OFFICIAL PUBLICATION OF THE DISABILITY MANAGEMENT EMPLOYER COALITION

July 2010 Vol. 2, No. 3

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In This Issue: Name of Article Name of Article

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Subtitle (where applicable)

OFFICIAL PUBLICATION OF THE DISABILITY MANAGEMENT EMPLOYER COALITION

July 2010 Vol. 2, No. 3

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In This Issue: Facetime in a Facebook World

White Paper: Behavioral Risk Management Survey

The RTW Manual by DMEC

The Dance of Integration and RTW

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contents@Work Masthead CopyEditorial Policy: All articles and content Copyright © DMEC 2010. @Work is the of-ficial publication of the Disability Management Employer Coalition (DMEC). The magazine’s goal is to present industry and association news, highlight member achievements and promote the exchange of specialized professional infor-mation. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of the asso-ciation, its staff, board of directors or its editors. Likewise, the appearance of advertisers does not constitute an endorsement of products or ser-vices featured in this, past or subsequent issues of this publication. DMEC makes no representa-tions, warranties or assurances as to accuracy of the information contained in the articles.

@Work welcomes submission of articles of in-terest to disability and absence management professionals at all levels. Complete instructions to authors are published online at www.dmec.org.

DMEC membership: Individuals receive @Work by being members of DMEC. Call 800.789.3632 or go online to www.dmec.org for more infor-mation.

Change of address: DMEC members, notify DMEC 60 days in advance. Journals undeliverable because of incorrect address will be destroyed by the post office and cannot be replaced. We cannot guarantee to supply back issues on late renewals or late address corrections.

Contact DMEC: Mail: 5173 Waring Road Suite 134, San Diego, CA 92120-2705. Phone Editor Peter Mead at 541.434.9029, fax to 541.844.1880; other DMEC business to 800.789.3632, fax to 877.789.3632, email to Assistant@dmec.org.

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Published by DMEC, Inc.Editor in Chief: Rebecca Milot-BradfordEditor: Peter MeadTemplate: Suz Grant • www.suztopia.comLayout & Production: Suz Grant

July 2010 Vol. 2, No. 3

DEPARTMENTSPresident’s LetterFacetime in a Facebook World

5

FEATURES

Compliance Memos Employers, Know Your FMLA RightsHealth Reform for Nursing Mothers

6

DMEC NewsWhite Paper: Behavioral Risk Management Survey

18

Chapter DevelopmentsWashington Chapter Ramps Up

19

COLUMNS

The RTW Manual by DMEC: the Dance of Integration and RTWby Teri Weber, Spring Group

7

Absence Matters – Bryon E. BassIntegration: the Link to Improved Outcomes in Absence Management

14

Upping the Output – Patricia PurdyIntegrated Absence Management—the Time Has Come at Last

15

Behavioral Matters - Dr. Robert N. AnfieldConnecting the Pieces

17

THEME: INTEGRATION

The Benefits of Integrated Disability Managementby Daniel Lyons, Liberty Mutual

10

Index of Advertisers 22

www.dmec.org ▪ @work 3

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The Hartford is The Hartford Financial Services Group, Inc. and its subsidiaries, including its administrative service companies, Hartford-Comprehensive Employee Benefi t Service Company and Specialty Risk Services, LLC, and issuing companies Hartford Life Insurance Company, Hartford Life and Accident Insurance Company and Hartford Fire Insurance Company. All non-property and casualty policies sold in New York are underwritten by Hartford Life Insurance Company. The home offi ce of Hartford Life Insurance Company is Simsbury, CT. All property and casualty policies are underwritten by Hartford Fire Insurance Company and its property and casualty affi liates. 3815 NS 04/10

This document outlines in general terms certain benefi ts and services that may be afforded under a Hartford policy or service contract. In the event of a confl ict, the terms and conditions of the policies and contracts prevail. All Hartford policies and services described in this document may be offered by one or more subsidiaries of The Hartford Financial Services Group, Inc.

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President’sLetterJuly2010

Facetime in a Facebook WorldOr Is Facetime Still Alive and Well?

I n this increasingly digital world, we are constantly questioning the value and vi-ability of some old standards and one of

these is the need to meet “face to face.” Can the marvels of the internet and even virtual reality take the place of the old-fashioned in-person meeting, not only for business transactions but also for professional education and networking? The question bears asking as we embark upon our 15th Annual International Conference—the cornerstone of which is the convocation of members and industry experts in San Diego. There are many reasons for attending a national meeting or conference:

intense educational immersion; •

learning the latest and most innovative •methods and best practices in one con-venient location;

the luxury of extended periods of time •(and interaction) with your peers;

exploration of new goods and services, •often first introduced at leading confer-ences;

relay recent research to a broad audience •for reaction and dissemination;

job search and informational interview-•ing for fast-track insider information or unlisted job openings;

mix and mingle and bounce ideas off •of others in a relaxed and supportive setting;

break away from the office grind for •some strategic thinking.

