This post was originally written and posted by Kelly Pareti for SHRM, the Society for Human Resource Management. Apex Strategies does not own the rights to this content. All content rights are owned By Kelly Pareti for SHRM. Original article link:
accident and disability benefits



For most employers in the United States today, mitigating workers compensation claims is a key component of a company’s overall cost management strategy. Rightly so – the actual costs of a single workers compensation claim can be staggering. In addition to the medical costs, wage replacement, and indirect costs associated with a claim, there is also the negative impact that a claim can have on a company’s experience modification (or E-mod) which can significantly increase workers compensation insurance rates for the next three years.

To control the frequency of claims, many companies turn their attention to injury and illness prevention programs and safety training. While certainly important in their own right, especially in high-risk industries, these risk reduction measures and protocols often miss the mark in terms of addressing some common triggers of workers compensation utilization. While high-risk occupations and skilled labor companies do tend to experience higher levels of utilization, other factors that may contribute to claim incidences across all industries include high levels of turnover, probation periods for benefits, an aging workforce, and increased cost shifting to employees for benefits (an increasingly common trend as businesses try to manage their ever-increasing health insurance premiums).

One strategy that has emerged as an effective and proactive approach to controlling workers compensation claims is offering accident and disability benefits to employees. A study by Aflac found that 42% of all companies providing access to voluntary accident and disability insurance experienced declines in their workers compensation claims1 – thus helping to maintain or even lower their E-mod rating. Both plans can be designed to provide benefits that are paid directly to employees — only for non-occupational injuries and illnesses — consequently helping to eliminate “Monday morning claims.”

Offering voluntary benefits such as accident and disability insurance at the workplace has also been linked to increased employee attraction, retention, and loyalty, which can help alleviate high turnover rates – another common trigger.

On a voluntary basis, there is no direct cost to employers for offering these benefits, making it an attractive option for those looking to control costs while enhancing their benefits offering at the same time. The key to any successful voluntary program is having a strong communication and education campaign to ensure employees understand, value, and utilize the benefits. In light of the cost savings on their workers compensation rates and given the affordable nature of these benefits, an increasing number of employers are also opting to include these benefits as a part of their employer-paid total benefits package.

Offering accident and disability benefits to employees is a proactive approach to effectively mitigate workers compensation claims by addressing some of the common triggers for utilization. These benefits provide employees with the financial protection that they need in the time of an injury or illness.

1 Naumann, Michael (2015, Oct 30). Voluntary A&D Insurance May Reduce Workers’ Compensation Claims. Property Casualty 360.

© 2018 Leavitt Group. The coverages discussed herein are for illustrative purposes only. The terms and conditions of your specific policy may differ from those described. Please consult the provisions of your policy for the terms, conditions, and exclusions that apply to your coverage.