Why Disability Insurance Matters

Person with broken arm typing on laptop.This article originally appeared in Human Resource Executive. 

Throughout my career, I have usually been the interviewer, but occasionally I’ve also been the interviewee. Whichever side of the table I have sat on over the past three decades, my least favorite question is always: What keeps you up at night?

I spent the early part of my career in healthcare, first working with Olympic and elite athletes, obese children, pregnant and post-natal women and the apparently well general community; and then running industrial medicine programs. The only thing that keeps me up at night from either a work or personal standpoint is if someone is hurt, suffering or dead on my watch. That’s the gift working in healthcare gives you—lifelong perspective.

So, for me, the sleepless night query is a lazy question. It’s generally code for something along the lines of: “What big problem are you working on?” or “What do you believe is the most challenging issue for employers today?”

Neither of those questions, however, stimulates me to give the interesting answer the person is seeking. But this one does: What distracts you during the day?

When I am trying to solve a problem for which there is no easy solution, almost everything I read or hear causes me to consider how that information might relate to my problem.

Whether working in healthcare, for an insurance company, consulting with employers or running a nonprofit, the basic and vexing problem I’m trying to solve is behavior change and how, ultimately, human beings evaluate and respond to risk.

Here’s what I’ve learned. Essentially, we’re baked and done at approximately 18 years of age. Around that time, your body executes an efficiency review. Any neural pathways your brain hasn’t used are trimmed away. (Note: We have also learned, however, that if you need a pathway back after something traumatic such as a stroke happens, it can regrow with dedicated rehabilitation.)

What is the impact of this spring cleaning of the brain? The person you were as an 18-year-old is, in some ways, your setpoint. If you exercised, ate seven to 10 fruits and vegetables a day, were the right weight for your height, didn’t smoke, didn’t drink more than one alcoholic beverage a day, always wore a seatbelt, saved money for a rainy day, did the healthcare and dental visits recommended for someone your age, etc., you’re set up for a reasonably good physical and fiscal life. Even if you stray from these behaviors due to changing life circumstances, it is easier to get back to these habits because the neural framework is there to support you.

But if your 18-year-old self had some room for improvement, you can undergo changes as you become older and wiser. It will be simply more difficult for you to execute, since you will be working against your neural wiring.

So what does this background have to do with employee benefits?

The longer I work in and around employee benefits, the more I’ve come to appreciate that there are enormous advantages to health- and financial-benefit programs that either a nation or an employer selected and paid for.

Unfortunately, most adults evaluate hazards differently than risk-considering people like me, HR executives or actuaries.

When Texas cattle producers sued Oprah Winfrey for creating “a lynch-mob mentality” among viewers during a 1998 episode on beef safety at the time of the mad-cow-disease scare, a risk-communications consultant named Peter Sandman described a formula for how people evaluate risk: Risk = Hazard + Outrage. Sandman wrote (bracketed words are mine):

“To the experts, risk means expected annual mortality [or financial ruin]. But to the public (and even the experts when they go home at night), risk means much more than that. Let’s redefine terms. Call the death rate (what [many] experts mean by risk) “hazard.” Call all the other factors, collectively, “outrage.” Risk, then, is the sum of hazard and outrage. The public pays too little attention to hazard; the experts pay absolutely no attention to outrage. Not surprisingly, they rank risks differently.”

During and following World War II, when most developed nations chose to provide its residents with healthcare and financial benefits, they unconsciously acknowledged our frailty as humans in evaluating risk.

On Jan. 11, 1944, President Franklin Delano Roosevelt attempted to persuade Congress and the nation of the value of a “second bill of rights” (also known as an economic bill of rights) during his State of the Union address. Included on the list were the right to adequate medical care—and the opportunity to achieve and enjoy good health—and the right to adequate protection from the economic fears of old age, sickness, accident and unemployment. Several of FDR’s rights were addressed in programs such as Social Security. But employers continued to bear some of the onus they picked up during World War II by not abandoning employee benefits such as healthcare coverage.

As employee-benefits costs—led by healthcare expenses and poor pension investments—began to incur precipitous financial consequences for businesses during the 20th century, employers began the shift to cost-sharing with employees. (It’s a trend that continues today.) The advent of this change, coupled with the rise of cafeteria plans, put workers in the risk-assessment driver’s seat. They often made selections that make me shudder.

The latest information that has me losing some proverbial sleep at night is this: An analysis of economic research by a New York Times reporter that showed a trip to the hospital can mean a permanent reduction in income for a substantial fraction of Americans. Some people bounce right back, but many never work as much again.

