Disability insurance trends [part one]: The effects of an aging workforce

In the last 10 years, the net worth of an average American employee has dropped significantly; from 2007 to 2010 alone, the median net worth of American families dropped nearly 40 percent.1

This decrease in net worth, due in part to the Great Recession, is impacting the workplace as baby boomer employees are postponing retirement to recoup lost savings. As employees work longer, the median age of the workforce will increase. This will affect employers in two ways:

  • Higher health care costs
  • Increased risk of an employee becoming ill or injured and requiring a disability leave

Managing the increased costs associated with an older workforce will be a focus for HR managers in the coming years. Here are a few tips for preventing and managing related disability costs.

  1. Choose a disability carrier that keeps employees productive. A robust return-to-work and stay-at-work program will be essential to keep baby boomers productive and manage increased health care costs. On-site consultants, provided by some disability and absence management programs, are available to identify individualized return-to-work and stay-at-work strategies that make sense for employers and their workforce.
  2. Implement a health management program. Because an older workforce likely will result in a larger number of health-related disability claims and productivity issues, it’ll be important to keep your employees healthy. Consider implementing an employee assistance, wellness or health management program — or a combination of all three — to keep employees healthy.

Disability claims associated with an older workforce cause unique circumstances for employees and employers alike. By focusing on prevention and management, however, HR teams can increase employee productivity and decrease costs for employers.

Jeanne Meister1 About guest blogger Alex Dumont
As the assistant vice president, product marketing for Standard Insurance Company, Alex leads product management and development for The Standard’s group insurance and retirement plans products and services. Insurance products include group life and AD&D, long- and short-term disability, dental and vision.

1Blodget H. The most important story in America: Family net worth collapses 40% in 3 years. Business Insider website. 2012. Available at: http://www.businessinsider.com/average-family-net-worth-collapses-40-in-three-years-2012-6?op=1. Accessed December 14, 2012.

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