As human resource managers, you can better serve employees and protect your company's bottom line by reviewing the way you integrate disability and health benefits.

Your peers shared best practices in a recent study by the Disability Management Employer Coalition and Liberty Mutual. As part of a leadership series, that study brought together more than 80 HR professionals from more than 60 midsize and large companies in several regional meetings to explore the common ingredients of successful integrated disability management programs.

Such programs help streamline operations and boost efficiency by jointly managing a range of benefits, including short-term and long-term disability, workers compensation and family and medical leave.

An integrated disability management program could cut your company's benefit costs by 15% to 35%, depending on which benefits you bring together and how closely you managed them in the past. Integration also helps you better serve employees by offering a single source for getting information and filing claims on a range of benefits.

You can see the nine IDM best practices identified by your peers – together with examples of how employers applied each at www.libertymutual.com/groupbenefits.

Best practices

The following are four of the nine best practices for administering integrated disability management programs:

• Set clear goals and outcomes for your IDM program. There is no one-size-fits-all approach to IDM. Start by clearly defining what you want to accomplish from integration.

• Clearly communicate your benefit policies and procedures to employees and vendors. Poor communication can quickly derail an IDM initiative by creating employee and vendor confusion over benefit policies and procedures. This confusion can offset the potential savings from jointly managing the selected benefits.

• Promote accountability among employees, individual departments and business units. Successfully capturing the benefits of IDM takes the active involvement of all employees, departments and locations throughout a company. Nothing gains that involvement like accountability, according to Leadership Series participants.

• Capture and make the most of your data. Knowing the performance of your IDM program lets you benchmark and improve that performance over time. It also helps you objectively report on the program to senior management.

Case in Point

Here are examples of how several companies effectively applied some of the best practices.

To promote accountability, American Electric Power, one of the nation's largest electric utilities, tracks the cost of its integrated benefits by operating unit, department and location.

The integrated disability management department distributes reports throughout the company that track each unit's total cost, claim counts and number of absence hours. Managers use these numbers to compare organizational performance, giving them an incentive to support integration.

Allowing individual units to compare performance leads to lower absence costs by sparking competition. It also lets the company's corporate benefits department spot units that might gain from extra help in managing employee absences.

To capture and make the most of data, Abbott, a global manufacturer of medical, nutritional and pharmaceutical products, takes an integrated approach to managing its workers compensation, short-term medical, extended disability and FMLA programs.

Previously, each individual department manually tracked information on each of these programs. As a result, the company was not able to understand the total cost of these programs or compare the performance of individual operating units.

Now, Abbott consistently tracks program information throughout all units and locations in the United States. The company analyzes that performance each quarter to spot trends. For example, it tracks the incidence rates for various leave programs by division. It can quickly and easily identify the changing needs of its employees and adjust its benefit offerings to better serve them.

Meanwhile, Intel's efforts to integrate disability and FMLA underscore the benefits of clear communication. The tech company's FMLA and disability vendor contacts employees on disability or FMLA leave one week prior to their scheduled return, confirming the day each individual will come back to work. The vendor shares that information with the employee's supervisor.

Intel gains three advantages from this communication protocol. First, it eliminates any wage and benefit overpayments that could occur if the employee doesn't come back to work. Second, it ensures that the employee does not return to work before he or she is ready, making new absences for the same condition less likely. Third, it lets the supervisor take an active role in welcoming the individual back to work.—E.B.N.

Nazneen Vimadalal is a vice president at Liberty Mutual. Joe Wozniak is chief administrative officer of the Disability Management Employer Coalition. To read a white paper on the survey findings from Liberty Mutual and DMEC, click here..