Today, more than ever, CFOs are shouldering the responsibility for managing both financial and human capital risks within their organization. The approach tends to be fractured with medical plan, wellness, disability and medical leave administered by Human Resources while workers' compensation is overseen by Risk Management. To make matters worse, the insurance brokers and consultants that the CFO relies on for strategic advice operate in similar silos within their own firms and are unable to offer an integrated solution.
Not so with HUB International.
By creating a strong partnership between our own Employee Benefits and Property Casualty divisions, we've developed a turnkey solution that enables our clients to bring Human Resources and Risk Management together. We help clients implement integrated solutions that allow the two worlds to intersect seamlessly, thus simplifying administration and creating more effective ways to manage cost.
The advantage we offer over our competitors is our ability to harness our expertise in Property/Casualty and Employee Benefits thus creating a 360-degree view of the solution, known as Total Absence Management (TAM). Working with select insurance companies, we enable clients to recognize a greater return on investment (ROI) for wellness when workers' compensation and disability programs are integrated or coordinated.
Changing the Game in Our Clients' Favor
Simply stated, when workers' compensation (WC) and disability (DI) programs are aligned, and we embed an effective program of targeted wellness intervention and clinical management, the results can be very powerful. At a basic level, we work with carriers who provide discounts on integrated DI and WC programs and even greater savings, or dividend potential, when a wellness program - with targeted interventions - is embedded in the medical plan.
But there's more. It's not just about the savings in an integrated approach, but the ability to take control over absence and improve productivity. And it's effectuated by having that same carrier manage the leave process whether it's a DI or WC claim with a focus on improving the overall management of Family Medical Leave.
We've built a powerful set of tools that lead both to a short-term improvement in cost together with a longer term, measurable ROI. Employers who drive a culture of health improvement will see fewer medical claims as well as lower DI and WC costs. Studies show that leave durations can be reduced by as much as 12 days. (Source: The Hartford)
For our clients that have or are thinking about implementing an effective wellness program, we point to significant advantages:
When absenteeism and presenteeism are addressed through a Total Absence Management (TAM) program and when employees become accountable for health and wellness, productivity increases and the organization achieves a higher level of performance and healthier bottom line.
- Not only are wellness programs credited with providing an average of a 30% reduction in workers compensation and disability claims costs, healthy employees have fewer injuries and recovery time is quicker when injured employees are otherwise healthy.
- In a recent study, 82% of risk managers "strongly agreed" that wellness should be part of their company's risk management program (Source: Kapnick Insurance Group Quarterly) even though the cost is typically paid for through the employee benefits budget. Given this perspective, it may be appropriate to share the administrative costs of a wellness program between risk management and benefits budgets. Sharing cost allocations can enable the benefits manager to meet annual budget objectives without impacting health coverage.
- Similarly, employee benefits costs may decline where occupational modifications or ergonomic process improvements have been made, with notable examples being musculoskeletal disease (lower back) or workplace stress.
In future newsletters we'll highlight additional advantages of this approach, but in the interim it's critical to keep in mind the simplicity borne from managing multiple leave types under a single integrated program. Centralized administration creates efficiencies by reducing duplicative processes and mitigating multiple leave inputs. Compliance is focused and codified with a single resource for managing multiple leave types; and consolidated reporting and analytics drive a more effective management process. Engaging and incentivizing employees to improve their health and getting to a more accurate ROI measurement completes the picture.
With so many advantages available, be sure to talk with your HUB benefits consultant about the value of total absence management to your organization.