Or maybe it’s simply just a chance to see a city you’ve never seen before. Could my avatar do it with equal efficiency and quality outcomes? My feeling (and my baby-boom genera-tion may be showing) is that associations are founded on the need to “meet”—they are the heart of an association’s “raison d’être.” We exist to “associate or join together” around a common issue, cause, profession or industry. Despite economic factors, generational differ-ences (i.e. Gen X and Y who have grown up with the digital age) and ever-expanding digital platforms, there still remains a place for con-ferences and meetings where body language and social signals can be read precisely and allow for reaction in real time—up-close and personal, as they say. We are, after all, human beings and thus by our nature, crave the inter-action with other fellow human beings. As you begin your conference experience, and many of you reading this issue will be doing just that in San Diego, enjoy the opportunity to meet and greet with your colleagues. Learn and absorb all the new and practical information. Then head back to your office (virtual or not) to apply and reflect on what you’ve learned through the old-fashioned, but highly effective, Facetime. And hey, you might even sing its praises in a Tweet or on your own very personal Facebook page. See you in San Diego and don’t forget to tap me on the shoulder. I’d love to see your face!

Marcia Carruthers,MBA, CPDM

President and CEO, DMEC

“There still remains a place for conferences and meetings where body language and social signals

can be read precisely and allow for reaction in real time—up-close and personal, as they say.”

www.dmec.org ▪ @work 5

COMPLIANCEMemos

Case law is clear that employees making fraudulent FMLA claims don’t qualify for leave, and are subject to termination

for dishonesty or unexcused absence. But what if an employee only “fudges” a little bit? In Tanum Smith vs. The Hope School (7th Cir-cuit, No. 08-2176, 3-30-09) Tanum Smith added the words “plus prior depression” to her FMLA medical certification form. She later claimed that even without this “irrelevant” addition, she was entitled to leave due to the authentic, unchanged information on the provider’s form. As so often happens, one falsification alerted the employer to look for more. The Hope School found Smith also backdated her portion of the signature line of the FMLA application form by several days, and totally fabricated an “Attending Physician’s Statement.” Smith proposed a rule that employers be re-quired to review FMLA claims, ignore false or invalid information, and pass judgment only on valid data. The Appeals Court for the 7th Circuit upheld the District Court’s finding that the employer was

within its rights to terminate Smith for unexcused absences of more than three consecutive days. Fraudulent additions to an FMLA medical cer-tification form invalidate any claim to leave. The Appeals Court further held that Smith’s pro-posed rule “would have the effect of encouraging applicants to dress up an application for leave by adding non-existent conditions.” But the Appeals Court also noted that simple additions, such as correcting spelling errors or adding detail “with the knowledge and approval of a treating physician,” may not necessarily in-validate an FMLA application. What if Smith had not had dating problems on her applica-tion, and had come back later with totally valid paperwork? The court noted it did not have to face that conundrum, so the question remains unanswered. Under current regulations, an employer may contact a provider to verify or clarify information included on an FMLA medical certification form. For the full details of this fascinating case, visit the DMEC Legislative Update blog at http://dmeclegal. wordpress.com/.

One provision of the new health care reform law that most news outlets overlooked is the new rule regarding

reasonable break time for nursing mothers. An employer must provide a reasonable break time and a private place other than a bathroom for an employee to express breast milk for her nursing child for one year after the child’s birth. This rule is in effect right now; there was no effective date specified for this provision, which means it took effect on March 23, 2010, the date the President signed the Patient Protection and Affordable Care Act (PPACA).

Employees with fewer than 50 employees may be exempt if this requirement would impose an undue hardship. An employer does not have to compensate an employee for this break time. State laws providing employees with greater rights are not pre-empted by PPACA.

6 @work ▪ July 2010 Vol. 2, No 3

CM#4: Employers: Know Your FMLA Rights

CM#5: Health Reform for Nursing Mothers

John C. Garner, CEBS, CLU, CFCI, CMC

Principal, Garner Consulting Blogmaster,

DMEC Legislative Updates

FEATURE:Integration

TheRTW Manual

The Dance of Integration and RTW

Although returning employees to work in a full-time or modified duty capacity is the focus of the text, integration and coordination among plans set the underpinnings for any and all RTW initiatives. When disability programs (both occupational and non-occupational) lack coordi-nated messaging, shared stakeholders, and integrated plans and processes, a streamlined RTW program becomes even more challenging. Clearly, integration is one of the key ingredients of a successful RTW program. That’s why the theme of integration is peppered throughout the book, including but not limited to content related to metrics and processes documentation. Chapter 3, “Program Challenges,” is a great example of the dance between integration and RTW. As the chapter examines the special challenges faced by the individual stakeholders in the RTW process, the basic solution often involves providing some new input that the stakeholders have not leveraged in the past through improved internal or external subject matter experts. DMEC often talks about the silos that exist within insurance or disability programs. It’s also true that most individuals working in an organization operate in a silo as a result of their specialized knowledge and responsibilities. Integration bridges the gap between programs, processes and people to remove silos over time.

“Clearly, integration is one of the key ingredients of a successful RTW program.”

Teri Weber

he RTW Manual by DMEC, to be released at the

Annual International Conference in August 2010,

is intended as a desk reference for disability man-

agement and absence management professionals

at all levels. Each chapter sets context around

Return to Work (RTW) programs and processes.T

www.dmec.org ▪ @work 7

by DMECIntroduction by Teri Weber Spring Consulting Group LLC Partner and Editor of The RTW Manual.

