Lost productivity due to an employee’s disabling injury or illness can have a serious effect on a business.
Unscheduled disability absences account for around 8.7% of U.S. payrolls, according to the “Total Impact Employee Absences” survey by Mercer/Kronos. That’s compared to the 13.6% of payroll that accounts for the cost of health care.
According to the Cigna “Integration Value Study,” employees that suffer a short-term disabling injury or illness, and that have both disability and medical coverage, spent fewer days on medical leave and away from work than those that did not have an integrated program.
Cigna also found that employees who have an integrated health and disability insurance program:
- Had a 20% lower absentee rate than employees with only disability coverage.
- Had an 11% greater return-to-work rate compared to employees without an integrated plan.
- Needed an average of 13 fewer days of short-term disability leave than employees without access to an integrated program.
Savings potential
Each day of disability for a business with average benefit offerings, an average hourly loaded wage of $29.71, and a 60% short-term disability benefit, costs the business around $159.00.
A business with 5,000 medical and disability-covered employees could see around 2,500 fewer disability days, which would add up to a productivity and direct-cost savings of almost $400,000 per year.
Chronic care
It is also important for employers to remember that illness and injury prevention does not cease after the worker starts a long- or short-term disability absence, as one medical condition can often lead into or cause another to develop.
Multiple studies have shown that a chronic care program is an important aspect of an employer having an integrated approach.
For example, another Cigna study on chronic care found that employees participating in chronic care programs were absent four fewer days and had a higher return-to-work rate after a disability than those not participating.
The benefits of a chronic care program — such as coaching, support, and education — can be instrumental in preventing employees seeing their situation drastically worsen.
The takeaway
It is clear that reining in employee absentee-related costs is vital to a company’s financial bottom line.
Research shows that integrated programs are key to having a coordinated effort in not only assisting employees to return to work, but also to stay on the job and healthy.
Integrated medical and disability programs offer an opportunity for employees to decrease absence due to disability as well as improve their health, which is a win-win for both employer and employee.
Want to reduce employee absences?
Contact us. Our consultants can work with you to develop innovative strategies to reduce employee absences, increase productivity, and improve your bottom line.
Alan Wang is the President of UBF and serves as the lead consultant. He has delivered the UBF solution set throughout the world and is highly regarded for his areas of expertise. You can follow him on Twitter @UBFconsulting.
Comments are closed here.