Early Intervention Can Help Cut Disability Costs

By Insurance.com Posted : 09/16/2004

Sun Financial Life, an international wealth management and insurance company, and the Integrated Benefits Institute (IBI), a non-profit benefits research organization located in San Francisco, states that employers who intervene soon after employees are first disabled can help them return to work faster and happier, while cutting disability-related costs.

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An IBI study of Steelcase, a Michigan manufacturer of office furniture, showed that worker satisfaction shot up 48 percent from 1997 to 2001 after the company introduced a disability management program that integrated aspects of workers compensation, short and long term disability, and the federal Family Medical Leave Act.

Employers who move quickly to communicate with and accommodate their disabled workers can help them return to work 20 percent faster, according to Sun Life's study, “Early Intervention Programs Can Speed Disabled Employees Back to Work.”

The reason Steelcase decided to try a program like this was because many employees were confused by traditional, disjointed employee benefits. Often, employees didn’t know who to call or who to turn to, resulting in employees feeling like they weren’t getting good service. In addition to the program, Steelcase also implemented an early return-to-work component for employees.

The Sun Life Return-to-Work Study
The Sun Life return-to-work study tracked the outcome of nearly 1,000, non-maternity, short-term disability claims. The claims were then divided into 2 groups – those who received early intervention disability, and those who did not. Available services included:

  • Claimant and physician coaching about return-to-work expectations
  • Employer education on disability issues
  • Identification of viable job alternatives, including light duty positions
  • Job site modifications to accommodate disabled workers
  • Medical intervention to ensure the employee was receiving appropriate medical care
  • Three-way coordination and communication between the employer, employee, and physician
  • Vocational counseling

Those who received early intervention worked with their employers and physicians to develop return-to-work plans and set expected return-to-work dates that were the earliest recovery date (to be determined by the physician or medical disability advisor). The final outcomes were compared, including the date the employee returned to work, whether it was full- or part-time, and if the claim transitioned into the long-term disability stage.

The study showed that the early intervention services yielded a high success rate in returning disable employees to work. Among the findings:

  • On average, employees receiving early intervention services returned to work 2.7 weeks sooner, saving the employer approximately $810 per claim
  • 47 percent more employees returned to work during the short term disability states with early intervention
  • 33 percent fewer claims extended into the long-term disability stage with early intervention

Services Make All the Difference
“Nine times out of 10, disabled workers stay out on disability longer than they have to — or don't return at all — due to employment problems rather than their medical problems,” says an official from John Hewitt & Associates Inc., a disability risk management and consulting firm with headquarters in Portland, Maine. “Usually it isn't the disability that prevents them from returning to work, but all kinds of extraneous job issues,” notes the official. “Maybe the company has just been sold, or the worker just got a new boss, or the worker's duties are changing and the employer hasn't put any kind of support mechanism in place. If the employer doesn't recognize that the disabled worker has value and they aren’t communicating this idea directly to the worker, then the employer risks losing that employee.”

Sun Life concluded that early intervention in short term disability cases can overcome two main barriers:

  • Psychological: The disabled employee hasn't mentally adjusted to not working; nor have they adjusted to their new lifestyle without work.
  • Work: A close relationship still exists between the employer and employee, and everyone remains focused on recovery and return to work. Before long, an employee can quickly become “out of sight, out of mind.”

Real Savings
“Employers who ignore the importance of early intervention risk higher absenteeism, higher staffing costs, and lower productivity,” says Sun Life. “Conversely, employers that implement early intervention programs can reap real savings.” In the long run, employers that don’t pay attention to potential rewards of return-to-work programs will pay a higher price than those that actually do use the programs.

According to a Sun Life’s study, with an average company of 10,000 employees, 600 employees can expect to receive short-term disability benefits in any given year. If just 10% of these employees receive early intervention services, that may mean an annual savings of $48,000 per year. This is based on a $300 weekly, short-term disability benefit payment that is multiplied by the shorter average disability duration of 2.7 weeks.

These findings complement those discovered by Watson-Wyatt Worldwide and the Washington Business Group on Health in their fourth annual survey report for 1999/2000 called “Staying@Work.” The study examined 178 major companies with an average of 13,500 workers and found that those which implement short term disability claim management activities — such as independent medical exams, behavioral health interventions, case management, and transitional return-to-work programs — reported savings between 18 percent and 19 percent.

If you’re interested in getting Disability insurance quotes, log onto Insurance.com. Here, you will be able to select and buy the Disability insurance that’s right for you.

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