Introduction followed by excerpts from The RTW Manual, Chapter 3.

Perhaps the most significant chal-lenge within RTW programs that reso-nates with integration is organizational commitment. The same dedication required for strong RTW programs is needed for program integration. That commitment must be felt from senior management but implemented, man-aged and maintained by subject matter experts within the organization.

The RTW Manual, Chapter 3: Program ChallengesWhen implementing a new RTW program or modifying an existing one, resistance and obstacles exist and must be overcome at all levels within the organization. With RTW, as is the case with many companywide initiatives the commitment must be present from the top down. From there plans and pro-cesses must engage stakeholders and be clearly communicated. Although not all challenges can be anticipated, con-sidering the following in advance may ease the hurdles associated with RTW:

Supervisor concerns•Employee motivation•Role of the treating physician•Bargaining unit positioning•Organizational commitment•Shifts in Control•Turf wars and combating silos•Repairing a broken program•The effect of downsizing•Repairing a broken program•Culture of RTW•

(This excerpt from The RTW Manual includes Supervisor Concerns, Treating Physicians and Organizational Com-mitment. For the complete picture, get The RTW Manual today!)

Supervisor ConcernsManagers and supervisors are under increased pressure to deliver more with less. Many believe modifying jobs or physical work environments may be a barrier to getting the job done. They also perceive that injured workers—not

performing at full capacity—may slow down production. Strong RTW programs respect this perception but educate supervisors and managers about productivity and modified duty. In practice, most jobs can be easily modified to accommodate the physical limitations an employee experiences; however, direct superiors may need help identifying modification oppor-tunities and support tools for ongoing RTW efforts. An RTW Coordinator is a strong resource for managers, assuming mutual trust and respect exists. Line management should be reminded that very few people work at 100% and an experienced person at 80% is more valuable than an inexperienced person at 100%. One of the most critical stakeholders in the success of an RTW program is su-pervisors. Without their daily applica-tion of RTW efforts and their ongoing communication with employees even a strong program will not be successful. Ideally, line managers and direct super-visors should be involved in the earliest stages of program development. This will educate them on the complexities of the program as well as Americans with Disabilities Act (ADA) and workers’ compensation (WC) requirements. In addition, they can spearhead educational sessions and tools to dispel myths and foster shared goals. Productivity and cost center incentives often motivate supervisors to leverage the RTW pro-gram, but they will also be engaged and supportive if they know the or-ganization is committed to RTW and monitoring outcomes.

Role of Treating Physicians Most often, the physician who is treating an injured or ill worker will rely solely on communication from the employee to determine whether he or she feels able to return to the workplace. Exacerbating this chal-lenge is the fact that physicians may not be trained in disability duration. By coordinating your RTW program to include the treating physician, the doctor and other medical professionals will have support in promoting the employee’s return to full, productive employment. Without this link, the dialogue between physicians and em-ployees may not include discussions about their job, which is detrimental to successful RTW efforts. By providing the treating physician with a detailed job description and analysis at the onset of the disability, the doctor will better understand the phys-ical and cognitive job requirements. Some companies may even provide a DVD or tour of their facility so the physician can visualize the details of the employee’s job. Clearly understanding any limitations and the capabilities, as determined by the doctor, is essential to make appropriate work assignments and provide necessary worksite ac-commodations. Physicians should also consider underlying psychosocial issues and screen for depression and other psychosocial impairments. Ask the phy-sician to describe what the employee can do rather than focusing solely on what he or she cannot do. Be sure this includes review of non-prescription and prescription medications that

8 @work ▪ July 2010 Vol. 2, No 3

“One of the most critical stakeholders in the success of an RTW program is supervisors… Ideally, line managers and direct supervisors should be involved in the earliest stages of program development.”

Teri Weber

may impact treatment and RTW. If the employee cannot return to his or her regular job, a modified duty job description and job analysis form will be provided to the physician for analysis.

Organizational CommitmentEffectively communicating the finan-cial impact of disability is critical to gaining support of senior management and other key decision makers regarding RTW efforts. Determine how much money the company spends on benefits and entitlements and detail exactly how much is spent paying employees not to work. Absence and productivity studies can help illustrate the direct and indi-rect cost of disability-related absences on companies. For example, the cost associated with training expenses; lower productivity during training; in-creased overtime for those picking up the slack; potential increases in WC costs as new employees and employees working longer than usual hours in-crease exposure. These elements can affect the bottom line profitability of the enterprise. The reduction in head-count and experience also has a finan-cial impact on the corporation. Your cost analysis should be high-level, with supporting detail leveraging graphics when possible and separating direct and indirect costs. Once senior management is edu-cated about productivity and absence they will understand how returning employees to full employment is good for the firm as well as employees and their families. This support will trickle down to managers, supervisors and other decision makers. Due to the unique nature of RTW and modified duty, an organization commitment is needed to see significant gains. If the team does not truly support RTW, the plans and processes will not be sus-tainable. Similarly, if senior manage-ment does not track and manage their ongoing commitment to their goals and objectives, over time the focus on

RTW will fade. Although nothing catches the atten-tion of the CFO more than the impact to the bottom line, the organization commitment must go deeper than fiscal support. In some cases, retaining a consultant to support internal theories about spending and potential savings may provide additional credibility. Because some senior managers may not be familiar with RTW programs, having a clearly defined and recom-

mended strategy to present is key. Provide a detailed description of the process you plan to use for monitor-ing the program and benchmarking results. Showing what type of dollar savings has been achieved year over year is especially powerful, but do not forget about program costs. Display-ing the most accurate information available will allow the team to make accurate and appropriate decisions.

www.dmec.org ▪ @work 9

it’s time to make it better for them.