To read the rest of this post, please click here.




How Should HR Leaders Approach Mental Health in the Workplace?

Man looking to side.This article originally appeared in Human Resource Executive in the summer of 2017 — we’re reposting it as May is both Disability Insurance Awareness Month and Mental Health Awareness Month. 

This column is not the one I planned for you to read today. A computer-system update gone wrong drove me to write a new post on a different topic (since my electronic notes perished as well). But I’d like to believe I would have asked my editors to allow me to switch topics at the last minute even if this didn’t happen.

Why? Because on 20 July 2017, Chester Bennington, the ferociously-talented lead singer for the rock band Linkin Park, committed suicide. The act was made more poignant since it’s thought Bennington mimicked the recent death of his close friend (singer Chris Cornell) on what would have been Cornell’s 53rd birthday.

Bennington wasn’t alone in his desperation. According to the American Foundation for Suicide Prevention, approximately 121 people in the United States died by the same method that day – and 3,025 people attempted suicide.

Depression — the usual precursor to suicide — is the leading cause of disability worldwide and a major contributor to the overall global burden of disease. In the U.S., depression is a top-five cause of both short- and long-term disability absences. (Musculoskeletal claims are the leading cause of long-term disability.)

In an interesting comparison, Ian Bridgman of The Claim Lab indicates that in Canada (where long-term disability policies do not carry a 24-month-mental-health limitation) mental health diagnoses are the number one cause of employee absences lasting more than three months.

How should HR respond to mental health issues?

Given all this information, I find myself reflecting upon whether I’ve done enough to reach people who struggle with depression or anxiety disorders – or, as importantly – HR leaders who can make a difference every day in employees’ lives.

While I share a great deal of information about mental health via social media channels, I realized the last time I covered the topic here was in 2011. That column was in response to the Screen Actors Guild abandoning mental-health benefits for its members.

I doubt I’ve saved or comforted a single soul by posting the phone number for the suicide-prevention hotline on my Facebook wall or in my Twitter or LinkedIn feed, and something similar can be said about companies that simply offer an employee-assistance program and consider the topic addressed.

So, what’s an HR executive supposed to do about the workplace and mental health?

Normalize the conversation

We can look for guidance from people like Ben Congleton, CEO of Olark Live Chat, whose support of employee, Madalyn Parker (who took two days off from work to focus on her mental health) went viral.

Congleton seemed astonished by the response, and used his momentary fame to articulate the opportunities offered to employers on how to “normalize mental health” as a general health issue.

  • Build a safe space for employees where they can feel vulnerable and are willing to share any issues, whether they are related to mental health or not.
  • Reflect on how your company’s values support this safe space for your employees – one in six of whom is taking a psychiatric drug for a mental health issue.
  • Provide paid leave for mental and physical health issues – whether it’s in the form of traditional sick leave, salary continuation, paid time off, or short-term disability.
  • Take time to express gratitude to your employees.

Parker presents two additional considerations that are helpful from an employee perspective:

  • Offer flexible work arrangements.
  • Educate staff through training programs like Mental Health First Aid at Work to increase understanding and supportive behaviors about mental health in the workplace.

HR offers a first-line of assistance to employees

I’ll end with a few thoughts of my own:

  • Consider providing a more generous bereavement policy for employees who lose a loved one for any reason. Two or three days of paid leave is barely enough time for a worker to bury a loved one, never mind recover from the experience.
  • Keep in mind that your employees are also impacted when their dependent or loved one is suffering from mental health issues. Contemplate ways to assist employees, especially if a dependent dies by suicide.
  • If your company offers an EAP, stay updated on the utilization rate. I led a research project on the impact of employee assistance programs on absence and return-to-work rates. We found the only time EAP made a statistically-significant difference on the length of an employee absence was when the overall company utilization rate was over 10 percent.

Mental-health issues are pervasive throughout the U.S. and global populations. Employers, and HR leaders, are a first-line of assistance to the nearly 150 million working Americans.




Genetic Testing at Work

DNA strandsDo the rewards of genetic testing of employees outweigh the possible risks it presents to their financial stability?

This article by Carol Harnett, president of The Council for Disability Awareness, was recently published in Human Resource Executive.

I became intrigued with genetics in sixth grade. I still recall being fascinated when Mrs. D’Amato described Gregor Mendel’s work with pea plants that allowed him to unravel the fundamental laws of inheritance. Her introduction of the Punnett square, with its dominant and recessive alleles, and monohybrid and dihybrid crosses had me running home to decipher the keys to my ancestry with my parents.

