Integrated Benefits/Absence
Management
Bringing Total Absence Management
Into the Workplace
CAS/SOA: Enterprise Risk Management Symposium
July 30, 2003
Washington, D.C.
Stephanie Ramsey, B.S.N., M.P.H.
Employer Motivation for Integrated
Disability Management
Number 1: Escalating costs of employee absences
due to illness/injury – from 3.9% of payroll in 1999 to
4.6% in 2002
Number 2: Heightened awareness of inherent cost
structures of total costs of disability
Direct (Claim costs, wage replacement,
premiums)
Indirect (Administrative expense, replacement
employees, disability FICA taxes, decreased
productivity)
Employers’ Time-off and
Disability Programs
Current Practice
Planning/Considering
Consistent return-to-work policy
53%
23%
(76%)
One STD/LTD carrier/TPA
47%
15%
Common occupational and non-occupational intake
27%
14%
Linked occupational and non-occupational claims data
15%
24%
(39%)
One STD/LTD/WC carrier/TPA
7%
18%
Source: Marsh Mercer Study: Survey of Employers’ Time Off and Disability Programs 2002
Employer Responses
Return to Work/Stay at Work Programs
Early identification/absence tracking
Medical case management
Job modifications/accommodations
Employee Health Promotion
Benefit Plan Integration
Plan design
Plan Administration
Information Management
Return to Work/Stay at Work Programs
Identification of all absence episodes
Identifying absence episode according to
type
Incentives for return to work
Medical case management
Health Promotion
Benefit Plan Integration
Internal:
Benefit Plan language
“Human Capital Manager”
“Big picture” view of costs
External:
Single carrier or TPA
“One-stop shop” for claim service and statutory
requirements
Summary reporting
Information Management
Predictive Modeling
Identification of “cost drivers”
Identification of “risk populations”
Management Decision Support Applications
What are the steps that need to be taken to
achieve the desired results?
Information Management and a
Management Decision Support System
EE Demographics
Absence Occurrence
Med Claim
$ Information
ICD – 9 Causes of
Illness/Injury
STD Claim
$ Information
Management Decision
Support Application
Health & Productivity Management
Med Provider
Staffing & Budgeting
Management Practice
Environmental Control
LTD Claim
$ Information
Pharmacy
Management
Programs
Vendor Management
Return to Work
Rates
FML Utilization
Total Absence Management “Supply-Side”
Vendor Response
62 Suppliers of Integrated Programs
(Source: Integrated Benefits Institute)
Poorly Defined Product Requirements
“Customized” Character of Product
Separation of Product Process Features
From Demonstrable Results
Data Management Challenges
The New Client/Vendor Relationship
Not “Plug-and-Play”
Collaboration
Program + Metrics + Methodology =
Actionable Results
Information Management
What are the Operational Risk Management Measures
that will translate these employer initiatives into the
financial terms that support effective control measures?
Predictive Modeling
Identification of “Cost Drivers”
Identification of “Risk Populations”
Management Decision Support Applications
What are the steps that need to be taken to
achieve the desired results?