“CIGNA” and the “Tree of Life” logo are registered service marks of CIGNA Intellectual Property, Inc., licensed for use by CIGNA Corporation and its operating subsidiaries. All products and services are provided exclusively by such operating subsidiaries, and not by CIGNA Corporation.

836568 04/10 © 2010 CIGNA

Every disability is a health care event. Integrated disability and health care plans can help improve the health and productivity of your workforce and lower costs. And that makes everyone feel better. To learn more, contact us at Reply@CIGNA.com.

We’ll Help You Reach New Heights

Insurance, Retirement, Investments and Advicestandard.com

When people feel confident about the future, they can focus 100 percent on the present. At The Standard, helping you create that confidence is our highest priority. We take your business personally. So you and your employees can take on new challenges.

The Standard is a marketing name for StanCorp Financial Group, Inc. and subsidiaries. Insurance products are offered by StandardInsurance Company of Portland, Ore. in all states except New York, where insurance products are offered by The Standard Life InsuranceCompany of New York of White Plains, N.Y. Investment services are offered through StanCorp Investment Advisers of Portland, Ore.Product features and availability vary by state and company and are solely the responsibility of each subsidiary.

SI 15106 SI/SNY (2/10)

FEATURE:Integration

The Benefits of Integrated

Disability ManagementFinding your organization’s straightest path to cost savings and productivity

By 1949, all states had enacted workers’ compensation statutes.1 The first employer-sponsored group disability policy was written for Montgomery Ward and Company by the Equitable Life Insurance Company in 1911.2 Integrated disability management (IDM) arose to coordinate different employee-targeted insurance pro-grams, such as short-term disability (STD), statutory dis-ability (STAT), long-term disability (LTD), and workers’ compensation (WC). The aim of this coordination is to increase efficiency, improve service delivery, and reduce costs, including the total cost of risk. According to a study released by the Integrated Benefits Institute (IBI) in 2006, two out of three employers integrated their ben-efits programs at some level.3 Program integration continues to offer opportunities for organizations to streamline resources and reduce em-ployee absence and its related costs. The key is to identify the benefits of integration as it applies to your particular organization. Then, based on your organization’s particular needs, identify the benefits that are most important to integrate. These typical benefit groupings (see Figure 2) are driven by company goals (text under the stacked boxes). This

“Identify the benefits of integration as it applies to your particular organization.”

Daniel Lyons

isability management is not a new concept

for employers or insurance providers. In fact,

in the U.S. the trail begins more than a century

ago when Maryland passed the first “work-

man’s compensation” statute in 1902.D

10 @work ▪ July 2010 Vol. 2, No 3

By Daniel LyonsGroup Benefits National Accounts ManagerLiberty Mutual Insurance Company

step may call for a consultant’s help, or a provider that supports a broad range of insurance products with the expertise to integrate programs effec-tively. Here are some things to consid-er when reviewing integrated program solutions.

The Benefits of IntegrationWill IDM make my job easier?The 2009/2010 Staying@Work™ Re-port by Watson Wyatt (now Towers Watson) highlights that health and productivity program costs (workers’ compensation, disability, medical, sick leave) accounted for more than 21 per-cent of payroll. Administration of these benefits can be a huge drain on HR or benefits personnel, and ultimately distract an employer from its first priority—deliv-ering goods and services to customers. By integrating short- and long-term disability, leave, and workers’ compensation programs, an employer may reduce duplicate and overlapping processes for concurrent events. One road to integration is through a single provider and claims process for all coverages. Another is through a case management process that achieves seamless integration among multiple providers. Either approach generally means less paperwork, better coordi-nation of payments to claimants, and consolidated reporting for all claim and leave activity. HR and other ben-efits personnel spend less time admin-istering disability and leave-related matters, freeing them to more actively focus on core issues.

Will IDM increase employee satisfaction?One leading cause of employee dissatis-faction is poor communication during an absence. By using an effective inte-gration strategy, employers will assure that:

Employees will benefit from timely •contact and communication of their rights and responsibilities

There is consistent case man-•agement, eliminating duplicate requests for information

Timely and accurate benefits •payments help support the fam-ily during an absence

The focus is on return to work, •regardless of where the injury or disability occurred

Communications are tailored for •consistency with an employer’s specific needs

An employee’s absence has been •approved (whether job-protected

leave, workers’ compensation, or group disability).

