Compliance needs drive employer interest in integration of benefits programsPosted On: Aug. 17, 2014 12:00 AM CST
To ensure compliance with federal and state laws and company policies, employers of all sizes are becoming more interested in integrating their leave, disability and workers compensation programs.
For many years, integrated programs that coordinate different types of workplace absences, such as short- and long-term disability, federally mandated leaves and workers comp, have appealed to employers looking to lower costs, improve return-to-work rates and streamline processes for employees, said Terri L. Rhodes, executive director of the Disability Management Employer Coalition in San Diego.
But as the compliance spectrum widens, Ms. Rhodes said more employers are viewing integration as a necessity rather than as a way to get several departments — usually risk management, benefits management and human resources — to “play nicely in the sandbox.”
New Rehabilitation Act rules could further that shift, Ms. Rhodes said. The rules, which went into effect in March, require federal contractors and subcontractors to set affirmative action goals in hiring qualified workers with disabilities.
“There's more integration going on because of the compliance piece,” Ms. Rhodes said. “It's moving more from a financial return-on-investment decision for employers to ... "We have to be in compliance (and) there are some pretty severe penalties if we're not.'”
“For most clients ... probably the biggest reason they started outsourcing their leave had to do with compliance,” said Tammy LeClaire-Worthey, Irving, Texas-based senior vice president and managing director at Sedgwick Claims Management Services Inc.
“Just the nature and complexity of it, we're finding that more and more of them are looking to outsource their leave management,” she said, adding that coordinating with multiple vendors or even internal resources can cause confusion for employers.
“The nature and complexity” of compliance can be especially challenging for employers with workers covered by multiple state leave laws in addition to the federal Family and Medical Leave Act, the federal Americans with Disabilities Act and a company leave policy, Ms. LeClaire-Worthey said.
Still, coordinating employer absence programs and effectively using data analytics to improve results is “in its infancy,” according to Aon Hewitt's “2014 Health Care Survey,” which found that only 36% of employers measure how worker absences affect their bottom line.
Meanwhile, only 22% of employers will coordinate health and absence management with workers comp this year, but more than half are considering doing so in three to five years, according to the survey of 1,234 companies.
Pacific Gas & Electric Co. plans to implement a total absence management program in the near future, said Bryon Bass, PG&E's San Francisco-based director of integrated disability management in workforce health (see story, next page).
However, the natural gas and electricity provider's decision is fueled by factors other than compliance, which Mr. Bass said “shouldn't be the basis upon which your programs are built.”
The ability to “change the overall absence landscape” is the biggest benefit of having a total absence management program and the associated data, he said.
Employees should know “they're not just another number in a company,” he said. The employer's approach tells workers, “I actually care about you and your longevity with the company — your longevity in society. All those things together, that's really what a true total approach to absence management is all about,” he said.
Compliance might inspire a company to consider integrating its leave, disability and workers compensation programs, said Dr. Glenn Pransky, director of the Center for Disability Research at Liberty Mutual Research Center in Hopkinton, Massachusetts, but employers usually do so for several reasons.
Employers also want the savings, efficiency and productivity that come with having a total absence management program and integrated data, Dr. Pransky said.
It's becoming more difficult to separate work-related and nonwork-related absences when so many employees have conditions that “may be partially aggravated by a work exposure,” Dr. Pransky said.
The greatest benefit of integration is, perhaps, “the opportunity to manage whole people instead of fragmented parts of their lives,” he said.