The mention of “employee disability coverage” can bring a sense of reassurance for employers signifying financial assistance for their employees in times of injury or illness and providing a safety net for employee well-being.
As an employer, you want to ensure your employees have help if they are injured or ill, but you also need to keep your costs reasonable. Disability coverage can account for one of the largest portions of your total benefits spend. That’s why understanding disability and disability coverage is important: it will help you make the right choices about the disability coverage for your company. It can also help you to control the costs of coverage.
Defining Disability
So, what is a disability?
Disability: a physical or mental Impairment that limits an individual from performing their activities of daily living and impacts their ability to meet the demands of their job.
Disabilities can occur both on and off the job, but here we will focus on non-work-related disabilities covered by employee benefits plans. (Note: In Canada, each province operates its own Workers’ Compensation Board to address workplace injuries.)
Disability coverage typically comes in two forms: short-term disability (STD) and long-term disability (LTD). The duration of disability distinguishes these two categories, with STD covering the initial stages of a disability, while LTD may extend over years, and even up to the age of retirement. The difference is the timeframe of the disability. GroupHEALTH also offers an innovative Mid-Term Disability (MTD) option that helps bridge the period between STD and LTD.
Employee Disability Coverage
Employers now have the flexibility to tailor disability plans to suit their specific needs and budgetary constraints. Whether opting for traditional STD coverage, mid-term disability (MTD) solutions, or LTD plans, companies like GroupHEALTH offer customizable options to ensure adequate coverage without unnecessary expenses.
Understanding Long-Term Disability Plans
Let’s focus on LTD plans as they can have the biggest financial impact on your employee benefits plan. Disability coverage can be expensive – when employees are in receipt of LTD benefits the insurance company is paying out a percentage of their wages, potentially for years at a time. This adds up quickly and impacts your costs as an employer. As an employer, you want to look after your employees if they are disabled. But the financial aspect can be worrying – whether you’re just thinking of offering disability coverage, or if you are already providing it. Good news – there are ways that you can still provide the coverage, but also help contain the related costs.
Effective Cost Management Strategies
Balancing the desire to support employees with the need to manage costs can be challenging. However, solutions from a disability management provider (like the Disability Management Institute (DMI) can offer a practical approach to achieving both objectives. By partnering with DMI, employers can implement proactive measures to support employees before they reach LTD, helping to mitigate the financial risk.
DMI’s goal is to get help employees return to work in a safe, sustainable, and timely manner. This is the best approach for the employee, and for you, the employer.
Early Intervention
DMI becomes involved with your ill or injured employee after just 5 days of absence. Their job is to get in contact with the employee early to help support them in their recovery and return to the workplace. This early contact is key – when employers delay notifying DMI until after an employee has been off work for more than one month, the likelihood of that employee requiring LTD almost triples. The earlier DMI’s involvement, the greater the likelihood of a successful recovery for the employee.
Regular Contact
DMI will establish and maintain regular contact with the ill or injured employee. Because they’re an independent third party, they can also provide you with regular updates on the employee (sharing non-confidential information where appropriate). This regular contact will help the employee feel connected to the workplace and know that their employer cares about them. DMI will also help with practical matters such as providing paperwork related to claiming disability benefits or identifying additional supports and services to aid in the employee’s recovery.
Return to Work
When it’s time, DMI will also create a return-to-work plan for your employee. The employee’s health is paramount – a return to work is only planned when it is safe for the employee. DMI will examine the workplace to determine options for modified duties or hours. Next, they’ll look at the employee’s current abilities and create a plan to marry the two – ensuring that your operational needs are also taken into consideration. Getting an employee back to work as soon as they’re able will help reduce your claim costs; it’s also critical to helping the employee return to pre-disability health.
Work is healthy, and assisting an employee with a prompt recovery ensures that they are able to return to other elements of their life that are important to them too.
Talk to an expert today!
DMI is committed to providing timely support and information to our clients. We have been working with employees and employers nationwide to provide comprehensive end-to-end solutions for their absence and disability management needs.
Interested in learning more about our services and how disability management services can support your company? Request a free review of your claims experience from a DMI expert to determine if you will benefit from DMI’s claims management services.