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Disability and Disability Insurance

Industry Best Practices in Benefits Integration

Marcia Carruthers | May 1, 2014

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In the previous issue on benefits integration, the concept of implementing an integrated program to coordinate benefits was explored as a pathway to controlling costs and increasing productivity. Over 20 years of employer experience have shown that a gradual phased approach works best. Phase I involves the integration of disability—workers compensation (WC) and short- and long-term disability (STD, LTD)—with sick/paid time off leave and family medical leave (FML) administration. In Phase II, the focus is on health and incorporating health management initiatives such as wellness, employee assistance programs (EAPs), and behavioral health and disease and health management programs. Integration of federal, state, and local compliance programs, like the Americans with Disability Act Amendments Act (ADAAA) and Genetic Information Nondiscrimination Act (GINA), are now other critical components.

In the current column, we will review industry best practices, as well as program goals and achievements that lead to sustainable and successful programs. An integration checklist is provided to prompt questions about your workplace environment and determine the level of integration or coordination that might work best.

According to the 2013 Disability Management Employer Coalition and Spring Consulting Employer Leave Management Survey, integration of the administration of disability claims with other employee leave programs, such as FML and WC, is well under way. Fully 83 percent of employers surveyed are now integrating STD with other employee leave programs (up from 46 percent in 2011). Similar results were seen for LTD integration where 77 percent of employers integrate with other leave programs (up over 50 percent from 2 years ago).

To get started, or improve on existing models, there are several best practices that can be followed, which apply to any and all programs and processes. These can be accomplished internally and independently, or with the assistance of a benefits consultant/broker to expedite the process.

Best Practice 1: Articulate Goals and Expected Outcomes for Your Company's Integrated Program

Integration can embrace many or just a few parts of your overall benefit program. See link at the end of the article for an integration checklist. The possibilities can be overwhelming. Prior to implementing any changes, decide as an organization what you want to achieve.

  • Evaluate your current benefits program and identify areas for improvement. Determine which areas require immediate attention and which can be part of future program enhancements.
  • Review your system infrastructure and assess its capabilities. Implementing enhancements, such as single claim intake or integrated case management and reporting, may require technology upgrades or outsourcing.
  • Be specific. Don't try to do too much at once. Develop a clear implementation plan that provides enough time to make the necessary internal and external process changes.

Best Practice 2: Clearly Communicate Benefit Policies and Procedures to Your Employees and Your Vendors

When implementing benefits changes, poor communication can cause confusion and misinterpretation of program policies or processes. Establish a method to clearly communicate with your employees and vendors. If employees do not understand or are not aware of changes, program modifications could result in increased frustration and offset any cost savings.

  • Make information about your benefits programs accessible to employees. Provide benefits information through employee training, the Internet, an intranet, direct mail campaigns, or internal personnel.
  • Enforce change consistently across your organization, limiting "one-offs" and exceptions.
  • Ensure that the employees managing your benefit programs have the proper training and resources.
  • Educate your vendor(s) about your benefit programs and communication procedures.

Best Practice 3: Designate an Internal Team to Manage Your Program and Monitor Vendors

Different departments may be responsible for collaborating with external vendors and for the day-to-day administration of an organization's integrated program. Having a central resource to manage the overall program and to monitor vendor performance improves consistency and limits costs resulting from administrative errors or duplicate efforts.

  • Appoint an internal "advisory" team to communicate and collaborate with external vendors.
  • Develop cross-functional teams to assist with program changes (human resources, payroll, legal, etc.).
  • Centralize administration to facilitate daily management, tracking, and reporting.
  • Provide a central resource to aid managers/supervisors and employees with the return to work (RTW) process.

Best Practice 4: Promote Accountability Among Employees, Individual Departments, and Business Units

An organization may have difficulty integrating its benefit offerings if employees and managers do not understand benefit policies or how their actions affect program success. To achieve favorable outcomes, employers should promote accountability among all internal stakeholders.

  • Leverage charge-backs as a method for demonstrating absence costs to individual departments or locations.
  • Share individual business unit total corporate-wide absence costs or hours to encourage inter-unit collaboration and healthy competition to reduce program costs.
  • Include program metrics (such as total absence costs that include direct and indirect costs, as this can sometimes be more than the total healthcare expenditure) as part of performance reviews or bonus awards.
  • Provide incentives to employees for participation in wellness and other company-sponsored benefit programs.

Best Practice 5: Request Regular Feedback from Key Stakeholders

Employers should request feedback from employees and vendors to ensure that their integrated disability management programs continue to be well administered. This involvement reduces confusion and frustration and facilitates the acceptance and implementation of any changes.

  • Request feedback from employees on your program's service quality, whether it is administered internally or by an outside vendor.
  • Encourage your employees to participate in self-training programs that will enhance their understanding of your benefits program.
  • Request input from union representatives prior to making any changes.
  • Consider program changes as a result of feedback.

Best Practice 6: Challenge Your Vendor to Customize Its Product and Process to Best Meet Your Needs

Certain parts of an employer's program may be managed externally by vendors. A vendor's willingness to work with you and meet your organization's needs will facilitate overall program administration and increase employee satisfaction.

  • Spend time to seek out the best vendors; set up a review process that includes a detailed request for proposal, a site visit, an information technology review, and a reference check.
  • Include performance guarantees as a method to measure vendor performance.
  • Request a dedicated contact from the vendor to service your program and answer questions.
  • Review program details with your vendor prior to implementation.
  • Document all policies and procedures and make sure your benefits department has the appropriate training to assist with any programs administered externally.

