Cancer, musculoskeletal injuries are biggest cost drivers for disability plans

Cancer and mental health conditions are the fastest-growing conditions affecting disability insurance costs, while musculoskeletal conditions and cancer are the biggest cost drivers for such plans, according to a report released earlier this month by Mercer L.L.C.

In a survey of more than 300 employers, 22% said they see cancer-related claims increasing in frequency and costs, while 20% said they see increased frequency and costs for depression, anxiety and other mental health-related concerns.

Lower back pain claims are becoming more frequent and costlier, according to 13% of employers surveyed by Mercer, while 14% of companies say they're seeing increased frequency and severity for all other types of musculoskeletal claims.

Musculoskeletal conditions that don't involve lower back pain are one of the costliest ailments represented among short-term disability claims, according to 46% of employers in the Mercer survey. Cancer also is a significant disability cost driver, according to 45% of respondents.

Only 29% of employers surveyed said they have return-to-work policies for short-term disability claims, while 24% said they have return-to-work programs for long-term disability absences.

About 66% of respondents said they do not have a formal return-to-work program for disability-related absences.