Does the importance of early intervention and effective rehabilitation during absence supersede the financial benefits that Group Income Protection (GIP) provides?
There is a growing school of thought that this, and the support services insurers provide, are becoming more important than ever to corporate customers.
GIP offers benefits to both the policyholder’s organisation and its employees. It provides a level of salary continuation when an employee is absent because of ill health or disablement. The added benefit most aligned to an organisation’s financial protection is access to early intervention and rehabilitation services. By taking this approach, advisers are best placed to introduce GIP to new organisations and to make sure current customers retain their schemes. With 2.4m people covered in only 17,442 schemes, there is work to do!1
The cost of sickness absence is often high up the list of organisational concerns for an employer. Early involvement in absence to maximise rehabilitation support is sensible and prudent. Although GIP benefits become payable during long-term disability, the payment only starts after the employee has been unable to work for a set period, commonly 26 or 28 weeks. For the first 28 weeks, the employer funds Statutory Sick Pay, and many fund Occupational Sick Pay. Proactively managing sickness absence through early engagement using an Early Intervention Service (EIS) makes perfect sense from an organisational financial perspective.
Many employers do not have the resources or expertise to manage the absence effectively. The GIP provider is well placed to support the early investigation of absence, helping the employer and their employee at the crucial early stages of absence. This helps Equality Act (2010) compliance, enhances a disability diverse workforce and is simply the right thing for an employer to do. Leaving employees wallowing while waiting for a GIP claim also negatively affects premiums, as the longer an absence is, the harder it is to make an effective, sustainable return. Letting an employee go can cost up to £30,000 in recruitment and training costs2 and so the financial business case for employee retention clearly underpins a need for EIS. Modelling return on investment using EIS supports the introduction of new GIP schemes to the market.
What is EIS and how does an organisation use it?
The aim of EIS is to manage employee absence as early as possible and find the best outcome for all involved, which in most cases is a speedy return to work. Most insurers provide access to trained medical professionals, usually nurses, and some even give money back for early notification – different approaches are adopted and need to be assessed by advisers. Access can be via a simple telephone call, referral forms or GIP claims forms and building these into regular HR and manager practices encourages a consistent approach and outcome. Part of an assessment is how does an organisation want to initiate the process – a quick call or something more formal?
Support can provide unlimited access to medically qualified EIS Nurses or limited access and triage to a claim, and an assessment of service quality also covering whether provided in-house or outsourced, provides advisers with a further opportunity for consulting with the customer.
The EIS Nurse can work across the organisation with the employee, medical specialist and their employer to facilitate a successful return. Where possible, the aim should be to create an achievable return to work plan endorsed by the employee’s GP and any relevant specialists or consultants, and provide support for all parties throughout the process. This can be a lifeline for individuals struggling to cope and takes a (sometimes emotional) burden off the line manager while reducing sick pay costs.
The EIS service offered should be tailored to suit the needs of the employer and each absent employee is treated as an individual, so the support offered is right for their situation. Not only do EIS Nurses support return to work plans, they can also offer support and guidance to employers in terms of advice on absence duration, recommended workplace adaptations and other benefits the employee could utilise.
EIS variants and effectiveness
There are many varieties of EIS from insurers which range from day one, week four or week eight of any absence. Canada Life’s EIS focuses on the fact that every absence can have a huge impact on the workplace and recognises the importance of supporting employees as early as possible. Hence we use a day one intervention service, which for clinical/objective absences (such as heart attack, cancer and strokes) means we can signpost people to support such as Second Medical Opinion services. It is here that the immediate support service benefits can be accessed most beneficially.
Many clinical absences continue with proactive treatment and physician engagement. If the employee has not returned to the workplace then claim forms can be submitted six to eight weeks before the end of the deferred period when aligned with a quick decision-making process. However EIS can still be used for the right clinical claims. Cancer and heart attack specifically provide a person-centric case management and rehabilitation approach using trained nurses.
EIS is best used for complex/subjective claims where there is little pathology though (such as back pain, mental health, repetitive strain and chronic fatigue syndrome). This is an area where many line managers struggle as stress, anxiety and depression is not only “invisible” but people managers also often worry about exacerbating the condition if they try to manage it. Work-related stress is particularly emotive and, by using EIS, the aim is to help the manager and employee resolve the absence or confirm it is a workplace issue rather than a health issue, and hence not a GIP claim.
We believe that EIS works. While the industry paid 15,322 claims in 2017, this could have increased to at least 18,311 without EIS3. However, the 2,989 cases represent only 0.12% of all insured employees. For a day one absence service, or even eight week one, the message is not getting across to organisations. Advisers should be emphasising the quality of the service and outcomes, not least as around half of all cases are for mental health, a specific line manager challenge.
In 2017, having contributed around a quarter of the industry cases, 77% of early intervention referrals returned to work with an average absence duration of just seven weeks. This clearly demonstrates the value early intervention can bring to an organisation. Bearing in mind that 90% of EIS referrals did not result in a claim for various reasons, the financial benefits of sustainable, appropriate premiums is as attractive as the sick pay arguments4.
By actively helping the customer to evaluate and choose a quality GIP insurer, you can save an organisation money (reduced sick pay and recruitment costs), ensure GIP premiums represent their actual claims experience in an EIS environment, help them comply with the Equality Act (2010) and become a more disability diverse organisation, provide quality support and outsourced vocational rehabilitation.
Marketing Director, Canada Life Group
1Swiss Re Group Watch 2018
2Oxford Economics, reported in HR Review
3GRiD claim stats for 2017
4Canada Life EIS MI