Disability management — back to basics

An effective return-to-work program will save money.

Over the past several years, there has been a remarkable rise in the awareness of effective disability management programs. Because of the broad spectrum of services available, those in the disability management field are being inundated with information. Reviewing the basics will be helpful especially to those who are planning to implement a disability management program in the near future.

In Ann Leckie’s book, Disability Claims Management, disability management is defined as, “the careful control and measure of disability-related concerns in regard to decreases in time away from work when combined with medically valid return-to-work programs. Such programs can lead to lower costs, improved health and increased productivity.”

The goal in designing an effective program is to achieve the best results in managing short-term, long-term and workers’ compensation disability claims in both human and financial terms.

An effective disability management program recognizes the employee as the company’s greatest asset and includes in its program a return-to-work or accommodation component aimed at returning a disabled employee to work quickly and safely as part of the healing process.

The disabled employee’s world becomes complex and often confusing. The task of helping injured or ill employees through this maze falls to the disability management specialist.

The best approach is one that attacks claims issues quickly, systematically and accurately. This approach leads to lower claims costs that ultimately contribute to improved employee health, increased productivity and lower workers’ compensation and insurance premiums.

The disability management specialist should remember:

•most employees are not experts in dealing with this type of situation;

•most employees will be overwhelmed by all the help;

•the goal of disability management is to return employees to work quickly, without jeopardizing their well-being or the company’s operations; and

•to be patient, caring and honest.

The role and responsibilities of the disability management specialist are critical to the successful outcome of a disability claim. In-depth knowledge of medical treatment and terminology is essential, as is a thorough understanding of various injuries and illnesses and their short- and long-term affects. Equally important is the specialist’s experience and expertise in policy and legislative matters in both the insurance industry and workers’ compensation.

Keep in mind that experience and expertise in day-to-day management of claims is what allows specialists to take a comprehensive view of an employee’s needs — from proper reporting and overseeing appropriate and timely medical treatment, through to return-to-work programs.

The decision to use a third-party specialist, internal staff members, or hired personnel is one a company must make depending on its individual situation. The following questions will help to determine what is best for a company:

•Which is more cost-effective: hiring disability management expertise, or employing the services of a third-party disability management company? Have the company’s internal resources been reduced due to reorganization/layoffs/budget?

•Does HR have the time and resources to handle day-to-day projects as well as actively manage disability claims. Proper management is not simply liaising between the insurance carrier and/or workers’ compensation.

•If more time must be devoted to disability management, can HR continue to handle special projects efficiently, effectively, on-time and on-budget?

•Managing claims on an ongoing, daily basis is critical to the success of a disability management program. Does HR have the people with the necessary specialized skills to accomplish the goal?

•Would it be advantageous to work closely with a team of experts so there is a transfer of knowledge and expertise to employees?


The success rate of a disability management program will depend upon a number of factors:

•the disability management program must be launched with full support from senior management;

•the benefits of disability management must be clearly demonstrated to both the employee and the employer in human and financial terms, as well as in direct and indirect costs;

•return-to-work/accommodation must be present as a key component of the program;

•fully qualified, experienced disability management specialists should be assigned to actively manage claims quickly and efficiently to reduce the cost of those claims; and

•the ability to measure and evaluate the success and/or short comings of the program through accurate statistical reporting must be in place.

In today’s business climate, organizations in virtually every field of endeavour are looking to improve their bottom line. An effective disability management program can make a substantial contribution to that end.

Although some businesses may not be in the situation where disability management can make an impact, many others must look closely at how their disability management issues are being handled. Reputable firms will conduct a review of particular STD/LTD and/or workers’ compensation situations at no charge. The good health of a company’s employees could be at stake, not to mention thousands of dollars in potential premium savings.

Tony Fragomeni is an Alberta-based manager of cost benefit services with the disability management company Matrix Consulting Group Inc. He can be reached at 1-888-610-1444 or [email protected].

The cost of absenteeism
In general, absenteeism costs Canadian employers about 1.75 to 2.5 times a company’s payroll in direct and indirect costs.

According to a 2000 Watson Wyatt Worldwide survey on integrated disability management, direct disability and absence costs are 7.1 per cent of payroll (up from 5.6 per cent in 1997). The corresponding costs of disability and absence are up 27 per cent.

The survey also found employers that simultaneously involve line supervisors, designate an internal staff member to monitor absences and use an effective disability management program have an absence rate of 1.4 per cent, compared to 5.3 per cent for employers using none of these techniques.

In a survey by Sobeco Ernst & Young of 30 medium- to large-size employers covering eight industry sectors and more than 250,000 employees, improving disability management processes and returning employees to work earlier can save companies millions of dollars in disability management claims. The study shows that 62 per cent of companies have formal return-to-work programs for all disabilities, but only 28 per cent apply the program to workers’ compensation disabilities.

As well, only 51 per cent of the employers responded that their long-term disability insurer plays a significant role in returning employees to work.

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