How does IDM improve compliance?Keeping pace with benefits trends and leave requirements can distract an em-ployer from its core business. Rather than constantly investing in systems upgrades and training employees, an employer could benefit from an ef-fective integration strategy that out-sources these complicated issues to providers. For example, the introduction of the Family and Medical Leave Act

www.dmec.org ▪ @work 11

Figure 1. Reasons for Integration

Figure 2: Common Benefits Clusters

(FMLA) in 1993 added another chal-lenge to the IDM mix—job-protected leaves. In the ensuing years, FMLA has been amended, and some states have introduced their own job-pro-tected leave requirements, some paid. Robust IDM system integration helps ensure accurate tracking and reporting of leave and disability events and ad-herence to regulatory requirements.

Will my benefits programs be administered more consistently?An effective IDM system will ensure that all employees receive the support they need regardless of the absence—whether on the job, or off-site. For an organization with a widely dispersed employee population, an effective IDM system offers jurisdictional ex-pertise, ensuring that local regulations are understood and applied. By using the same clinical approach, case man-agement style, and return to work

process, employees will benefit and know that their needs are being met. Will I have better control over my program costs? Administrative efficiencies may very well be achieved through having an integrated intake, case manage-ment, and data and reporting solu-tion. Additional hard dollar savings are realized through proper payment allocations and offsets and reduction of fraud. By taking a holistic approach to disability management, an effective IDM system unites the entire claim and RTW process, as well as inter-facing with non-insurance providers such as EAP and wellness administra-tors. Sharing data, as authorized, and providing telephonic “warm” hand-offs among providers reduces duplica-tion of effort and miscommunication. If all system information ties into a comprehensive reporting suite, an

employer can improve plan design, devise specialized training based on local events, and engage with other system providers to address issues as they arise—all of which may lead to lower costs.

Will I be able to improve productivity?The costs of “covering” for an absent employee can be very high. In fact, according to one IBI study, “lost pro-ductivity costs associated with dis-ability absence alone are greater than the combined costs of medical and disability payments.”4 In addition to direct costs, such as administration and medical payments, overtime and temporary help, there are substantial indirect costs in missed deliveries and delays in service. A strong return to work program can improve productivity for both the employer and the employee. For the best outcomes, an organization must use the same return to work philoso-phy, resources, and processes for all injuries and illnesses.

Other considerationsThe structure of an organization’s ex-isting benefits plan could impact the effectiveness of integration. While the benefits of integration may seem obvi-ous, the real-world picture is not al-ways simple. Areas to consider before moving forward include:

Substantial exposure• for both the occupational and non-occu-pational programs. If the primary exposure is one or the other, the overlap may not be large enough to realize significant cost savings.

Adequate participation• in group disability programs. A 75 percent participation rate gener-ally ensures sufficient disability claim volume.

Concurrent tracking• of FMLA with short-term disability claims. Considering the tight link be-

12 @work ▪ July 2010 Vol. 2, No 3

Where’s the Value? The “AND” “OR” Discussion about STD & Workers’ Compensation

The “OR” program: An employee is covered by workers’ compensation for a work-related disability or STD for a non-work related disability.

Only one program covers the employee’s disability absence•Depending on the state and the employer’s STD benefit plan, an •employee with a non-work related disability might receive a higher benefit than an employee with a work-related disability, or vice versa.

The “AND” program: An employee with a work-related disability is cov-ered by both workers’ compensation and short term disability.

The short-term disability benefit supplements the workers’ com-•pensation benefit. The employee receives the maximum wage replacement for which •he or she is eligible, no matter where the disability occurs.

The AND program offers the broadest integration scenario and best opportunity to control program costs. Cost shifting is avoided—stricter workers’ compensation policies do not result in an increase in disability claims. In addition, offsets are applied correctly, reducing the likelihood of overpayments. Finally, the possibility for employees to knowingly or unintentionally “double dip” and collect full workers’ compensation and group disability benefits for the same claim is also reduced.

tween the two programs, integra-tion is a critical part of managing absence.

Contracts that may limit• the ability to affect return to work outcomes. If there are restrictions on the use of return to work ini-tiatives for a significant propor-tion of the employee population, the effectiveness of an integrated program will be limited.

Program integration has been em-braced by employers at an accelerating pace because it provides benefits that touch nearly every part of a company. As a result, IDM has proven to be of great value to both employers and em-ployees, especially when approached methodically, with a clear understand-ing of the organization’s culture and commitment to help their employees affected by disability.

Endnotes 1. Fishback P. “Workers’ Compensa-tion,” EH.Net Encyclopedia. March 26. 2008. URL http://eh.net/encyclopedia/article/fishback.workers.compensation.

