Guardian Life Says Offering Accident/DI Improves Workers’ Comp Claim Results

NEW YORK, N.Y. – New research from The Guardian Life Insurance Company of America® (Guardian Life) found that 46% of employers reported a decline in workers’ compensation claims after offering accident or short term disability insurance – 42% reported declines of 50% or more, while another 22% cited declines between 25% to 49%.

This report is the latest from the 7th Annual Guardian Workplace Benefits Study titled “Risk Redirect: Using Group Accident and Disability Insurance to Reduce Illegitimate Workers’ Compensation Claims.”  The findings suggest that employers who offer accident or short-term disability insurance as part of a broader risk management strategy are also likely to alleviate fraudulent workers’ comp claims.  Recent research shows that workers in high-deductible health plans (HDHPs) have a greater likelihood of reporting off-the-job injuries as workers’ compensation claims.

The study found employers who offered group accident and/or disability plans to their workforce to help pay for expenses not covered by their benefits programs reported a decline.  For example, one in four employers experienced a decline in workers’ compensation claims after offering voluntary accident insurance, and one in eight experienced a decline after offering short-term disability insurance. Additionally, 38% of employers reporting lower workers’ comp claims also saw a reduction in fraudulent claims and attribute much of that decline to implementing an accident or short-term disability plan.

“Brokers and benefits consultants have an opportunity to coordinate their services between the group benefits and risk management sides for their clients by proposing voluntary accident and disability insurance as a solution,” said Michael Naumann, Western U.S. Practice Leader, Guardian Life. “We’ve seen this voluntary benefits strategy work, particularly among industries with a higher than normal workers’ comp frequency and costs.”

Employers who made voluntary benefits an important part of their overall risk management strategy reported better results. They reduced workers’ compensation claims (29%) compared to those without a well-defined voluntary benefits strategy (14%).  Most notably, nearly two-thirds of firms with at least 1,000 employees report improved workers' comp results and fewer fraudulent claims. Adds Naumann: “Employers paying all or part of the cost for an accident and/or short-term disability are likely to see even greater results, since a larger proportion of the workforce will own the coverage.”

Methodology

Employer results are nationally representative and based on a survey conducted of 1,500 employee benefits decision-makers covering all industries with at least five full-time employees. Employee results are based on 2,000 employees aged 22 or older, who work full-time. The 7^th Annual Workplace Benefits Study was fielded in the spring of 2019. The margin of error at the 95% confidence level is     +/-2.3%.