Employers that develop plans connecting Family and Medical Leave Act benefits with disability programs are finding it easier to manage costs and track employee absences, according to insurers that have studied the trend and offer integration management services.

UnumProvident, which published a study in May on the relationship between FMLA and other benefit programs, states that linking FMLA with disability can reduce the delay in claims submission and help identify individuals that are at a higher risk of filing repeat claims. The Chattanooga, Tenn.-based insurer, whose research followed 144,460 employees, found that those employers that coordinated FMLA with disability programs were more likely to have workers out for shorter periods of time compared to employers that managed them separately - an average of 2.9 days for integrated programs, compared to 7.8 days for stand-alone short-term disability programs.

"The biggest challenge for employers is managing incremental leave, because it's the most open for choice," says Carol Davis, senior director of health and productivity development at UnumProvident. The insurer provides integrated management of FMLA and disability through its "leave administrative services" program for its clients that currently provide both. "We'll ascertain whether the employee has completed all the forms and if they are approved for leave or not," Davis adds.

UnumProvident's research and other market data indicates it would behoove benefits managers to investigate integrated service programs so they could better tabulate absenteeism. Of the 450 employers - representing over 800,000 full-time employees - that completed the EBN-JHA 2005 Absence Management Survey, only 12% indicated they actually track the cost of absenteeism. Other findings of the EBN-JHA survey include:

• Disability claims cause 55% of employee absences, and FMLA causes another 25%.
• The companies that did track absenteeism costs graded their efforts as poor or fair, indicating room for improvement.
• The percentage of larger companies of 500 employees or more (43%) reported they are uncertain of their average number of unscheduled absences per employee, compared to only 27% of companies that employ two to 99 workers.
• An employer pays, on average, $260 each day someone misses work.

Like UnumProvident, Boston-based Liberty Mutual also employs a single approach to managing FMLA and disability programs through its new internal reporting and data-tracking system, Liberty SystemOne.nxt, which the company launched in June.

"Joining our two previously separate systems - one for disability and another for FMLA - into a single tool gives employers greater control over these programs," comments Wayne Evans, manager of centralized claim and leave operations for Liberty Mutual's group market business unit. "And while our earlier approach was effective, nothing beats running both programs through the same system."

Absence of absence tracking

Another study completed in April by the Integrated Benefits Institute indicates employers are indeed doing away with isolated benefits and are moving toward new approaches to managing health, absence and disability. In its survey of 624 employers, IBI found that only 21% continue to administer their health- and absence-related benefits programs in complete isolation of one another. However, only one in five employers indicated they include traditional sick leave/incidental absence in an integrated program, most likely because such absences are seldom tracked and managed, IBI concludes.

Employers that do integrate leave programs with disability were much more likely to locate and target "other" absences beyond those filed in disability claims. For example, IBI states, of the programs that integrate workers' comp with STD/LTD, 79% included other absences. And for programs that integrate workers' comp with group health and STD/LTD, 73% included other absences.

"Tracking health-related incidental absence is a challenge because in many companies it is seen simply as a "benefit" due the employee and buried somewhere in payroll - if it is tracked at all," says IBI President Thomas Parry. "Our [previous] research on the full costs of absence, lost productivity and health for 88 companies with 3.3 million covered lives shows that traditional sick leave is a primary driver of health-related lost productivity. This finding emphasizes the importance of prevention and wellness, alongside disability and disease management, in controlling the real costs of workforce ill health."

Charting the demographics

The UnumProvident study warns that many family-related leaves of absence are likely to lead to short-term disability for the employee, as they often become burnt out from the process of taking care of a family member for a long period of time. These employees could cite depression among the reasons for taking short-term disability, so it's important that companies stay on top of their workers' well-being and connect them with employer and community resources that could protect an employee's health and help improve overall workplace productivity, according to the insurer. The research determined that 17% of all FMLA leaves were family related, and that 9% of these cases were followed within six months by either an STD or workers' compensation claim. "Often a person is stressed or fatigued after taking care of a family member," says Davis. "This is related to caregiver stress, and must be closely monitored."

UnumProvident also found a link between claim type and demographics. Older workers and women, for example, are more likely to have family-related leave lead to STD, results indicated. In addition, higher salaries and longer STD elimination periods decreased the chance of family leave progressing to disability leave. The insurer believes that developing links between employee assistance programs, work-life balance services and family-related FMLA leave will help companies reduce incidences of absenteeism.

UnumProvident also recommends using disease management programs to effectively track LTD claims that result from cancer and other diseases that often create financial stress on a company's budget

Research and trends in the industry suggest combining FMLA with disability will allow employers to better navigate the complex state and federal rules that oversee the system. Liberty Mutual says its new system, SystemOne.nxt, makes this process easier by allowing employees to file for FMLA time and check the status of their application through two separate Web sites, MyLibertyClaim.com and MyLibertyClaimStatus.com.

"Many employers don't have very good information on FMLA and how much time they're losing with the program," says Evans. "Building a claims system that manages both disability and FMLA helps employers better manage these costs and simplify how employees file claims. It's all about control and convenience." - C.S.