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Disability and Absence Management

Why Employers Care

The rising costs of employee absence are a growing concern for U.S. companies. The direct costs to employers of unscheduled absences and disability benefits account for more than four percent of payroll.1 The indirect costs, including decreased productivity, the hiring of temporary staff, overtime pay, retraining and diminished customer service, increase the amount of spending even more. However, implementing disability and absence management programs as part of an employer's health and productivity management strategy can reduce costs, minimize the number of employees out on leave and help employees more quickly transition back to work after an illness or injury.

New policy regulations were released in March 2011 when the U.S. Equal Employment Opportunity Commission (EEOC) released the final rule implementing an expansion of the Americans with Disabilities Act (ADA) Amendments Act of 2008 (ADAAA). The final rule maintains the definition of disability, but interprets it more broadly. The expanded definition of disability will qualify new categories of disabilities for potential claims under the ADA.

What Can Employers Do?

While the design of a disability program depends on individual employer characteristics and organizational goals, several tactics may help employers more effectively manage their program:

  • Implement return-to-work programs; they can lower STD and LTD costs by about 30%.
  • Implement Employee Assistance Programs (EAPs).
  • Combine disability benefits programs with predictive models and disease management programs to enhance return-on-investment (ROI).
  • Coordinate with physicians.
  • Coordinate disability benefits programs with other absence and time loss management programs.
  • Adjust employee salaries during absence.

Relevant Tools and Resources Include:

References (show references)

1 Mercer. Survey on Absence and Disability Management; June 2010.

Page last updated: September 13, 2012

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