Protecting the Bottom Line and Increasing Productivity
Integrated Disability Management (IDM) is a coordinated, consistent approach to an employer’s disability benefits programs, including short-term disability (STD), long-term disability (LTD), workers’ compensation, and Family Medical Leave Act (FMLA). In an Integrated Disability Management (IDM) program, employee absence due to illness or injury, whether work-related or not, is handled using the same claim reporting, claim management, medical case management and return-to-work protocols. Although many companys have thought of trying an IDM program, not as many have actually implemented such programs.
A fair number, I’d say up to 20%, run some sort of parallel program where they have either a single point of contact or a single claims administrator paying and coordinating short and long term disability. Salary continuation is often paid instead of lost wages, then at 12 -16 weeks (depending on the plan) short term disability takes over. There are many type of programs, each slightly different depending on the companies philosphy. For example, will there be wage replacement instead of workers compensation or not? Do they offer short and/or long term disability benefits or not? Etc.
The objective is to get the employee back to work as quickly and as effectively as possible, maximizing productivity, and mitigating costs. Three key areas must all work together to achieve success.
1. Potential benefits of integrated disability management
2. The key components of a successful program
3. The steps involved in an efficient implementation.
The Potential Benefits of an IDM Program
An effective IDM Program benefits an organization in several ways, including:
Reduced overall disability claim costs. But what is this figures comprised of?
The total cost of employee disability can be broken down into the following categories:
1. Direct Costs, such as wage replacement, medical expenses, benefits expenses and litigation costs.
2. Indirect (Hidden) Costs, including temporary employee replacements, overtime, lost productivity and reduced employee morale.
3. Administrative expenses to manage multiple programs, either internally, or through vendors.
4. Increased productivity resulting from shorter disability durations and quicker return to work. Studies show that the longer an employee is off work, the less likely he is to return.
5. Enhanced, consistent claim management processes for both occupational and non-occupational injuries and illnesses.
6 Integrated data collection, sharing and reporting across benefit lines and policy years.
7. Reduced chance to submit multiple claims and “double dip” due to single source claim reporting and management. (WCxKit)
8. Increased employee satisfaction from simplified claims services
9. Medical management of all disability lines. It’s only one body, one person, so a medical director could potentially have great impact since the employee is using all benefits available. Thus medical managment could have a huge impact to help reduce these costs.
10. Modified duty and transitional work assignments with internal accounting. While having modified duty has a cost, NOT having one has an even higher cost – 100% loss of one employee’s productivity plus replacement wages for another employee, plus workers comp, STD or LTD.
Author Rebecca Shafer, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: [email protected] or 860-553-6604.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers’ comp issues.
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