Long-term disability claims and their first cousins, short-term disability claims, are getting costly--so costly companies now have powerful economic incentive to institute return-to-work programs for disabled workers. It wasn't always so.
"Fifteen years ago, long-term disability and short-term disability costs were chump change," said workers' comp consultant Richard Pimentel, a senior partner in the firm of Milt Wright and Associates. "No one sweated that money."
Costs were low, so disability claims managers had little incentive to get employees to return to work. That's no longer true.
"Today, LTD and STD are going through the roof," Pimentel said. "Companies are saying, 'I'm not sure we can offer it anymore. We've got to pass on the costs.' "
In some cases, particularly with self-insured companies, disability claims have become more expensive than traditional workers' compensation claims.
"For the self-insured in long-term disability and short-term disability, comp may not be the big dog in the yard anymore," he said.
Costs aside, there's another, more ominous trend forcing companies to implement return-to-work programs: the aging work force and labor shortage. In the private sector, the average worker's age is about 40 years old. In blue-collar trades, which attract less young talent, it's about 45 or 46 years old, Pimentel said.
When a worker is injured, companies take a hit in two ways: Older workers take longer to heal. Should the company decide to replace them, it will find that difficult.
"You can't risk losing your employees," said Pimentel, speaking to a group of workers' comp and disability managers in November. "The biggest problem is not the boomers retiring. It's boomers getting sick."
For millions of Americans, not just baby boomers, illness is already a way of life. By 2009, up to 73 percent of U.S. adults will be overweight, according to Gary Earl, senior vice president of Cigna HealthCare.
While excess weight isn't, as a rule, keeping workers from their jobs, it is predisposing them to chronic illness, and chronic illness means chronic job absences. Today, for example, there are an estimated 54 million people in America predisposed to diabetes, said Earl, and that's not counting the 21 million Americans, 7 percent of the nation's population, with the disease.
Yet if disability managers think they can impose a workers' comp return-to-work formula to coax workers on long- and short-term disability back to work, they're in for a nasty surprise.
Successful workers' comp return-to-work models are not guaranteed to bring workers with nonoccupational disabilities--such as diabetes, for example--back to work.
If it were that simple, said Pimentel, managers would have come up with a successful model long ago. "But it's not that simple. Dynamics between occupational and nonoccupational (return to work) are different," he said.
January 1, 2007
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