2. Bluhm WF editor. “Group Insurance,” ACTEX Publications, 3rd Edition: p.5. 2000.

3. Integrated Benefits Institute. “Unlock-ing Benefits Silos,” IBI Report. March. 2006.

4. Integrated Benefits Institute. “The Im-pact of Integrating Health and Disability Data” An IBI Research Summary. Au-gust. 2006.

www.dmec.org ▪ @work 13

ABSENCEMatters

14 @work ▪ July 2010 Vol. 2, No 3

Integration: The Link to Improved Outcomes in Absence Management

How do you define integration among varying components of your health and productivity management programs? A

majority of employers now link non-occupational and occupational disability management. But today’s trendsetters link disability and FMLA with their health management programs. Integration strategies usually involve phas-ing-in programs over time, and take into con-sideration: company culture, resource avail-ability, hot-button of Benefits Directors/VPs, current outsourcing arrangements, and collective bargaining agreements—to name a few. If your program has none or just a few integrated com-ponents then your program is likely not pro-ducing the best results.

Integrating FMLA and Disability Helps Reduce Absenteeism and CostsLinking FMLA with disability can reduce claim submission delays and help identify individuals at higher risk of filing repeat claims, according to a study by Unum. This study found that em-ployers with coordinated FMLA and disability programs had shorter disability durations than those that managed the components separately. The results were staggering—an average of 2.9 days for integrated programs compared to 7.8 days for stand-alone programs. An additional consideration is the ability to manage both the disability and FMLA claims concurrently, with a single claims management resource. Various studies have found that 55% to 70% of FMLA claims have disability com-ponents. Not only do programs benefit from decreased absenteeism rates, but also the use of a single claims management resource likely will reduce administrative spend.

Absence is a Predictor of Future DisabilityIn 2008, Unum released a study of FMLA as a predictor of future disability, finding that:

More than 70% of FMLA claims have a •short-term disability component

FMLA usage is a leading indicator of in-•creased absence/disability program usage

FMLA usage is a leading indicator of in-•creased direct and indirect total absence costs

These findings are profound—FMLA claims really can be a crystal ball for any organization. So isn’t it time to consider integration opportu-nities to prevent FMLA claims from becoming a future disability?

Moving Toward Health & Productivity ManagementThe missing piece is arguably the one that is most overlooked—a powerful component that can launch an organization’s absence and disabil-ity program into a proactive state. That missing piece is integration of health management and employee assistance program (EAP). Many studies have demonstrated that integra-tion of these programs has measurable impact on overall absence costs, an average of around 30% in many cases. However, these studies have traditionally focused on a limited picture of in-tegration between disability and health manage-ment programs—FMLA and Leave again take a back seat. FMLA claims are ripe for health management and EAP intervention opportunities. Employers continue to state that intermittent claims have a significant impact on organizational produc-

Bryon E. Bass, CPDM VP Absence Management

Practice LeaderSedgwick CMS

continued on page 16

UPPINGtheOutput

www.dmec.org ▪ @work 15

Integrated Absence ManagementThe Time Has Come at Last

If you’ve been around disability benefit pro-grams for the last few decades, chance are you recall the last ‘go around’ of integrated

disability programs, combining STD, LTD and workers’ compensation in what was often called “24 hour care.” While the idea sparked interest and seemed logical, it did not take hold as the industry norm. Apparently its time hadn’t come yet. Flash forward 20 years. Large employers, con-sulting firms and insurance carriers are all talking about the value of integration. Research is bearing out the growing interest in implementing inte-grated disability programs, and even broader, integrated absence management programs. So, what has changed? First and foremost, the 10 years of this new millennium has seen a resurgence of concern over productivity. Competing on a worldwide stage has forced all organizations to strive for “lean and mean.” As companies instituted hir-ing freezes and layoffs, the output demands did not lessen. Many were faced with doing more with less, and in fact, did. The productivity push is being felt through-out our organizations, including the employee benefits and disability management arenas. The “C Suite” is asking how benefit programs con-tribute to increased productivity. Benefit plans have long been viewed as an employee retention tool. A tightened job market with fewer em-ployment opportunities has employers expand-ing their focus beyond retention and looking for some additional returns from benefit plans, including improved productivity. The first step is benefit plans fostering em-ployee health so they can be at work and focused on work. Health plan data, preventive programs, disease management, wellness and EAP services,

case management to return skilled employees after a workers’ compensation or STD claim—all contribute to the bottom line. Each of these disciplines, on its own, has prov-en practices that contribute to work productiv-ity. And yet employers and their insurance pro-viders have traditionally operated in silos when handling disabled employees, based on the clas-sification of occupational vs. non-occupational. In this siloed approach, best practices from each discipline are frequently not shared, and it’s rare to see combined reporting, trends analysis or an integrated, employee-centered approach. Add one more (big) wrinkle to the picture: the growing number and complexity of state and federal leave programs allowing employees to take job-protected leave in a multitude of situa-tions. Currently more than 40 states have passed some type of leave law in addition to the federal FMLA. We now have almost 100 different leave laws covering organ donation, parental schools visits, military leaves, victim of domestic abuse, volunteer activities, etc. The variety of eligibility rules, elimination periods and durations make tracking absence an intricate task. Ineffective leave management has led to employee abuse (intentional or unintentional), excessive or ineli-gible time away from work, and legal liability—all issues that did not exist years ago. Lastly, business in 2010 is data driven. In the technology era, management expects us to track and report out on almost every aspect of business. Yet many companies can’t tell you how many employees did not come to work today, what is driving absenteeism and what it is cost-ing them. Obviously the end game is analyzing data for gains, proactive programs to manage health and optimize productivity. But the only

Pat PurdyDistribution & Market

DevelopmentThe Hartford

continued on page 16

way to get there is to look at absence (and all of its pieces) holistically. As we wring out the cost savings and efficiencies that can be found in other parts of our business, we are challenged to look at breaking down internal barriers and searching out productivity gains from the adminis-trative efficiencies, improved absence management and data reporting capa-bilities of a program that manages the total picture of absence. It’s an idea whose time has come.

