Benefits Column

Integrating Employee Benefits

Employers are revisiting a mid-'80s concept that integrated health and disability management. While such programs may not result in reduced long-term-disability claims, companies may find their workers more often opting to engage in wellness programs as well as reporting improved experiences and turnaround on claim decisions.

Tuesday, July 5, 2011
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Thomas Goetz, executive editor of Wired magazine, posted an interesting thought on Twitter recently: "In typical academic fashion, each discipline reinvents the methodology and rephrases the terminology."

In other words, as my grandmother used to say, everything old is new again.

Goetz's reflection reminded me of an ongoing exchange my colleague and friend, Tracie Foster, and I are having related to an upcoming panel we're part of at the Disability Management Employer Coalition's annual international conference.

It appears to us that old ideas are being repackaged -- at least as they relate to employee health and absence management.

Our conversation began around a slide I created in 2000, about the evolution of managed care. When Foster looked at it, she told me, "Integrated health and disability management is not new. In the mid-'80s, short-term disability was packaged with medical claims and was handled by the same claims examiner."

Foster, director of product and business development for Anthem Life, went on to say that, in the late '80s, the concept evolved to remove STD from the medical product and to integrate it with long-term-disability insurance.

It was thought the focused management of STD claims would lead to shorter employee absences and, in turn, decrease LTD incidence.

The hypothesis made sense, but the desired outcome never materialized. Long-term-disability claim incidence went up when STD and LTD management was combined.

There are lots of theories, although no definitive explanation, as to why this happened. The most common speculation is that both STD and the first one to two years of LTD typically use the same contractual definition of disability -- own occupation.

If the same carrier or third-party administrator manages both the STD and LTD claim, it is difficult to deny the pending LTD claim.

While there are good reasons to maintain combined STD and LTD claim management -- including an improved service experience for the employee -- reduced LTD incidence is not one of them.

So, it's interesting that, in the employee-benefits world, we're migrating back to integrated health and disability management. It's 1985 all over again.

Last year, I profiled several approaches to integrated medical and disability management, including Anthem Life's Productivity Solutions.

Thirteen months later, Foster shared three key learnings.

First, employers see value in integrating the health and STD products and other health-related programs as well -- pre-certification, medical-case management, behavioral-health case management, transplant team, disease management, wellness programs and health coaching.

Second, Foster says, "Our biggest learning is the critical importance of implementation and communication for both the employer and the insurance carrier." Employees have to understand what to expect, and there must be "touch points" within the integrated programs so the employee experience is flawless.

Third, while it's too early to know definitely whether the desired outcomes of reduced disability and medical costs will be achieved, there are other positive results.

Employees in integrated-benefits programs engage in wellness programs more often, report an improved member experience and receive improved turnaround on claim decisions.

The initial results from Productivity Solutions were enough for Ryan Roh, manager for WellPoint, Inc.'s leave of absence administration, to begin moving to an integrated program for the insurance carrier's own employees.

Roh, based in Indianapolis, plans to systematically transition WellPoint's 37,000 employees to the program during the next two to three years.

"You only get one chance to do this right," Roh says. That's why he's working now through the discovery process and implementation plan, with the goal of inaugurating a pilot in three states before year-end.

"It's almost impossible to roll this program out globally," he says.

Roh plans to follow the pilot group for six to nine months and compare the results with a control population from other WellPoint locations.

The move to integrated benefits is a natural evolution from May 2008, he says, when WellPoint integrated its absence-management system for family and medical leave and STD claims with Americans with Disabilities Act oversight onto a web-based platform.

This move allowed the in-house team to manage claims through the system -- instead of paper files and spreadsheets -- and generate meaningful reports.

In January 2010, WellPoint went a step further. They moved from a claims-management approach based upon employee locations to a model based on claim type and intricacy -- positively impacting average STD claim duration.

Roh anticipates that the positive results WellPoint is experiencing with absence-management, accommodation and return-to-work will be further enhanced by the integration of the health programs.

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While WellPoint is beginning this journey to integrate these programs, Pitney Bowes has gone far beyond most employers.

Hilary Mitchell, director of absences at the Stamford, Conn.-based company, says Pitney Bowes moved from an outsourced disability-management model in the 1980s to an in-house program, resulting in better communication and financial results.

"We look at every touch point as an opportunity for benefits and case-management integration," Mitchell says. "There is communication among the health plans, HR, legal, workers' compensation and STD areas."

The company made the transition to integrated management easier by scaling down the number of health-plan vendors from a dozen to three major health plans, she says. 

That's only part of Pitney Bowes' integrated benefits programs.

Last year, I spent time with Andrew Gold, Pitney Bowes' executive director of global benefits planning, when writing about setting up worksite wellness programs.

But, Gold's expansive vision includes the creation of "Project Living" -- an "action-based" approach to health management, which simultaneously looks at the way employees and their families keep themselves well "financially, physically and emotionally."

Recently, Pitney Bowes introduced "PB Cares" -- a service offering free financial and emotional counseling to employees with terminal illnesses and their families. The company also offers financial counseling to employees on long-term disability to help them decide whether it is economically better for them to remain on LTD or to consider retirement.

The company is also piloting a program that targets pregnant employees who are at risk of leaving their positions after they deliver their children. 

Finally, Pitney Bowes is combining community volunteer opportunities with workers' compensation. When an employee cannot be easily accommodated to return to work, the associate can volunteer at a community-based charity.

The employees receive their full salaries, the employer closes the workers' compensation claims and the charity has access to new volunteers to help with its programs.

So, while more employers are moving back to the future via integrated health and absence programs, it's not the same-old, same-old. We'll have to wait and see whether Thomas Goetz will be impressed.

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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