Employers Should Focus On Potential Impact Of ACA On Workforce Disability And Absence Management: DMEC

 

Employers should focus on the potential impact of the Patient Protection and Affordable Care Act (ACA) on workplace disability and absence management programs, according to a new study released jointly by the Disability Management Employer Coalition (DMEC) and Pacific Resources. The study found that, even though many organizations feel ready for ACA changes to health care and health insurance, most have not given much thought to its impact on disability and absence management despite agreement that these employee benefits programs can significantly impact a company’s bottom line.

“Disability and absence management are not separate issues from health and medical issues and they need to be considered in the context of health care reform,” said Pat Purdy, vice president at Core Benefits Solutions at Pacific Resources. “With 100 percent of disability claims and 60 percent to 70 percent of workplace absences linked to an employee’s own health, disability and absence management programs play a critical role in helping to manage an organization’s overall health care costs.”

Employers and insurance companies are important stakeholders in the implementation of the ACA with 64 percent of the U.S. population receiving private health insurance, and 59.5 percent receiving coverage through an employer. The DMEC/Pacific Resources study shows that 48 percent of employers and 72 percent of disability insurance carriers believe the financial impact of employee disability and absence will increase over the next five years, citing key cost drivers such as increased incidence of disability claims; increased duration of absence; increased use of Family Medical Leave Act (FMLA) benefits; and rising overall health care costs.

The survey found the following:

Incidence and duration of long-term absences expected to increase. When presented with alternative scenarios, employers and carriers are far more likely to believe that the incidence of long-term absences will increase. Further, more believe the duration of absences will increase as a result of increased waiting times for access to care than decrease as a result of more timely treatment of conditions. There is more uncertainty about how the ACA will impact the number of disability claims, although those who feel knowledgeable enough to predict what will happen are more likely to believe the number of claims will rise due to employees no longer fearing a loss of health care coverage from a long-term absence.

More believe it will be increasingly difficult to get access to routine care under ACA. Forty-two percent believe that the ability of employees to see a physician for routine care in a timely manner will get worse, while only 21 percent believe it will improve. A smaller, but still substantial proportion, believes access to urgent care will change, although views on whether this will get better or worse are split. Some changes are also expected in how employees will be able to use their benefits. According to the Congressional Budget Office (CBO), it is estimated that 27 million people will be added to the U.S. health care system as a result of health care reform. But, DMEC/Pacific Resources noted that what has not been discussed is the potential unintended impact this may have on workforce productivity, especially when combined with an existing shortage of doctors, particularly primary care physicians (PCPs). The Association of American Medical Colleges (AAMC) says the shortage of PCPs in the U.S. will rise to 90,000 by 2020 and 130,000 by 2025. Even without the ACA, the expected shortage of doctors would be at least 100,000 by 2025. Employers need to be aware of this issue and thinking about how it could potentially impact the delivery of health care to their employee population, including absence and disability related services.

ACA could impact program outsourcing. Companies currently use a variety of methods to handle their leave management administration, including complete insourcing, complete outsourcing and a mix of the two. While the majority of respondents do not envision changing their method of leave management administration over the next few years, there was some concern that FMLA activity will increase as a result of ACA and that more employers will look to outsource leave management as a result of ACA. There is a belief that with the new health care legislation, employee awareness of benefits legislation will continue to grow, including a greater awareness of ability to take job protected leave. If the anticipated increase in incidence and duration of disability occurs and employees become more aware of leave laws, it makes sense that more employers will be rethinking their leave management programs as well as their overall talent management strategy.

Wellness initiatives are widespread and growing. DMEC employer organizations currently have a wide variety of programs to help manage employee benefits and absence. Wellness initiatives are the most common. Many employers are expanding internal programs aimed at reducing absence and promoting employee wellbeing, but few credit ACA as motivating these decisions—perhaps because many of their wellness initiatives were underway prior to ACA, which does include financial incentives for wellness programs.

For more information, visit http://www.dmec.org.

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