Best practice claims management for group risk perks

Incidences of long-term absence are few and far between, but the way a claim is managed can make a significant difference to the outcome for all concerned.

The groundwork for claims management is often put in place long before a claim occurs. Simon Bailey, head of marketing for employee benefits at Aegon Scottish Equitable, says: “As soon as a scheme is put in place, we will work with the employer to establish claims procedures. This includes areas such as: who is responsible for handling the claim, when claims will be notified to the insurer and who will liaise with the employee.”

Colin Micklewright, head of income protection business development at Canada Life, also recommends giving insurers details of other relevant benefits and services within the organisation. “Benefits such as [private] medical insurance, occupational health services and employee assistance programmes can complement what we are doing to return an employee to work,” he explains.

Possibly the most important procedure to put in place is early notification of potential claims to the insurer. “The best opportunity to return someone to work comes in the first four-to-six weeks of absence, so the earlier the employer notifies us the better. This will often be several months before the end of the deferred period, but once someone has been off for six months or more the possibility of their returning to work has all but disappeared,” says Micklewright.

Early notification allows insurers to pull in other resources to help rehabilitate the employee, even if it might be several months before its financial liability is incurred. Not only does this boost the chances of the employee returning to work more quickly, it also benefits the employer as, by reducing the cost of a claim, increases to future premiums will be kept under control.

Some insurers will even offer financial incentives to employers that make early notification the norm. For example, Legal & General pays a bonus of 5% of premiums to employers with schemes with more than 500 lives which notify it of at least 80% of absences of more than four weeks within six weeks.

Vanessa Sallows, underwriting and benefits director for Legal & General’s group protection business, recommends taking early notification a step further. “We would encourage employers to put a proactive absence management system in place. This should include red flag triggers to identify potential claims at the earliest stage; return to work interviews, and training for line managers to help them identify and deal with potential absence problems,” she explains.

While this early warning system will prevent some claims, others are impossible to avoid. But again, the right protocols will help to limit problems. “Contact with the employee is essential. From the very beginning, [employers] should set out expectations so the employee knows what they need to do and what they will receive,” adds Sallows.

After this initial contact it is good to keep in touch on a regular basis, depending on the nature of the illness or injury, to see how the employee is doing and to keep them informed about work. Bailey says: “Social exclusion can be a major hurdle to an employee’s return to work so make sure someone, preferably a line manager, keeps in touch with them.”

Employers also need to consider their legal responsibilities. Under disability discrimination legislation, an employer is required to make reasonable adjustments to enable a disabled employee to remain in work. Steve Browning, group protection product manager at Friends Provident, says: “Claims are independently assessed by experts who will be able to give details of what someone can and can’t do and the changes that could be made. An employer who sees a disability or long-term absence as a reason for dismissal can find themselves paying a six-figure settlement in an employment tribunal.”

It is also important to think about facilitating an employee’s return to work during the claims process. Bailey recommends taking a proactive to this. “If you can get someone back in any capacity, perhaps part-time or in a different role, this will have a huge benefit in terms of their full return,” he explains EB Five steps to best practice claims management 1. Establish guidelines on how to deal with claims as soon as the insurance scheme is put in place. 2. Inform the insurer as early as possible of any potential claims. 3. Regularly contact the employee during their absence. 4. Use other benefits and services to complement the work of the group income protection insurer. 5. Examine ways to bring the employee back to work, whether this is in a part time capacity, in a different role, or by adapting the workplace or their job duties.