What are the hidden costs of disability?
The annual costs associated with employee disabilities are estimated at over $200 billion. Surveys done by large insurers and the Washington Business Group on Health place the cost of employee disabilities at 6-10% of payroll. Although some of the cost allocated to disabilities can be identified as workers’ compensation, over half of the cost belongs under the heading of discretionary benefits. Sick pay, salary continuation, short-term Disability benefits–items that were previously considered insignificant or lumped into payroll costs–are becoming increasingly costly, and an increase of disability conditions due to aging of the working population and to new types of disabilities, means that companies must carefully examine the future of their disability programs. Companies are now beginning to consider outsourcing the management of these programs as a win for hard pressed human resource staffs and, very importantly, a win for the disabled employee who receives a high level of attenti