Best Practice 7: Leverage Technology to Gain Efficiencies, but Understand Its Limitations

An organization's ability to successfully develop an integrated benefits program is highly dependent on its internal systems and those of its vendors. While a flexible and secure technology infrastructure can streamline administration, employers should also be aware of any limitations that could delay process enhancements.

  • For externally administered programs, determine your vendor's ability to interact with your organization's payroll and human resource systems. In addition, ensure that your systems have the flexibility to incorporate changes, such as policy updates or new reporting procedures.
  • Confirm that you or your vendor's systems meet all Health Insurance Portability and Accountability Act (HIPAA) privacy regulations and that access is limited to authorized individuals or groups.
  • Determine your vendor's ability to work with other outside providers. For example, does your disability carrier partner with one EAP or disease management company, or can it "plug and play" with your preferred providers?
  • Utilize a centralized data storage system that makes program information easily accessible to appropriate departments.
  • Develop or purchase a strong case management system that allows for the coordination of leaves and offsetting of benefit payments.
  • If your systems are internal, develop a business continuity plan. If your program is outsourced, evaluate your vendor's plans.

Best Practice 8: Capture and Make the Most of Your Data

Capturing and reviewing program data are critical for measuring internal and external performance. Employers should collect information before and after a change to evaluate its impact. These results may also help an organization to better focus its energy and resources for future planning.

  • Store your program data in a central location.
  • Utilize program results, such as costs and utilization, to monitor both internal and external performance.
  • Be consistent and credible when sharing information, reporting both positive and negative outcomes.
  • Clearly communicate which types of information should be captured in addition to the method and frequency of distribution.

Best Practice 9: Integration Is a Dynamic Process; Continue To Monitor Your Program and Be Ready To Recommend Enhancements

Proactively adjusting to and taking advantage of both expected and unexpected events enable an organization to maximize its integrated program results. Employers should routinely evaluate their current programs and vendor relationships to identify changes that may improve overall plan integration and administration.

  • Frequently assess your benefit plans to identify which areas are working and which may require additional attention.
  • Participate in benefits-related conferences and surveys to learn about the latest program innovations and to capitalize on other organizations' findings and key learnings.
  • Benchmark your program versus those of your peers on a regular basis to remain competitive and current.
  • Leverage the expertise and feedback of internal sources and external vendors when updating or changing policies or processes.

Integrated Program Goals and Achievement

Capturing cost savings from integrated programs is usually a primary goal. Results from these programs vary by employer, but typically they produce decreased durations, increased RTW rates, and decreased employer time necessary to manage these programs. Given employers' goals in integrating their benefits, it is not surprising that anywhere from 10 to 15 percent of direct program savings can be made with probably 5 to 7 percent of that resulting from what can be done between WC and disability and taking a common approach to RTW. By reporting these claims through a single intake process, redundant intake and call center activity and cost can be removed.

An employee's satisfaction with the process is improved as complexity and confusion are decreased or eliminated. Tracking both occupational and nonoccupational absences through one process can eliminate duplication of coverage and therefore duplicate benefit payments.

RTW rate improvement due to consistent treatment protocols across WC and disability impacts duration and, therefore, costs. In the environment of increasing legal and legislative compliance issues, ensured compliance can avoid potentially large legal costs due to incomplete or inaccurate tracking of time that should have been job protected.

As we move into the era of the Affordable Care Act with more emphasis on wellness and prevention, some employers are linking wellness and health coaching to their LTD plans to reduce premium costs and help employees return to work faster. Companies are increasingly asking about ways to leverage wellness benefits that have been effective on the health side. This cutting edge movement to integrate disability leave with managing WC and health programs, plus chronic disease management and wellness initiatives, is being explored by some innovative early adopters that see the potential synergies, savings, and health benefits.

As you look across your organization and consider the possibility of integrating your WC and benefits programs, the following checklist will prompt you to answer particular questions about your organization and determine the extent of integration you want to consider implementing. Focusing on enhanced integration will help you keep in step with other forward-thinking companies to achieve your risk and benefits goals.

Table 1. Integration Checklist
Key Questions Yes/No Comments

Which internal departments currently handle your wc and disability programs?


Risk Management

Employment Benefits



Risk Management

Employee Benefits



Risk Management

Employee Benefits



Risk Management

Employee Benefits


Do you apply case management across the programs below? And can the philosophy be coordinated across wc and disability?




Do your disability and WC policies contain RTW incentive wording that can be relied on in the claims administration process?




Do you have formal RTW policies and procedures in place for the programs below? And could they be coordinated?




Are there health and productivity management programs your organization employs that could be made part of the disability and WC management process?

EAP/Behavioral Health

Group Health Care

Disease Management




Disability Management Employer Coalition (DMEC), Tools of the Trade: A Compilation of Programs and Processes for the Absence, Disability, Health, and Productivity Professional, 2009.

Disability Management Employer Coalition (DMEC) and Spring Consulting, 2013 Employer Leave Management Survey, January 2014.

"Firms Link Wellness to Disability Benefits," Business Insurance, March 17, 2014.

Marcia Carruthers, MBA, ARM, CPDM, is cofounder and chairman of the Disability Management Employer Coalition (DMEC), a San Diego-based nonprofit trade association providing educational resources to employers in the area of disability, absence, health, and productivity. For information, visit

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