Monday, February 21, 2011

Why Employers Need 3rd Party Adjudication of Disability

Look at the Doctor using privacy laws as a basis for fraud. One doctor even points out this is what he does every day. If you rely on a doctors note as the basis for establishing a legitimate sick day or short term disability claim here is a little window into the culture which is created. For more check this prior post and this brief excerpt from my blog in 2007.

The International Foundation of Employee Benefit Plans recently completed a survey of their membership on Salary Continuation and Short Term Disability (STD) which you can find for free here.
The survey revealed that salary continuation/STD is the black hole of employee benefit plans in terms of quantifying cost and controlling utilization.
Reasons cited for the difficulty of quantifying cost and controlling utilization and effecting changes are;
1.Union Contracts

2.Employee perception of value (Did anyone explain the probability of disability and the impact on employees of a sickness or injury which prevents work?).

3.State Mandates like CA Paid leave (Huh?)

4.FMLA Integration ( the machine is so well oiled and automated it cannot be improved?)

5.Management Buy-in (Did anyone explain the facts and costs?)

6.Entitlement (getting warmer!)

7.A lenient culture that does not enforce return to work (getting hotter!)

8.Most of the plans are payroll matters not ERISA plans (red hot, since employer cannot enforce plan terms and win an ADA challenge since payroll plans are not bonafide employee benefit plans

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