How to Manage Short Term & Long Term Disability Claims
Many short-term disability (STD) plans are self-insured and therefore are little more than top-ups for sick leave policies. As a result, employers often attempt to manage these claims themselves. The validity of a claim is based upon a doctor’s note provided to the employee by his or her physician.
These notes are often vague and tend to fuel suspicion on the part of the employer that the claim is invalid.
However, an employer who seeks discipline based on suspicion could face a human rights claim or prevent an employee who is actually disabled from receiving benefits.
Neither outcome is appropriate nor do they address the fundamental need to balance the needs of the employee and the interests of the employer.
Independent experts verify claims and ensure healthy outcomes
As a general rule short-term and long-term disability (STD and LTD) claims range from 2% to 8% of payroll – a significant cost to employers. How you choose to manage STD claims can have a serious impact on LTD costs. It can also have an effect on an employee’s ability to successfully integrate back into the workplace.
An STD claim should result in a seamless reintegration into the workplace or the receipt of LTD benefits. Failing to properly address the claim can create both legal and employee relations problems.
Proper claim management is not as difficult as it would seem. Using an outside expert is a practical, professional and cost-effective solution. A third-party approach is the best way to assess the validity of the claim and ensure that STD claims are managed both effectively and appropriately.
In order to implement this approach, plan sponsors must inform employees that disability benefits will be made available on the condition that they consent to a third-party review of their claim by an expert chosen by the employer. In light of current privacy legislation it is recommended that any claims application contains an express consent to this effect.
Employees can benefit from a third party approach because they have the potential to receive benefits and a successful outcome to their leave in the form of a structured reintegration into the workplace or a more seamless transition to LTD benefits.
With this approach, employers receive assurance that claims are valid and they will be in a better position to assist employees in reintegration or in receiving appropriate benefits after the STD period ends. Plan sponsors will also avoid the most dangerous of legal traps – taking action on the basis of incomplete information.