16 @work ▪ July 2010 Vol. 2, No 3

tivity. Even after tightening policies to better control intermittent usage, there is an opportunity to use claims level data to refer employees to pro-grams to help them better manage their condition or that of their family member. Consider these statistics:

4 out of 5 intermittent claims are •related to an employee’s or family member’s chronic condition

Within the last 5 years, intermit-•tent leave for chronic conditions has increased year over year

Within the last 2 years the trend •to care for an aging parent has seen dramatic increases

Use this data to your advantage, build integrated programs so your organiza-tion can benefit from decreased absen-teeism rates, decreased cost—and, above all else, a healthier workforce.

ABSENCEMatters

Integration: The Link to Improved Outcomes in Absence Management

continued from page 14

UPPINGtheOutput

continued from page 15Integrated Absence ManagementThe Time Has Come at Last

DISABILITYMatters

www.dmec.org ▪ @work 17

Connecting the Pieces

The majority of Americans derive satisfac-tion from their jobs and “live to work.” So concludes a recent survey from Yan-

kelovich. It reveals that 63% of workers live to work, including 18% who say they love their job so much they’d continue working even if they won the lottery. On the other hand, 36% “work to live,” in-cluding those who say they work primarily for the paycheck or benefits, or feel stuck due to the bad economy. But when you get right down to it, whether you live to work or work to live, work is impor-tant to almost everyone—and what’s important is worth protecting. And yet, the survey reveals that only 36% say they’ve taken steps to prepare for a possible work-stopping injury or illness. The survey also shows that many Ameri-cans don’t connect staying healthy to staying on the job. Among the 86% who believe they can prepare for a possible disabling event, just 18% mentioned becoming healthier or staying well as a way to do so. And among those who said their employer offers programs or services to help them prepare, only 12% cited workplace wellness programs. These findings clearly show that we need to do more to help workers understand that healthy behavior matters. After all, taking care of one’s health—both physical and emotional—is one of the best ways to avoid a disabling ill-ness or injury. Employers can and should help employees identify their health risks, because when people see for themselves how their lifestyle and be-havior affect risk, it can be a wake-up call—a call to action. Many companies have their em-ployees complete a health risk assessment and some also use predictive modeling tools. These assessments have traditionally been paired with health benefits but are now being used to help predict and prevent short-term disabilities.

No matter how at-risk employees are identi-fied, programs that address the whole person are most likely to succeed at helping them address their issues. For example, Joan has emphysema, high blood pressure and diabetes. She tried a smoking cessation program but dropped out early. She’s often depressed and recently called her employee assistance program for help with a financial problem. With a complicated set of medical and behavioral issues, Joan is a classic case of a disability waiting to happen. While talking about her financial difficulties, Joan’s EAP counselor discovered that Joan had become so depressed about her finances that she stopped taking her blood pressure and dia-betes medications. The EAP counselor referred Joan to a mental health professional to manage her depression and also connected Joan to the diabetes disease management program that her health plan offers. People like Joan can benefit from interven-tion by a professional who looks at people holis-tically and who understands how mental health and physical illness are connected, and that in-tervention can help prevent a disabling event. That’s also why integrating information is so important. Taken together, medical, behav-ioral and pharmacy claims data provide a more complete picture of Joan compared to looking at each of those items in isolation. But risk can be discovered through something as simple as a call to the EAP or to a health care advocate who is trained to uncover all the pieces and then connect them. No matter where the pieces of information come from, it’s connecting them to avoid a dis-abling event that’s critical. After all, Americans live to work. If we’re able to connect the pieces properly, we can take steps to help ensure they remain able to do so.

Robert N. Anfield, MD, JD, FAAFP

Chief Medical Officer CIGNA’s Disability

Business

DMECNews

Findings from the DMEC 2010 Employer Behavioral Risk Survey show that Behav-ioral Risk Management practices are an

important emerging area of concern for employ-ers who need to decrease loss and increase profit-ability. DMEC’s joint surveying effort with five other affiliate partner organizations generated responses from 114 employers, covering a broad scope of industries and employer sizes. The survey white paper, available at www.dmec.org, identi-fies trends in use of Behavioral Risk Manage-ment best practices, and compares these with trends in DMEC’s 2008 survey. “This survey represents the strong message that major employers are sending regarding the integration and innovation in the area of behav-ioral health in the workplace. While this area of management is complex and in its early stages, the best practices regarding Behavioral Risk Management—especially the early intervention in cases that are complicated by a physical illness or injury—continue to be explored and per-fected. DMEC is committed to advancing this important area of study.” As one survey respondent noted, “With improved data integration we can see the lost productivity from comorbid behavioral health problems that we previously suspected. In many cases, behavioral risk came before a physical ail-ment, and addressing the behavioral health risk early—for an employee who is still otherwise healthy—is much more effective.” DMEC coined the term Behavioral Risk Management in 2006 and established a stage for open discussions related to behavioral absence and productivity initiatives. The core philosophy is to assess behavioral risk in a unique way in order to decrease claim and productivity loss, increase corporate profitability, and increase the quality of life for employees.

