2222222222

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.

Advertisement




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.

Advertisement




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.

Advertisement




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.”

Advertisement




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

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

Advertisement




But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

Advertisement




Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

_________________________________________________________________

Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]