Benefits March 13, 2007

Canadian Co.'s Not Tracking Disability Absences Could Cost Employers

March 13, 2007 (PLANSPONSOR.com) - The inability or failure of Canadian companies to collect data on the frequency, duration or cause of worker absences stemming from disabilities could be inflating company costs for employers with 1,000 or more employees to more than C$3 million per year, according to a Hewitt Associates survey.
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class=”ifrtext”> According to preliminary results from Hewitt's Disability Absence Index Survey, if employers have no idea what these absences are costing and take no steps to control them, making the case for disability management or wellness programs may be more difficult.

class=”ifrtext”> For those organizations who said they used the data they had on disability absences, 16% said they did not use the data for strategic purposes.

class=”ifrtext”> The survey divided the costs of disability absences into three categories: workers' compensation, short-term disability and long-term disability.

class=”ifrtext”> The costs for an organization with 1,000 or more employees in terms of workers' compensation totaled C$850,780. For an organization with 500 unionized employees and 500 non-unionized employees, the short-term disability costs totaled about C$2.2 million and for long-term disability, the costs about are about C$519,500.

class=”ifrtext”> Some of the reasons the survey cites for employers' not having sufficient data are:

  • Organizations do not seem to be accessing and/or centrally collecting disability data from their third party vendors (workers' compensation, insurance companies and/or third party disability vendors).
  • Disability management coordinators (union employees) and HR staff generalists (non-union employees) are most often responsible for the administration of long-term disability absences.
  • Privacy considerations and the inability of senior management to properly assess medical information prevents them for getting quality information.
  • Third party administrators, such as insurance companies, collect better data for long-term disability absences.

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