Over time, I discovered that the MC1R gene was responsible for my red hair and freckles, and those traits, in combination with my blue eyes, placed me in the rarest of the ginger categories: a tribe that makes up less than 2 percent of the world’s population.

Genetics continued to grab my interest over the years, but that curiosity started to package itself with concern as more became known about human DNA. The first big pause I took to contemplate the impact of genetic information came when 23andme—one of the first direct-to-consumer genetic-testing companies—invited me to participate in a beta test.

It was 2008 and I was about to attend my first TED conference. The company invited the 1,000 participants to learn about their genetic profiles. I let the 23andme package sit on my desk for about a week. My internal debate revolved around whether I wanted to know if I had a genetic susceptibility for which there was currently no treatment. I finally caved in to my scientific interest, spit in the tube, sealed the envelope and overnighted my DNA to the company.

The results were anti-climactic. It turns out I have a remarkably solid set of inherited “wellness” characteristics. Or, at least I think I do.

The other traits the initial report listed (and still lists over the 10 years of updates) were laughingly off, including that I most likely don’t have freckles or red hair. And this gives me some pause as to whether my reported wellness variables are, indeed, correct.

I began to consider writing a column about genetic testing when someone passed me a copy of a survey of 14 disability carriers regarding whether they would pay the claims of women who underwent procedures associated with testing positive for inherited mutations of the BRCA1 or BRCA2 genes. (Approximately 72 percent of women who inherit a BRCA1 mutation and about 69 percent of women who inherit a BRCA2 mutation will develop breast cancer by the age of 80, while about 44 percent of women who inherit a BRCA1 mutation and approximately 17 percent of women who inherit a BRCA2 mutation will develop ovarian cancer by the age of 80.) Experts often recommend that women who carry these mutations consider both preventive bilateral mastectomies and removal of their ovaries and fallopian tubes by their mid-30s to early 40s.

There was wide disparity in the carriers’ responses to how they would process claims. Some considered bilateral mastectomies associated with a positive genetic test to be related to a pre-existing condition and, therefore, not payable. Others believed that preventive mastectomies related to a mutation of BRCA12 were elective procedures. As a result, the disability claim was not compensable under the elective-procedure provision. Still others would deny disability associated with subsequent breast-reconstruction surgeries under the elective-surgery and/or cosmetic-surgery provisions.

The range of answers and the logic applied by some providers regarding BRCA12 mutation carriers were shocking to me. But, there was a moment of hope when I reviewed a similar question asked about disability claims related to organ donation.

When I first joined the disability-insurance industry in the late 1990s, an organ donor’s disability claim was denied under the elective-procedure provision. Almost 20 years later, all but one carrier stated they would approve an organ donor’s claim—and the one carrier that wouldn’t pay the claim indicated it often made an administrative decision to approve the claim despite the contract.

As genetic testing becomes more common, I believe the carriers will rethink their positions (at least as it relates to women who learn they have genetic mutations after they enroll in disability coverage), or employers self-insured for short- and long-term disability will instruct the carriers or third-party administrators to pay these disability claims.

But here’s the catch that is up for debate: If people find out they carry a genetic mutation before they sign up for life, disability or long-term-care insurance, are they subject to denial of coverage due to a pre-existing condition, even though the genetic mutation may never “express itself?” The answer may be a qualified yes, depending upon the carrier and/or the state in which the person lives.

The Genetic Information and Nondiscrimination Act of 2008 prohibits employers and health-insurance companies from discriminating against people due to genetic information. However, when the act was passed, life, disability and long-term-care insurance were consciously omitted. This omission allows life and disability insurers to legally discriminate against people with genetic conditions or risk factors that predispose them to diseases—which brings me back to direct-to-consumer genetic testing.

There is a new trend among D2C companies such as Color Genomics, which wants employers and HR leaders to offer genetic testing to employees as an employee benefit. And while I, like many with my background, see the power of genetics as it relates to precision (or personalized) medicine, I’m incredibly concerned about how employers could inadvertently destabilize their employees’ financial wellness.

If employees do not currently carry individual life, disability or long-term-care insurance prior to participating in genetic testing, and they find out they possess a genetic abnormality, they may never be able to enroll in this coverage in the future. Even if you provide employer-paid life and disability coverage to your workers, if they leave your employment, they may not take their life insurance with them—and their disability coverage is not portable…

To read the rest of this post, please click here. 




Caring for Employee Financial Health

Caring for Employee Financial Health

The Council for Disability Awareness is happy to announce the expansion of our blog to include topics of importance to employers.

Our goal is to create a discussion with human resource and business leaders. A discussion that covers all things related to the workplace and employee benefits.

