion of the worker's income that's replaced] as well as the employer's industry," he says.

Tinkham notes that, once the average employee is out of work on a STD claim, an employer can foresee an absence of 52 to 60 calendar days -- from the day the person becomes disabled until the benefits end.

When considering potential benefit-design strategies that may help control costs, Katie Dunnington has some research-based suggestions for you.

Dunnington, an assistant vice president of wellness, absence and productivity at CIGNA, provided an early peek at the most extensive study the carrier has undertaken on absence rates and related costs. (Full disclosure: CIGNA is a client of mine, but I had no involvement in this study.)

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CIGNA found that employers covered by the carrier's combined disability and medical program experienced fewer "total disability days" and incurred lower costs than those who only had their disability coverage.

"The average duration of short-term disability claims, when we had both the medical and disability coverage, was 13 days shorter -- 49 days -- compared with 62 days when CIGNA only managed the short-term disability," Dunnington says.

CIGNA's experience is similar to the results Anthem Life is seeing with their integrated medical/disability approach.

It seems there is increasing evidence that taking a holistic viewpoint of an employee's benefit experience is not only more user-friendly for workers, but it also provides employers with enhanced benefit-plan performance.

CIGNA also found an interesting connection between an employee's use of family medical leave and short-term-disability incidence.

"Employees who file a FML claim for their own medical condition are five times more likely to become disabled on STD," Dunnington says. "And employees who use FML to care for a family member are 50 percent more likely to eventually have a behavioral health-related STD claim."

To help support employees during such stressful times, HR leaders should consider initiating a program of providing just-in-time referrals to the work/life or employee-assistance programs when staff members file for family medical leave.

So, it turns out, that the problems associated with work absence are largely misunderstood. Disability happens more often than we realize, is not generally related to a catastrophic event and can even be associated to a happy time, such as having a baby.

HR executives and employees alike need to prepare for the possibility of disability by discussing the importance of income protection as well as by integrating an absence-management strategy into an organization's overall employee-benefits-management plan.

Carol Harnett is a widely respected consultant, speaker, writer and trendspotter in the fields of employee benefits, health and productivity management, health and performance innovation, and value-based health. Follow her on Twitter via @carolharnett and on her video blog, The Work.Love.Play.Daily.

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