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Employee Benefits
Tuesday, February 1, 2005
Covering absenteeism in the workplace

The absenteeism rate for people living with HIV/AIDS is three times higher than for those who are not infected. This is according to a study conducted by AIC Insurance, a company specialising in the underwriting of the direct cost of absenteeism in the workplace, and managing workers during sick leave.
In the study claims data was extensively analysed, says Johnny Johnson, CEO of the company. “Normally data from the first day of illness is not recorded by insurance companies as their products traditionally do not provide a benefit from day one. A deferred period, the minimum length of sickness necessary to admit a claim, is not usually less than seven days.
However, the date on which this study was based measured sick leave from the first day of illness for the years 2001 to 2003.  “Based on 60 employer groups totalling 25 282 life years, the data is predominantly from companies active in the motor and textile manufacturing industries in the Eastern Cape. The information gathered was then used to calibrate the projection model and to determine the expected trend of the epidemic on future absenteeism and resultant sick leave claims.
“It must be stated that this study relates to those people with advanced HIV.” Further research to establish absenteeism trends relating to people living with HIV, as opposed to those who do not know their status, as well as the impact on absenteeism relating to HIV positive people on anti-retroviral therapy, is currently being conducted with an employer who is insured with AIC.
“According to the results, a total of 32 work days were taken per year for those with advanced HIV-diseases,” notes Mr Johnson. It was found that on average, people living with HIV/AIDS were absent 4,1 times a year and the average duration of each incidence was 7,8 days. This is nearly three times longer than absenteeism rates for people not HIV positive.
Real costs relating to absenteeism are often underestimated, he adds. The indirect costs often exceed the direct costs and can add as much as 200% to the total overheads. One solution has been to protect the bottom line through insurance cover.
Based on its research AIC Insurance has developed and tested a process that evaluates all the risks associated with absenteeism. “This has enabled the company to reduce the rate of absenteeism at no additional cost.”
The product, called the Corporate Absenteeism Protection Plan (CAPP), combines a risk assessment and management consulting process with an insurance product to provide the employer with an effective hedge against the direct cost of absenteeism.

Copyright © Insurance Times and Investments® Vol:18.1 1st February, 2005
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