U.S. employers received an unexpected, but welcome fallout from the economic recession -- fewer short and long-term disability claims and lower short-term disability costs per claim, according to a new report by the National Business Group on Health, a non-profit association of more than 300 large U.S. employers. Long-term disability costs, however, jumped 25%.
The Employer Measure of Productivity, Absence and Quality (EMPAQ) annual survey found that the incidence for short-term disability (STD) claims declined 17.3% from 8.1 claims per 100 covered employees in 2008 to 6.7 claims per 100 covered employees in 2009. Long-term disability (LTD) claims meanwhile dropped 26% from 4.6 claims per 1,000 employees in 2008 to 3.4 in 2009. The EMPAQ survey also found that STD costs declined 15.9% from $343 per employee in 2008 to $296 per employee in 2009. LTD costs, however, jumped by more than 25% from $10,507 per claim in 2008 to $13,226 per claim in 2009. The EMPAQ Annual Survey is based on responses from 648 large and mid-sized U.S. companies.
"When the recession began, many employers anticipated their short-term disability claims would increase. When employees experience anxiety regarding impending workforce reductions, their subsequent behavior often causes employers to feel the impact in their benefit plans," said Helen Darling, President and CEO of the National Business Group on Health. "However, this recession appears to have caused a somewhat opposite effect, with decreases in claims in 2009. The collapse of the housing marketing and the unemployment picture may have caused employees to delay taking time off from work, especially for elective medical procedures."
The EMPAQ Annual Survey also provided results on other employer absence programs. Survey respondents reported a median annual incidence for Family and Medical Leave Act (FMLA) claims of 14.9 per 100 covered employees in 2009, an increase from 12.5 in 2008. The report noted that for a large employer, an increase in the number of FMLA claims from one year to the next can have a substantial impact on productivity and its bottom line, something particularly hard to absorb in a down economy. The incidence of workers' compensation claims declined to 2.6 per 100 employees in 2009 compared to 3.7 in 2008.
"Even as the economy begins to improve, companies remain under growing pressure to constrain costs while at the same time increase the productivity of their workers. We expect companies will be taking a hard look at all of their absence programs. Identifying areas where better tracking, management and reporting for these programs will be all that more critical," concluded Darling