Five Things Risk Managers Need To Know About Employee Benefits

Five Things Risk Managers Need To Know About Employee Benefits

Learn how risk managers play a pivotal role in ensuring workers stay safe on the job, while keeping companies compliant and productive.
John Montone, Head of Claims for Group Benefits and Workers’ Compensation at The Hartford
John Montone, Head of Claims for Group Benefits and Workers’ Compensation at The Hartford
Allison Scaia
Allison Scaia, Head of Health Services at The Hartford
Whether a worker is injured on or off the job, lost time is lost time. Effective absence management means coordinating programs, policies and resources to best care for employees, which means helping them return to work as safely and swiftly as possible. Risk managers play a pivotal role in ensuring workers stay safe on the job, while keeping companies compliant and productive.
“Equally important, a risk manager grounded in employee benefits can help workers understand how everything fits together to best support the employee,” says John Montone, head of workers’ compensation and disability claims for The Hartford.
Traditionally, employee benefits and workers’ compensation have been handled separately. The HR staff handled the programs and benefits meant to attract and retain talent. Risk managers focused on mitigating risk in the workplace, employee safety and workers’ compensation compliance. However, there can be challenges with this separation.
And with today’s technology and talent, there’s an ability and growing desire for employers to manage both sides together. The integration streamlines administration and helps improve the employee experience overall. Employers can better track and monitor all absences and learn from the data.
“This gives employers a full understanding of all the drivers of absence in their operation,” Montone says, “It gives them insights into their benefits and where they might have opportunities to deliver more health and wellness programs.”
Employers planning to manage both employee benefits and workers’ compensation may want to consider these five topics:

1. Leave Laws and Accommodations

Leave laws can be confusing, and the overall landscape of them is growing increasingly complex. Understanding the compliance risk means knowing how all statutory federal, state and local leave laws must be coordinated. And not correctly tracking leaves can fail to protect both the employer and injured worker. With the federal Family and Medical Leave Act (FMLA), an employee out on workers’ compensation is entitled to job-protected leave, but that doesn’t always happen.
In fact, a study by The Hartford found that 71% of workers’ compensation claims with three or more days of approved absences were not coordinated with FMLA. Not initiating FMLA for Workers’ Compensation claims puts employers at risk of future lawsuits and fines.1
“That’s one of the pitfalls of silos,” says Allison Scaia, head of strategy for Health Services at The Hartford. “Risk managers are focused solely on workers’ compensation. Benefit teams are focused on FMLA. So, when employees are unclear when FMLA applies, the lack of coordination can be costly.” 
When leaves are integrated, a job-protected leave like FMLA and, depending on the state, Paid Family and Medical Leave (PFML), can be automatically triggered for the injured employee.
“This ensures that employers are in regulatory sync at all times,” Montone says.
Additionally, risk managers should have working knowledge of the Americans with Disabilities Act (ADA). It applies to all employers – public or private – with 15 or more workers. To identify reasonable accommodations for workers – whether they are out on workers’ compensation or disability – employers must collaborate with employees as part of the law’s interactive process. Reasonable accommodations can and should dovetail with return-to-work and workers’ compensation restrictions. Employers risk fines from the Equal Employment Opportunity Commission (EEOC) if they fail to consider the ADA.

2. Short-term Disability or Workers’ Compensation?

Risk managers should know if the company offers income protection benefits, like short-term disability for non-work-related injuries or illnesses. They can help employees understand what benefit is most appropriate for their situation if they’re on leave.
There can be times when a claim initially could bounce between short-term disability and workers’ compensation. For example, a typist/data entry worker who develops severe wrist pain files a short-term disability claim. But when a review of their essential duties finds that the injury may be work related, the claim lands with workers’ compensation. An integrated system, particularly when the coverages are with one carrier, will get the claim to the right place.

3. Supplemental Health Benefits: Cash When Employees Need It

Workers’ compensation generally pays an employee a portion of their income, not all of it. Supplemental health benefits, like accident and critical illness insurance and overnight hospital stay plans, can help an employee close that financial gap. That’s because these benefits pay cash directly to the employee to use where it’s needed most, for things like childcare, lodging, food delivery or even dog-walking.
For example, an employee out on a workers’ compensation claim also has an accidental injury insurance benefit as part of their overall benefits package. So, that will pay a cash benefit they can use on whatever they want while recovering. If supplemental benefits and workers’ compensation are with the same carrier, there may be an opportunity for claims integration activity to enable more efficient claim filing and processing.

4. Business Travel Insurance

Employers feel a “duty of care” obligation to safeguard employees no matter where they travel on company business. An organization that has some form of business travel – whether around the world or across town – can be covered under a business travel accident (BTA) policy.
Employees face a multitude of risks as they travel for business, including for accident, illness and threats to their safety. A BTA program can provide 24/7 access to medical and travel assistance. It also will help fill in gray areas on coverages, such as workers’ compensation, by covering employees during non-work activities on business trips. A key benefit is out-of-country emergency medical expenses. A BTA policy would pay on a primary basis, regardless of any other insurance in place.
Overall, BTA programs are designed to respond in an emergency, with a focus on keeping employees safe no matter where they travel for their job.

5. Employee Assistance Programs (EAPs) for Overall Wellness Support

A company committed to holistically caring for its workers needs a risk manager to be familiar with programs that support both physical and mental well-being. The need has never been greater. The Hartford research found that 71% of employers feel the deteriorating mental health of their workforce is having a negative financial impact on their company.2
They have valid concerns: 34% of workers report feeling depressed or anxious at least once a week in 2022, up from 20% in 2020.3
EAPs or similar programs can help employees handle day-to-day issues, reduce absences and increase productivity. If a situation doesn’t qualify for a disability or workers’ compensation claim, support is there during a difficult time.

Pulling It All Together

With this better understanding of employee benefits, risk managers should consider:
  • Communicating regularly with their HR colleagues
  • Routinely reviewing new WC claims with HR to ensure FMLA coordination
  • Working with their broker to identify benefits that provide more holistic coverage
  • Partnering with an absence management vendor to integrate all leaves
“When there is better awareness on how risk and HR work together, everyone benefits,” Scaia says. “There’s a more holistic approach to absence that helps employees know their well-being is a priority.”
1 Based on The Hartford’s review of Workers’ Compensation lost time claims and corresponding FMLA compliance from 2018-2020.
2-3 The Hartford’s 2022 Future of Benefits Study, Viewed February 2023
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