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Integrating disability, leave, workers' compensation, health and other management

initiatives into one complete program can result in lower costs and more efficient processes as w ell

as higher productivity and employee satisfaction.

Benefits Integration Boosts Health, Productivity by | Karen Trumbull English

benefits integration

W ith the ongoing transfor­ mation of the U.S. health care system, and as com­ panies of all sizes and in­

dustries begin to recognize the impact of the Affordable Care Act, more attention is being placed on integrating disabil­ ity and absence management programs with employer health plans. Addressing health, disability and absence along with employee assistance programs (EAPs) and behavioral health, wellness and population management forms a health and productivity management (HPM) platform that goes a long way to making a workplace healthier, happier, and more productive and efficient, while at the same time reducing overall cost.

W hat Are the Core Components of an Integrated Solution?

To understand the proper integra­ tion of health and productivity, it is important to define the core programs involved. Three main components comprise a fully integrated health and productivity solution:

1. Integrated disability management (IDM) brings together disability,

Fam ily and M edical Leave Act (FMLA) and o th er leave types (and ideally workers’ compensa­ tion) as a baseline. These p ro ­ gram s are o rg a n iz e d th ro u g h coordinated plan and policy lan­ guage, a single intake process, com m on case managem ent and re tu rn -to -w o rk (RTW ) p ro to ­ cols, and integrated data, track­ ing and reporting of metrics and trends.

2. Total absence management (TAM) encompasses all of the disability management measures involved in an IDM program while tying in any type of reason an employee is away fro m w ork. B rin g in g other time-off programs together with disability and leave supports workforce planning and budget­ ing activities that are key to both employer productivity and em ­ ployee engagement.

3. H PM is a fully in teg rated p ro ­ gram that takes into account all that is included in IDM and TAM while also linking health, an EAP and behavioral health, wellness

and population management (see the figure). HPM is the platform an employer should be working tow ard as it considers overall health and wellness of its popula­ tion, enables true strategic plan­ ning for the business and p osi­ tions human resources (HR) as a strong business partner.

W hy Integrate Benefits? As alluded to in the opening of this

article, by implementing a comprehen­ sive health and productivity program, an employer stands to benefit in a num ­ ber of important ways:1

• Better tracking and reporting • Easier and more consistent ad­

ministration across programs • Improved regulatory compliance • Enhanced employee experience

and engagement • Reduced costs and stronger pro­

ductivity outcomes. In addition, these programs give

employers a mechanism to centralize the management of their programs2 so that management, supervisors and em­ ployees have one place for all adm in­ istration. W hether this means an out­ sourced vendor or an internal “go-to” person for questions, centralized m an­ agement promotes fair and equal treat­ ment across the entire organization.

This treatment becomes essential as FMLA continues to be clarified; the number of state, municipal and county leave laws keeps increasing; the Ameri­ cans with Disabilities Act Amendments Act (ADAAA) grows in complexity; health management initiatives become more prominent; and the importance of returning employees to work in a safe and productive m anner is height­ ened.

Core Components of a Fully Integrated H P M Solution

H ealth and Productivity M a n ag e m e n t (H P M )

benefits magazine October 2015

benefits integration

It also happens to be crucial in maintaining and improv­ ing employee engagement. At a time when employees are being afforded more choice in their benefit plan structure— through consumer-driven health plans, exchanges as pur­ chasing forums, voluntary options and the like—compre­ hensive programs provide a clear path forward.

How Does an Organization Get Started? The type of deep integration required to realize these ben­

efits is quite a deviation from what many are used to, and these programs do not come without effort. Although inte­ gration has become easier over time and the marketplace has matured to provide stronger options, employers may face a number of constraints as they embark on the path toward integration. Hurdles often include lack of internal resources and budget as well as the uncertainty of proper implementa­ tion steps.

Experienced consultants and brokers can help organiza­ tions through the process. The vendor community has ma­ tured significantly not only in its offerings, but also in the resources that are dedicated to implementation and account management. For organizations willing to expend the effort and plan it properly, the payoffs of an integrated health and productivity program are great.

While nearly every employer situation is different, some general steps are common among most integration projects:

• Establish a philosophy. The underlying philosophy will affect an employer’s early and continual decisions, and staff needs to be thinking comprehensively. Whether an employer is integrating to support safe and productive return to work (RTW) or to encourage employee health and wellness, this purpose should be stated early and often and remembered as the program evolves.

• Set a long-term strategy. Although a fully integrated HPM approach is best, implementing in phases often is more realistic. The program can start small and be expanded over time. Bringing together the compo­ nents of IDM is most common, but how to proceed may depend on how much influence those developing the program have over other benefits and how much change an organization can handle at once.

• Create a reflective model. Outsourcing program management to an insurance company or third-party adm inistrator is growing in popularity. However,

some employers prefer to keep the management in- house or establish a cosourced structure. This will depend on what’s best for a company’s composition and culture and how staff and systems can be utilized best.

• Gain senior management buy-in. Because there are so many programs involved and resources across HR, legal, benefits, payroll and others need to be aligned, it’s important that senior management be committed and that a framework for change management be in place.

• Make a formal business case. Documenting the ratio­ nale for change and establishing a baseline of current costs will be important at the beginning. Employers that take this step have something to turn back to and measure their success over time.