One topic we will highlight more frequently is employers’ expanding focus on employee financial health and wellness.

The last several decades have changed the way employers think about and support employee financial health, but at what costs?

Employer-Paid Health Insurance: Back in the Day

Most of us have no recollection of the era when employers provided robust benefits for their workers, including pensions and employer-paid health insurance premiums. When the U.S. entered the 1980s and health insurance expenses exploded, benefits experts stepped back and realized employees were immune to the true cost of health care.

Employee Financial Health: Giving Them Skin in the Game

Five-dollar-physician visits skewed the reality of what doctors and hospitals charged insurance companies. Thus was born the concept of making employees have “skin in the game”. The belief was if consumers had to contribute more toward the actual costs, they would think carefully about overusing their health insurance benefits.

This philosophy of employee responsibility and cost-sharing drifted outward toward all employee benefits over time.

The capital-market crises in 2002 and 2008, new legislation and regulatory requirements for employer-provided pensions, plus a need in some industries to reduce benefits to compete in the global market placed the tradition of providing new employees with a traditional defined-benefit plan on the chopping block.

As a result, employee financial health suffered.

What Created the Drive for Employee Financial Health and Wellness Education?

Defined-contribution plans such as 401(k)s and 403(b)s are now the standard way employers provide workers with retirement planning.

Except the worry – and perhaps the guilt – employers have is that, despite contributions to DC plans, only 61 percent of employees say they are saving for retirement.

We see further proof of poor retirement planning by workers in a May 2017 Gallup survey. The results indicated 25 percent of millennials will rely on Social Security benefits as a major source of income during retirement. This is almost double the number who said this in 2007.

The near elimination of defined-benefit pension plans for new employees coupled with far less than 100 percent participation in DC plans created the current drive by employers for employee financial health and wellness education.

Employee Financial Preparedness

While I am a staunch advocate of making certain working adults plan for their futures, I worry about their present situation as well. Why? Far fewer consumers are financially prepared for interruptions to their incomes due to periods of disability – the most common of which are pregnancy and musculoskeletal-related absences – than they are for retirement.

The best way employees can financially prepare for periods of absence – usually temporary – is through short- and long-term disability insurance.

According to the Bureau of Labor Statistics, 40 percent of private-sector companies provided access to a STD plan and 39 percent of workers participated. And 33 percent of employers gave access to a LTD plan with 32 percent of employees participating.

So, if you offer a disability insurance plan, 97 percent of employees will participate. But, at least 60 percent of workers don’t have the option to receive this type of coverage through the workplace. This increases the risk for compromised employee financial health and wellbeing.

Are Employees Prepared?

The Federal Reserve released its Report on the Economic Well-Being of U.S. Households in 2016 in May 2017 and reported 44 percent of adults said they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money. The median time an employee is out of work due to an illness, accident or injury is six weeks.

Given the Federal Reserve data, almost half of workers couldn’t afford an unpaid absence lasting more than a week without exhausting their sick leave or paid-time off. That’s if it is even available to them.

Employee Financial Health: Stories, Not (Just) Data

But all I’ve talked with you about so far is data. And while facts are important, stories are more memorable.

A few weeks ago, a friend asked me to attend a fundraising event for Kathie (name changed). She had to stop working due to symptoms associated with a rare autoimmune disease known as Wegener’s granulomatosis. This is a difficult condition to diagnose and it took months before the physicians figured out what was wrong. The good news is that while the medical team cannot cure Kathie, she has a reasonable chance of recovery and being able to work again. The bad news is it will take months of treatment to get her there.

I didn’t know anyone at the event other than my friend. So, I found myself speaking with a lot of different people and spent time hearing stories about Kathie.

I eventually came upon the organizer of the party who turned out to be Kathie’s boss. His compassion for Kathie’s situation touched me and I told him how remarkable I thought he was. At that point, he shared the guilt he felt.

He was a small employer and he couldn’t afford to provide much in the way of benefits. His employees received their health coverage through the public exchange, or their spouse’s insurance. It was too expensive a benefit for him to offer. But, he’d met with an agent about a year ago and asked if there was something he could for his employees. The agent presented two options: term life and disability insurance. He chose the term life plan.

The employer and most of his employees were in good physical health. In fact, Kathie completed a Tough Mudder competition (which involves running through 10 miles of mud and climbing over 20 obstacles) the month before her symptoms began. He thought none of them would ever need the disability insurance policy.

The Bigger Picture

It’s my belief that we need to expand how we think about employee financial health and wellbeing. Yes, we must help people plan for the future, but not at the risk of the present.