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IDM Programs

Managing Disability Challenges

Integrated disability management programs promise many benefits, but one size does not fit all.
By: | February 22, 2016 • 5 min read

Employer interest in integrated disability management programs is on the rise. But despite the interest, many professionals are unsure where to start.

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Making it more complicated is the fact that such programs can take many different forms, depending on a company’s needs and pain points.

“If you think of a big software or internet provider, what’s driving lost time there is very different from what’s driving costs for a manufacturing company,” said Phil Bruen, vice president and practice leader, disability and absence growth strategies for MetLife.

“The exposures are different, the workforce is different; there are different skills in different environments.”

Phil Bruen, vice president, MetLife

Phil Bruen, vice president, MetLife

Age factors in as well. In a tech company, there may be a higher proportion of millennials, for example. That could mean less frequent or severe injury claims, but more requests for maternity or paternity leave.

With an aging workforce, on the other hand, employers can expect more chronic conditions and musculoskeletal injuries. Duration of leave may be longer, and effective return-to-work planning will be more critical.

“The skills those folks have are so hard to replace, the employer is going to focus on how to get those people back to work quickly, on a temporary basis if necessary, or through other accommodations,” Bruen said.

Raytheon and Textron, two distinctly different companies, recently detailed their respective integrated disability programs during a webinar. While there were some key similarities in execution, the company programs had different structures.

Raytheon’s Model

Raytheon, a technology company specializing in defense, civil government and cyber security, with 61,000 employees worldwide, focuses on unifying and streamlining the disability management process across four distinct business units, which recently was consolidated down from seven.

Previously, each unit had a different management model in place — some were nurse-run, others were driven by human resources, still others a mix of the two.

With the consolidation, the company shifted to a nurse-run model, said Tina Romain, Raytheon’s human resource absence manager.

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Romain worked with MetLife to build claims teams assigned to each unit to handle short-term and long-term disability benefits.

Under Romain’s direction, Raytheon also assembled a “Lost Time Intervention Team,” composed of the company’s absence management team, representatives from either MetLife (their disability insurer) or Liberty Mutual (their workers’ compensation insurer), and the company’s health care vendor.

The team regularly studies all open cases and identifies possible return-to-work paths for each employee, as well as available services that the employee can utilize, such as wellness programs.

“The skills those folks have are so hard to replace, the employer is going to focus on how to get those people back to work quickly.” — Phil Bruen, vice president, MetLife

The increased emphasis on safe return-to-work planning resulted in 26 percent of all employees who returned to work in 2014 doing so with some type of modification or accommodation.

Compliance with Family and Medical Leave Act and the Americans with Disabilities Act — with their web of regulations that seems to grow more complex each year as amendments are discussed and court cases set precedent — was a critical focus of the program overhaul.

The implementation of a centralized data tracking and reporting system made it easy to track and categorize all claims correctly, ensuring each received the attention it required, and keeping data easily available for audits.

That system also generates monthly reports on wellness program participation, health clinic utilization, total accommodations made for short-term disability and workers’ comp claim trends.

Plus, a single HR dashboard provides an easy interface for employees to request leave or an accommodation, submit an appeal, or check on the progress of their claim.

“Open communication helped by one centralized system ensured that no one falls between the cracks,” Romain said.

The “focused and aligned partnerships with vendors saved 1,227 days [and] $323,000 in 2015 through June, over the same period in 2014,” according to Raytheon.

Textron’s Take

Textron launched its integrated program slightly differently. The $13.9 billion multi-industry company consists of aircraft, defense intelligence, industrial and finance businesses. Textron Aviation is the only segment to tackle an integrated disability program thus far, although the company hopes to expand the program to other units.

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MetLife’s Bruen said that a “pilot program” approach is a good way to develop best practices before attempting to integrate disability management across an entire company.

The occupational risk profile for its 11,000 employees worldwide differs from Raytheon’s non-manufacturing business. In addition, half of its workforce is over 45 years of age, a population that constituted 67 percent of the company’s disability claims.

“On the workers’ comp, occupational side, we’re very good,” said Penny Gilbert, manager of health services for Textron Aviation. “We’ve increased our focus on the non-occupational side in 2009, and we’re getting better and better.”

Similar to Raytheon, Textron Aviation created an integrated reporting dashboard that tracks and generates reports on frequency, severity and cost for both occupational and non-occupational claims. Those metrics are benchmarked against Textron’s other business units and against wider industry trends.

“Open communication helped by one centralized system ensured that no one falls between the cracks.” — Tina Romain, human resource absence manager, Raytheon

Open and regular communication on open claims and return-to-work opportunities is also key, among the integrated disability management team, corporate representatives, vendors and a corporate medical consultant.

A decision to formalize the return-to-work process led to the utilization of functional capacity evaluations, which offer “a clearer understanding of the physical demands and limitations,” Gilbert said.

Since 2009, the integrated program has achieved a 60 percent reduction in lost time days, reduced average length of short-term disability claims by four days, and average costs per claim that are 56 percent lower than the national average.

Targeting Unique Needs

According to Bruen of MetLife, building an integrated disability strategy depends on a company’s specific drivers of lost time, and the unique “constellation of resources available are different for every company.”

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As with any major organizational change, leadership buy-in is critical. Any goals of an integrated disability program — whether it is reduced cost per claim, fewer claims overall or faster return to work — must align with executives’ broader goals and priorities for the organization.

“Organizational silos are also a barrier,” Bruen said. “Sometimes structure can get in the way.”

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.

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In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.

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Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”

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How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.

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One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]