How will the coronavirus impact long-term disability claims?
The coronavirus pandemic is expected to impact employers’ short-term disability claims’ experience as workers fall ill and require time off work to recover from the virus, but plan sponsors may also have to prepare for an increase in long-term disability claims after the crisis eventually ends.
The spike in claims could follow the same pattern as it did in the wake of the 2008 recession, says Lianne Clarke, practice lead and vice-president of wellness and disability solutions at Cowan Insurance Group. “It’s [because] of the impact to the economy that we’re going to see a spike in STD after this, and that’s going to flow through to LTD.”
Employees have been hit hard by the coronavirus pandemic — more than 2.13 million Canadians have already filed for employment insurance in the past two weeks. For companies that have implemented temporary layoffs, that will have knock-on effects for the employees who remain.
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“You’ve got so many layoffs and reduced workforces happening right now that those people who are still in a job are happy to be in their job, but they’re taking on all that extra workload,” she says. “Historically, what we see when this happens is, . . . once everything stabilizes, those people who have been working feel burned out, and you’ll start to see them taking disability for other reasons — the stress of all this — which then flows through to LTD.”
As well, notes Clarke, employees who aren’t used to working at home and don’t have ergonomic work setups could face the onset of neck, back, shoulder and arm issues, which could lead to STD or LTD claims for musculoskeletal issues.
However, the potential effect of the coronavirus on employers’ LTD experience isn’t yet on their radar, she says, but they still have opportunities to support staff and try to mitigate the risk. “The big concern right now is, how do we support employees in this new work environment, how do we make sure they’re taking care of their mental health [and] how do we make sure that they’re supported with ergonomic setups?”
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She suggests employers share a list of relevant supports that are offered under their benefits plans and wellness programs. They should also make sure to check in with any employees who’ve been temporarily laid off.
“Stay connected with them to reassure them,” says Clarke. “Check in with them, make sure they’re looking after their health while they’re off, because what we don’t want to see is people are recalled from their layoff and they’ve become disabled while they’re laid off. If [employers] have continued coverage during their layoff, they’re going to be claiming for STD at that point.”
In a emailed statement to Benefits Canada, the Canadian Life and Health Insurance Association said it was too early to speculate on the impact of the coronavirus on LTD claims. “We don’t have any evidence or claims data from our members at this point, so we can’t point to trends for reasons for claims.”
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