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Employee Benefits
Monday, December 1, 2008
Sick of paying out

The different components of employee benefits have traditionally operated independently. However, in today’s competitive corporate environment, some organisations are beginning to take a more holistic approach to managing employee benefits; combining aspects such as medical scheme, absenteeism and group risk insurance information in an attempt to ensure improved productivity, manage costs related to employee downtime, and to optimise return on human capital.
Comments  Dr John Schoonbee, Medical Officer at RGA Reinsurance, “This is best achieved through an integrated approach to risk management, facilitating the effective coordination of data and services from all employee benefit components.”
In any company, he says potential disability claimants move through a health continuum where they start off as healthy, and as their health deteriorates they take increasingly more sick days until they are eventually admitted as disability claims.
“The ideal, from an employer, employee and employee benefits-provider point of view, is to keep the employee healthy and productive for as long as possible. Not only does this save on the associated costs of medical and insurance claims, but the employer benefits from lower staff turnover rates and the employee’s quality of life is improved.”
He adds that businesses are therefore increasingly considering additional risk management measures, such as wellness initiatives and rigorous absentee management programs, to help reduce the health risks and associated costs to the business, thereby boosting workforce productivity and employee well-being.
Absentee management forms the backbone of the integrated approach, as it enables a proactive approach where potential disability claimants are identified early in the process. A program of actively managing such employees back to health is facilitated using tools such as disease management in order to ensure correct treatment. However, the effectiveness and ability to pre-empt such occurrences requires that all aspects of the integrated benefit model be managed centrally, using absentee management to underpin the entire process.
“To be most effective, this management task should be performed by a single coordinator,” says Schoonbee, “who is able to effectively integrate all of these services to pre-empt and prevent acute, treatable medical conditions from developing into chronic conditions.”
For example, an employee who is continually absent due to hypertension, but only receives a short-term treatment from a prescribed course of medication, will continue to suffer from this condition. This could possibly lead to a stroke, resulting in a prolonged absence from work, with related insurance claims or, in a worst-case scenario, disability or death resulting in the loss of that employee’s experience and skill set. In such a case, the employer would have to hire and train a new employee.
An additional benefit arises from a single coordinator offering the integrated package. A single information platform, combining data from the medical scheme, group risk provider and other participating providers, allows the insurer and medical scheme to assess risk better, which leads to more accurate pricing.
However, a key requirement for the successful implementation of an integrated risk strategy is that employers need to buy into the concept 100%. “They need to commit to working with their insurer, sick leave management specialist and other participating providers to ensure that all relevant information is received and submitted in a timely manner, thereby playing their part in successfully unlocking the potential savings that would otherwise be locked up in the provision of employee benefits.”

Copyright © Insurance Times and Investments® Vol:21.11 1st December, 2008
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