More practical activities, which will depend on the or­ ganization’s overall strategy and which programs it decides to bring together initially, include aligning plan and policy design, determining the best funding structure, developing processes starting with intake and concluding with claim closure, and establishing the metrics the organization will track over time. For example, if IDM is the first step, this translates to:

• Analyzing short-term disability, long-term disability, FMLA and other leave policies for common language and RTW incentives, as well as linkages to health and other management programs

• Conducting a financial analysis to determine if in­ sured, self-insured or a combination approach is most effective given the company’s claim experience and risk tolerance

Education The Americans With Disabilities Act (ADA) FMLA

Short and Long Term Disability

Visit www.ifebp.org/elearning for more information.

From the Bookstore Handbook of Employee Benefits: Health and Group Benefits Jerry Rosenbloom. McGraw Hill. 2011. Visit www.ifebp.org/books.asp78915for more details.

October 2015 b e n e fits m a g a z in e

benefits integration

• Integrating the management of various types o f leave w ith disability, health, mental health and wellness benefits makes tracking, reporting and compliance more efficient.

• Centralized management of all of these programs promotes fa ir and equal treatm ent throughout an organization.

• The underlying philosophy fo r integrating benefits w ill affect early decisions and how the program evolves.

• Integration can be done in phases— often by first bringing together disability management and leave types such as FMLA— or all at once.

• W hether program management w ill be outsourced or kept in-house w ill depend on a company's composition, culture and staff and system capabilities.

Karen Trumbull English, ACI, ARM, AU, CPCU, is a senior consultant and partner with Spring Consulting Group, LLC (formerly Watson Wyatt Insurance & Financial Services,

Inc.). She has more than 20 years of experience in the insurance industry with an emphasis on product design, process improvement, bench­ marking and research. English’s areas of focus include both health and welfare and property/ casualty, with particular emphasis on disability, absence management, health management, voluntary offerings and captive solutions. English has her B.B.A. degree in risk management and human resources from University of Wisconsin- Madison and her M.B.A. degree in finance from University of Minnesota-Carlson School of Management. She also is a licensed insurance broker.

• Establishing touch points for employee absence notifi­ cation, documentation, case management, RTW ac­ tivities, health management referral, and communica­ tion to supervisors/m anagers and other internal departments and external partners

• Mapping technology to support tracking of absence

and how various systems used need to link to each other and report data to key stakeholders.

Spring Consulting has conducted research into trends in HPM among employers, employees and providers to take a periodic pulse of the industry and identify best practices and potential pitfalls throughout the integration process. Trends seen in the most recent health and productivity re­ search are:

• Integration continues to increase. As the years go on, both employers and vendors are prepared to bring more and more programs together. For example, while IDM used to include only short- and long-term dis­ ability and FMLA, it now expands to other leaves of absence (i.e., military leave, jury duty, bereavement leave, company-specific leave, and state and munici­ pal/county leaves) and ADAAA support.

• Options are available for all employer sizes. Inte­ grated plan design across disability, health, workers’ com pensation and process adm inistration in the forms of outsourcing, cosourcing or technology tools used to be available only to very large firms but is now offered to companies with as few as 500 lives or even fewer.

• Health management programs are expanding. Most employers offer EAP and behavioral health, wellness and numerous other initiatives that easily can be in­ corporated into the disability and absence manage­ ment process through referrals and outcome manage­ ment.

• Regulatory activity is increasing program reach. Due to all the case activity and clarification provided by the Equal Employment Opportunity Commission, the Department of Labor and other agencies, ADAAA is prioritized as highly as FMLA, and paid sick leave laws are driving the need for a total absence manage­ ment approach.

• Gaps are being filled with voluntary products. Where employers are not able to offer the desired lev­ els or any disability coverage or, because of consumer- driven health plans, employees could benefit from having critical illness, accident or hospital indemnity coverage, employers are making them available on an employee-paid basis.

• Systems and automation are progressing. Technol-

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b e n e fits in te g ra tio n

ogy and connected devices are making their way into the health and productivity space, making it more user-friendly and administratively efficient, which can translate directly to a better employee experience.

W h a t O u t c o m e s C a n a n O r g a n iz a t io n E x p e c t? The type of outcomes an organization can achieve from

integration will depend, of course, on how much change is made at once and will include but may not be limited to:

• Increased RTW rates • Reduced direct costs of disability, workers’ compensa­

tion and/or health benefits • Enhanced employee satisfaction • Lower claim incidence rates • Better advance scheduling of absences • Decreased absenteeism • Improved employee experience • Higher employee health and productivity.

A T re n d T h a t M a k e s S e n s e Whether it is a step-by-step process, or a complete

overhaul of multiple programs at once, moving toward the integration of disability, leave, workers’ compensa­ tion, health and other management initiatives into one complete program is of great benefit to employers in this age of health care reform. In a time when health care costs and plan control are on the forefront of just about every employer’s mind, the cost reductions and process efficiencies, not to mention increases in productivity and employee satisfaction, make integration a very attractive option for employers of all sizes. O

E n d n o te s

1. Spring Consulting Group’s Integrated Disability, Absence and Health Management Employer Survey 2013/2014.

2. DMEC and Spring Consulting Groups Employer Leave Management Survey, 2014.

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