Greg Poulakos

In this uncertain economic environment, employers of all sizes are looking for a higher return on their benefit dollars, and brokers play an important role in helping their clients achieve that goal. One key strategy includes advising businesses to look at programs that integrate medical and disability management benefits.

Under these programs, health and disability benefit plans are bundled with a single carrier. A team of highly trained nurse case managers coordinate medical care and identify resources for financial and other assistance for employees who are out of work on disability. The goal is to facilitate a speedy recovery and a safe return to work. For employers, integrated programs help get sick or injured workers back on the job as soon as is feasible and help lower costs.

Providing an Advocate
Disability costs have become one of the largest expenses facing companies today. According to a recent survey by the National Business Group on Health, the incidence of short term disability claims among large- and mid-sized employers in 2009 was 6.7 claims per 100 covered employees, with an average cost of $296 per employee. More than three long term disability claims per 1,000 employees were filed in 2009 at an average cost of $13,226-a 25 percent increase from the previous year.¹

Besides the direct costs due to employee absences, there are other indirect costs, including temporary replacement labor and training and/or overtime for employees assuming the disabled employee’s duties. These costs alone can be two to three times the cost of the employee’s salary.²

Lost opportunity costs are another worry. Savvy brokers know that a client’s missed service call or product delivery delay due to an absent worker can result in unhappy customers that can ultimately affect the bottom line.

Companies that purchase health benefits and disability plans from different carriers often miss the opportunity to potentially reduce these costs. Once employees go on disability, for reasons that may include back pain, high blood pressure, cancer or other conditions, they are typically left on their own. Those suffering with pain in their backs ought to consider contacting chiropractors for back pain to see how best to tackle the problem. With no intervention by a health specialist, the resulting emotional stress may take its toll-leading to missed doctor appointments, forgotten medications and delayed treatment.

However, by combining medical and disability benefits under one roof, the case manager can serve as that employee’s personal advocate, helping navigate the medical, financial and logistical challenges of being away from work without a paycheck.

Disability Claims Drive Health Costs
Grouping disability and medical claims management is a logical choice. After all, many of the conditions driving disability claim incidence are often the very same drivers of medical costs.

The most common causes of long term disability are: injuries to muscles, bones or joints; heart and blood vessel problems; spinal system diseases; cancer; injuries and poisoning; and mental disorders.³

Indeed, a small portion of employees has a large influence on direct and indirect health care costs. For example, just 10 percent of disability claims account for more than one half of total medical and disability costs. And the total health-related productivity costs of presenteeism and absenteeism are 200 to 300 percent greater than medical and pharmacy costs alone.⁴

Cutting Disability Duration
To quantify the savings that can be achieved by integrating the management of health and disability claims, UnitedHealthcare conducted a study in which it sampled disability claims from a pool of more than 80,000 commercial plan participants enrolled in its integrated program and compared them to individuals in non-integrated programs.

The results were encouraging for employees and their employers. Plan participants in the integrated program were found to be more engaged in decisions about their health and returned to work sooner than non-integrated individuals.

The amount of time employees in the integrated program were out of work was reduced by more than 13 percent. Using the data from the survey, UnitedHealthcare estimates that by using an integrated program, a company of 250 employees-each earning an average salary of $60,000 and with a disability benefit equal to two-thirds of salary-could see a total annual savings of $15,000 to $47,000 in disability benefits and $32,000 in productivity savings. Larger firms would see even higher annual savings.

Medical and Financial Support
Integrated medical and disability management programs are typically voluntary for employees. Once the employee files a disability claim, the carrier’s claims office notifies a case manager who calls the employee about participating in the program.

The case manager, usually a registered nurse, maintains a confidential relationship with the employee regarding the nature of the illness and treatment. Case managers often develop a rapport with the disabled employees-answering questions about their condition, discussing treatment options, encouraging them to comply with their medication regimen, and generally monitoring their progress. If warranted, the case manager will refer the employee to a physical or occupational therapist, social worker or other mental health professional.

When researching integrated programs, brokers should look for carriers that have the resources to offer both medical and non-medical support under one roof. For example, a disabled employee who lives paycheck to paycheck, waiting even one week for the first disability benefits check to arrive can become a financial hardship. In situations such as this, a case manager can quickly refer the disabled employee to credible, local organizations that can fill a variety of needs including hunger relief, transportation to doctors’ appointments, low-cost medications, and free or discounted housecleaning services.

Personal Intervention Yields Results
Consider the case of a 40-year-old clerical worker whose chronic back pain prevented her from sitting at her desk at work. She stopped working and went on short term disability leave. She assumed that since her condition did not improve after several weeks of physical therapy, surgery was the next option. When experiencing chronic back pain, it might be worth looking into it more. A lot of people suffering from back pain seem to just assume it will go away, however, it could be something more serious. Back pain is often one of the most common symptoms for people suffering with spinal problems, such as scoliosis. When diagnosed with scoliosis, some people find it painful enough to consider surgery. This is never an easy decision, however, it is made easier after talking to an orthopedic surgeon, like the ones at Southwest Scoliosis Institute (click here). In some cases, surgery is the only option to allow people to live a normal life.

After a consultation with her nurse case manager-which was part of the benefit of her company’s integrated medical and disability management program-the case manager recommended that the clerical worker may be able to return to work and avoid surgery if she could both sit and stand at her work station. The solution (to which her employer readily agreed) was to provide her with a special desk that can be raised, thereby enabling her to stand while working, to relieve pressure in her back. Thanks to the intervention of the case manager, the employee was back at work and fully productive in a matter of weeks, rather than months; plus she also avoided costly surgery.

Programs that offer coordinated care by health care professionals for workers on disability leave can make the difference between a few days of missed work and a prolonged period of disability. For employees, these interventions help maximize their benefits; and for employers, they can add up to substantial savings. Brokers can greatly enhance their value by recommending to their clients a carrier that offers a proven program that jointly manages medical and disability claims.

1.?National Business Group on Health, “Recession Fueled Decline in Short and Long Term Disability Claims in 2009,” news release January 18, 2011 (www.businessgrouphealth.org/pressrelease.cfm?ID=167).
2.?OptumHealth Disability Solutions, “Optimizing Health and Well-Being, 2011, citing Journal of Occupational and Environmental Medicine, January 2003; 45(1):5-14 (www.optumhealth.com/content/attachments/Disability_Solutions_flyer.pdf).
3.?AHIP Guide to Disability Income Insurance, 2009 (www.ahip.org/content/fileviewer.aspx?docid=352&linkid=3621).
4.?”Impact of Integrating Health and Disability Data,” Integrated Benefits Institute, August 2006; and “Health and Productivity as a Business Strategy: A Multiemployer Study,” Journal of Occupational and Environmental Medicine, Volume 51, Number 4, April 2009.