“Given the high prevalence of mental health conditions and how frequently they co-occur with physical illnesses, behavioral risk manage-ment is an essential component of an overall dis-ability management strategy,” said Clare Miller, Director, Partnership for Workplace Mental Health, an American Psychiatric Foundation project. “As the Surgeon General said, ‘there is no health without mental health.’ These survey results illustrate that employers get this and are taking the essential steps to do something about it.” Employers expanded their Behavioral Risk Management activities despite intense budget pressure—proof that these practices address an important emerging area of concern.

Fully 90% said “yes” or “maybe” impor-•tant to their integrated programs, and 48% had a behavioral component in their program, up from 31% in 2008.

36% used a mental health professional •for physical cases with an underlying psychiatric comorbidity (up 14%). The goals were to increase awareness and suc-cess with treating the whole person, and reduce fear of opening a “Pandora’s Box.”

An employee assistance program (EAP) •is the most significant program element for Return to Work (RTW), said 65% of survey respondents. Employer com-ments indicated that engaging employees through the EAP can create an intimacy that strengthens communication and fosters a return-to-work focus from the beginning of an absence.

A high percentage of employers, 70.5%, lo-cated behavioral health coverage within their medical plan, compared to 20.5% having a sep-arate “carve-out” behavioral health plan. Carve-outs decreased substantially from 34.3% in

continued on page 20

18 @work ▪ July 2010 Vol. 2, No 3

White Paper Identifies Increasing Employer Use of Behavioral Risk Management

CHAPTERDevelopments

“We have some major corporations here that are pretty excited to have a solid DMEC presence

in the Seattle area again,” said new Washington (Greater Seattle) chapter steering committee co-chair Lillie Yates, benefits and leaves analyst for Puget Sound Energy. Yates’ partner for the Washington chapter is Cindi West, risk management claims manager for Starbucks Coffee, who spoke at their March meeting on “RTW in a Service Environment.”“They’re both strong leaders, they can share the challenges and joys, and make the responsibility manageable for them both,” said Sharon Milli-gan, DMEC’s chapter and volunteer and liaison, who has assisted the chapter with its startup. The chapter steering committee is working on meetings in mid-August and November, a full calendar for 2011, and chapter goals and objec-tives. “We have famous corporate names like Boeing and Microsoft that will have a major im-pact on defining the needs the chapter addresses and our agenda,” said Yates. The steering com-mittee includes representatives from Nintendo and IAM Crest/Boeing Joint Programs.

“We want to network around shared con-cerns, like how to handle the intermittent FMLA claims, how to budget for that, we can’t just carry extra staff,” said Yates. “We also have a huge need for education about issues like these, for employees, their supervisors, managers and even higher up,” she added. Many of the large employers in the region have employees with specialized, mission-critical skills. When these employees take their skills off the job in a disability claim, not only does the employee suffer, but so does the company. The aging workforce, along with wellness issues like obesity and diabetes, aren’t just individual prob-lems, they’re corporate problems. “How do you get their knowledge back to work, or make it possible for them to stay at work, maybe on re-duced hours, for as long as possible?” said Yates.Another concern is compliance with the many laws affecting employers, not only federal laws, but many mandates passed by the active Wash-ington State legislature. “We have employers who are involved with DMEC at the national level and now want to bring that down to the local level,” Yates said.

www.dmec.org ▪ @work 19

Washington Chapter Ramps Up

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2008, driven by consolidation in the market, as well as the increasing abil-ity of standard health plans to provide strong behavioral health benefits. Most employers have embraced EAPs—97% in both the 2008 and 2010 surveys—and now are devel-oping strategies to extract increasing value from their EAPs. In the 2010 survey, 65% of employers coordi-nated external EAPs, while 32% had internal EAPs. Larger firms were more likely to establish an internal EAP due to the complexities of program set-up and the ongoing costs as a function of overall EAP incidents/visits. The survey revealed that the most successful programs involved the use of an EAP. Suggested program en-hancements included: strong promo-tion of EAP services; communication to employees and supervisors; and early intervention and identification. This survey suggests that employers without EAP programs, or those un-der-utilizing their EAP, should recon-sider their approach. “Integration of Behavioral Risk Management is in its infancy but has successfully survived the severe eco-nomic landscape of the last two years,” said Carruthers. “While employers are early in the process of collecting and analyzing perceptions, we are en-couraged by their commitment and early adoption. Suppliers have also re-sponded to employer demand and see the value in coordinating their efforts. As work/life balance and continued economic challenges affect the work landscape, attention to this emerging concept will propel it forward.”

20 @work ▪ July 2010 Vol. 2, No 3

DMECNews

continued from page 18

White Paper Identifies Increasing Employer Use of Behavioral Risk Management

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