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U.S. Master™ Pension Guide, 2009 Edition
Revised for 2009 to include relevant provisions of the Heroes Earnings Assistance Relief Tax (HEART) Act and the Emergency Economic Stabilization Act.
From Spencer's Benefits Reports: More employers recognize that work force health has a measurable effect on business performance, according to recently released survey results from Mercer health and benefits business and related insurance broker Marsh. The Mercer/Marsh Survey on Health, Productivity, and Absence Management Programs 2007 was conducted earlier in the year with 611 for-profit and nonprofit employers ranging in size from 100 employees to more than 10,000 employees. Four-fifths of respondents agreed that “improving employee health is a core business value”—39% “strongly agreed” and another 41% “agreed.”
The Mercer/Marsh survey also found that for a significant minority of respondents, absences had risen from 2005 to 2006: for 23%, the incidence of short term disability claims rose, and 15% noted an increase in the average length of disability absence. Only 11% of respondents noted a decrease in STD incidence. Despite their efforts to manage absences more effectively, for two-thirds of respondents absence rates remained unchanged. Nearly two-fifths of respondents (38%) reported increased use of leave under the Family and Medical Leave Act (FMLA).
The most costly conditions, which are driving the use of disability benefits, were cancer and cardiovascular disease (each cited by 54% of respondents), followed closely by other musculoskeletal problems (53%) and low-back pain (42%). Of eight common disabling conditions, survey respondents reported seeing more and/or more costly claims for cancer (47%) and stress/depression (44%), other musculoskeletal (39%), cardiovascular (38%), and low back pain (28%) conditions.
“In the occupational health sphere where almost all medical conditions are related to the musculoskeletal system, it appears that employers are benefiting from investments made in health and safety, as well as in rigorous claim management,” observed William Craig of Marsh’s human capital practice. Eighty-eight percent of the respondents reported no change or a decrease in their incurred workers’ compensation losses this year, an improvement from the previous survey.
Mercer/Marsh estimates that improved employee health, as a percentage of the total cost of health care benefits and of absences, could equal nearly one-fourth of total payroll (16% for health care; 4% for direct costs of absence programs; and 3% for indirect costs, such as for replacement workers and lost productivity).
In response, more employers are integrating management of their health care and disability programs (17% of respondents). Among employers with 10,000 or more employees, 6% require employees on STD to participate in any relevant disease or health modification programs that they offer, and another 4% offer an incentive to do so. An additional 14% of these employers intend to implement one of these approaches within the next year, while 41% are considering implementing one.
The great majority of employers (79%) with formal return-to-work programs for workers’ compensation also apply those programs to their nonoccupational STD and long term disability programs.
To address the increase in absences related to stress, depression, and other behavioral health disorders, employers also are integrating their employee assistance programs (EAPs) with their disability and health management programs. Because employees on disability are often at risk for stress or depression, many respondents now routinely refer employees to their EAP, 49% of respondents for an occupational or nonoccupational medical disability and 44% for employees on FMLA leave.
Nearly all respondents cite controlling health care costs as the primary objective of their health management programs, but more than half (54%) also reported that improving overall employee productivity is an objective. “To reach that objective, employers are finding that they need to bring absence into the equation,” Mercer/Marsh concluded.
For more information, visit http://www.mercer.com or http://www.mmc.com.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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