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Disability management is the term used to describe the active management of workplace absence. Disability management involves not simply the processing of claims under an employer's STD or LTD benefits program but rather on the active management of the costs associated with these plans. Many employers have embraced this concept and as a result, many insurance companies have improved the management of disability claims by adding internal assessment resources, such as specialized medical practitioners. In addition, they have concentrated on the concept of "early intervention" as key in reducing costs.

With the increasingly high profile of LTD benefits among employers, organizations that provide services such as on-site nursing support, management software for the tracking of claims, and access to preferred provider networks are being readily established. These health management organizations approach employers directly to market their services emphasizing the potential for reducing the employer's costs for LTD benefit plans.

Early Intervention

In the 1970's and early 1980's, insurance companies did not wish to become involved in an LTD claim until approximately 30 to 60 days prior to the commencement of benefit payments. Since most LTD benefits plans had a four-month qualifying period, this meant that the disabled individual would typically be off work for 60 to 90 days before being approached by the insurance company to determine potential for rehabilitation and, where appropriate, vocational assessment and/or retraining. Insurance companies felt then that it was an unnecessary expense to become involved in the claim during the short-term period.

Through reviews of actual claims experience, insurance companies now understand the importance of "early intervention". Insurers recognize that the longer an individual is on claim, the more difficult it is to return the individual to active employment. Early intervention assessments normally begin to take place withing the first month of absence from the workplace. Further, an effective disability management plan will track trends in absenteeism and red flag instances where an individual has been off a number of times duraing a fixed period.

An employer may introduce the insurance company to the employee early, so that the employer may take an arm's length approach to adjudicating the claim. The insurance company's involvement will remove the employee's impression that the employer makes the decision on claims payment. Additionally, the insurance company has the resources for rehabilitive assistance and medical intervention that will help in the management of the claim.

Other Preventative Measures

Disability management programs also attempt to deal with disability problems by anticipating negative outcomes and delivering solutions that are both preventative and reactive to the disabilities that invariable occur. Employers can choose from either a single disability management source or may select a variety of providers for the numerous disability management subsets.

Lifestyle issues have always been an important element in prevention, but are becoming more important as the workforce ages. Disability management programs encourage employees to lead a healthy lifestyle, to excercise in moderation, and to be aware of the potential effects of being overweight, or smoking, or using alchohol to excess, and or poor sleep and exercise habits. Programs typically feature health education seminars and disease management programs such as blood pressure testing and weight loss clinics.

Employee Assistance Programs (EAP) is another part of promoting a healthy workforce in the context of disability management. The maintenance of confidentiality provides employees with a level of comfort that encourages them to seek assistance from EAP counsellors. Absenteeism controls are an important element of disability management as well. Most lengthy disabilities occur as a result of medical problems that develop and grow over a period of time. Often, a change in attendance patterns can be viewed as a barometer for larger medical problems down the road.


Early intervention in the claim typically identifies the nature of the disability, the possibility of the disability becoming long term, and the potential to rehabilitate the disabled employee either into modified duties or back to their original job. Rehabilitation, in the context of group disability coverage is defined as the efforts undertaken on behalf of a disabled employee to assist the employee in returning to some form of gainful work.

With the rapid increase in claims expenses in the 1980's, many insurance carriers sought assistance from specialty providers in the private sector to assist them in rehabilitation initiatives. This was another reason for the increase in rehabilitation providers. The scope and range of services available from insurance companies and from third party rehabilitation providers vary in quality and cost. An effective rehabilitation approach must include the following services:

  • Medical staff that can assess the severity of the impairment, nature of the disability, and the effectiveness of treatment
  • A network of professional rehabilitation counsellors available to work with the disabled employee
  • Access to specialty providers to assess special claims
  • Access to medical practitioners to obtain independent medical evidence on a claim
  • Systems and software to effectively track incidence and causes of disabilities and provide detailed reports to the employer

The most common approach taken during the rehabilitation process is to focus on returning disabled employees to their regular occupation. This may require the employer to either make temporary or permanent modifications to an employee's work environment or job duties. In some instances, especially with smaller employers, the volume of work may not make it economically viable to provide alternative jobs to an employee on a permanent basis. For these employers, the insurance company should also include vocational assessment in the rehabilitation study to determine the individual's potential for retraining into another occupation.

Effective rehabilitation includes communicating with all key stakeholders including the disabled employee's attending physician in order to ensure a complete understanding of the employee's job duties and the availability of modified working arrangements. This will provide the attending physician with information to better determine the individual's medical ability to return to his/her own job or to support the rehabilitation plan for modified duties.

Once the disabled employee has been returned to the workplace, the rehabilitation counseling may continue to ensure successful achievement of the predetermined goals. By properly communicating the nature of the return to work and what is required of the employer, the employee, and the treatment team, the rehabilitation consultant can help establish an environment that will support the employee's successful return to work.