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Published: 2008-03-26

Beyond Disability Management



Employees are one of the engines that drive business. Not surprisingly, the absent employee, regardless the reason or the length of the absence, comes with a high price tag -- not just the obvious costs in lost productivity, higher cost of benefits, and higher insurance premiums, but in numerous less tangible ways.

Legislation at both the federal and state level has had an enormous impact on companies' leave policies and practices. The enactment of the Americans with Disabilities Act ("ADA") and the Family Medical Leave Act, as well as the seemingly endless expansion of federal and state handicap laws, has complicated companies' own leave policies. As anyone who has tried to navigate ADA/FMLA waters knows well, the laws can not only be counter-intuitive, but the wrong call, even when unwitting, can be a costly proposition.

Disability management has been a popular topic in the literature and at employment seminars. Because of rising workers' compensation costs and the enactment of the ADA, employers have been urged to take control of their disability-related policies and costs and, in particular, to implement "DPMs" (disability management programs"). Alarmed by statistics that show that costs associated with workplace disability average 8% of payroll, and intrigued by reports of impressive savings, both in the bottom line and in recovered work days, employers have been, if not clamoring, at least paying attention to, this advice. One estimate, by Northwestern National Life Insurance Company, places the national costs of disability at $200 billion a year by the year 2000. Companies have sprung up offering a variety of DPMs, customized to fit the particular needs of the large as well as the mid-size and small employer, in both the private and public sector.

This article will not engage in an in-depth look at disability management -- what is it and why we need it. There are many excellent and authoritative texts and articles available on the subject. Rather, this article will discuss ways to move beyond simply managing disability and toward developing an integrated approach to dealing effectively with the absent employee. The result to be achieved by moving beyond disability management is not that different from the objectives that has been pushing employers into this arena: reducing costs, increasing productivity, and ensuring legal compliance.

Demographic Considerations

Advocates of disability management point to demographics and globalization as irrefutable reasons to put strategies into place to better manage the absent employee. Demographically, Americans are getting older. By the year 2020, one out of every three Americans will be over fifty. The probability of becoming disabled between the ages of 20 and 60 is almost one in five for men and more than one in seven for women. The cumulative impact of successive injuries over a work-life becomes more disabling the older we get. Hence, as we age, disability is likely to be an increasing and, if left unattended, an increasingly expensive fact of life for employees.

Economic Considerations

The U.S. economy is experiencing intense competition from abroad, making a highly productive work force critical to survival. A demanding, unsupportive work environment is unlikely to realize the potential of the work force, creating a hidden but costly drain on productivity.

Legal Considerations

Finally, most employers are by now acutely aware that hiring and employment decisions which are based, even in part on disability, may subject the employer to liability under the ADA. The ADA prohibits discrimination on the basis of disability against a "qualified individual with a disability." Prohibited practices include those affecting hiring, promotion, work assignments, transfers, job training, compensation, discharge, or any other aspect of the employment relationship. Employers are required to make "reasonable accommodation" to the known disability of an applicant or employee unless doing so would impose an "undue hardship" on the organization. Employers do not have to hire, reinstate, or promote someone if there is evidence that the individual's disability will pose a "direct threat" to his own health or safety, or that of others.

Internal Coordination

Problems can arise when implementation of a company's leave policies is carried out by different departments or different individuals. Therefore, a key component of an effective disability management program is coordination. Depending upon the size of the organization, a coordinating committee, composed of representatives from the departments involved in implementing the company's leave policies, can work well. These departments may include human resources, benefits, EAP, risk management, legal, and production, among others.

The objective of the coordinating committee is to ensure that "the right hand knows what the left hand is doing." Instead of piecemeal, ad hoc decisions, the committee's function is to provide an integrated approach to disability management. The committee ensures consistency, by making sure that the various departments of the company understand and can therefore tap into the resources of the other departments, and that the activities of the various departments do not overlap or contradict each other. Everyone must understand how he or she fits into the big picture. The committee also collects, processes and reports data, so that outcomes can be measured and a cost-benefit analysis can be communicated to upper management. In a smaller organization, one person can act as the company coordinator.

In addition to communication among all the departments or individuals of a company that are involved in employing or terminating a disabled worker, a key component to successful disability management is a working relationship with public, nonprofit and private rehabilitation facilities. Know the name of someone who can be called on for advice as soon as the company foresees a problem relating to a worker's disability.

Case Managers

A formalized disability management program utilizes case managers who handle individual cases, from the onset of disability to the return to work. Social workers, rehabilitation counselors, nurses, and psychologists are appropriate personnel to carry out the case manager's role. This person should be conversant in the functions and resources of the company's various departments and capable of accessing these resources to accomplish the ultimate goal of returning the employee to gainful employment. While a case manager is not likely to be affordable to small employers, the concept is adaptable to small employers.

An Integrated Approach

Ideally, a disability management program includes several components, not all of which are within the range of small or even some medium-size employers. Even if your company has not formally embraced the concept of disability management, there are compelling reasons to at least have processes in place which ensure that the various departments or persons who deal with leave-related personnel issues -- the employee's supervisor, risk management, human resources, benefits, employee assistance, and legal -- communicate with each other on a predictable basis about individual cases of requests for time off. A few examples illustrate why.

Suppose you have an employee who is disliked and mistrusted by co-workers, meddles in an inappropriate manner with co-workers' conversations, and is probably emotionally unstable. In other respects, he is good at his job. His direct supervisor and human resources view his behavior as performance-based and document every incident, hoping to amass enough disciplinary actions to terminate him, which eventually happens. The employee then sues, claiming that he suffers from depression and anxiety, as a result of his co-workers' hostility and harassment, and that his employer discriminated against him in violation of the ADA. The lawsuit may have been avoided if the supervisor and human resources had involved employee assistance and legal at the first signs of trouble. The employer might also have been able to salvage an otherwise good employee. Thus, thinking about disability management from an integrated standpoint can go a long way toward ensuring compliance with ADA and other legal requirements and avoiding costly and unnecessary litigation.