Aldrich's skills are current again, honed during a year-long volunteer position at the National AIDS Fund offices in Washington, D.C. His stamina is back. He's ready for a full-time job. "This is one earnest, corn-fed boy from Indiana," he explains. "When I needed disability, I was grateful for it. Now I have a contribution to make, and I want to make it."
In the eyes of many HR professionals, Ken Aldrich is a modern-day Lazarus, raised from the nearly dead by combination antiviral therapy. His undetectable viral load means that, while the virus remains in his body, HIV is reproducing below the ability of current tests to find it. Aldrich isn't dying. His immune system is significantly reconstituted. He looks and feels healthy and may have a normal life expectancy. Would you offer Aldrich a position if you had an opening that requires his background and skills? Even if you would, there's still a big obstacle for many people like Aldrich.
Thousands of people with AIDS, cancer and other life-threatening conditions have had similar amazing responses to the newest medications and treatments, forcing a welcome reassessment of their former careers. Many left responsible positions when their health prevented them from fulfilling the essential functions of their jobs. Now these newly healthy people who've struggled with nearly fatal illnesses want to be productive again, but they're terrified of the land mines in most organizations' benefits plans, namely, disability insurance policies. These policies usually contain the single insurmountable obstacle to these individuals being productive on your behalf. For most people who have drawn benefits from group long-term disability (LTD) plans, the threat of poverty in the small print of your LTD coverage is just too scary.
In a time of low unemployment and rampant skills shortages, can you afford to keep insurance coverage that might be preventing your organization from recruiting and retaining some very talented individuals, especially when it might be easily fixed? It's worth considering.
Group disability insurance doesn't presume medical miracles.
Consider what could happen to someone returning to work who has received benefits under a group LTD plan from a previous employer. Jacques Chambers, program manager for benefits at AIDS Project Los Angeles, explains, "If the person moves to a new job, becomes ill and goes out again on disability within six months, the previous LTD plan is likely to consider that part of the old claim [and cover him or her]. However, after six months, the old insurance has expired. Under the new plan, the minimum we see is a 12-month, preexisting condition exclusion. If the person becomes disabled related to the preexisting condition before 12 months are over, there's no coverage. So, if you have someone who is making $3,000 a month on disability with the prospect of losing the job and having only state disability insurance (SDI), we [shouldn't] blame them for not returning to work," says Chambers.
In other words, a person who's been drawing disability income because of coverage under a previous employer risks that insurance coverage as soon as he or she begins working again. For the first six months, the previous employer's disability insurance covers the person. But after that, coverage under the previous insurance expires, and typically the person has to wait another six months before the new employer's disability insurance coverage kicks in. Anyone who becomes too ill to work during that second six months won't be covered under either the former, or the present employer's policy, and faces a life of poverty.
Yet medically, the chances for people disabled by life-threatening illnesses are improving tremendously and are enabling them to return to work in increasing numbers. Cancer treatments change and improve so rapidly that some specialists hesitate before using the newest "miracle" treatment, knowing there will soon be another, even better one. The medical turnaround dubbed the "Lazarus syndrome" by the AIDS community is barely two years old. AZT has been available since 1987, but no other AIDS drug has been FDA-approved for more than three years. The sense of a future that these drugs have given to people who assumed they were dying is real. But having a future is outpacing the provisions in many disability insurance plans. How risky would it be for them to replace disability income with earned income?
The threat of poverty in your LTD plan.
Many AIDS service organizations are exploring answers to that question with their clients. At AID Atlanta, director of education and communications Mark King responded to clients asking about returning to work in November 1996 with "Reconstruction," a series of forums led by experts on psychological readiness, financial planning, the Americans with Disabilities Act (ADA) and benefits. King reports that before the series, half of the 200 attendees had a "strong interest" in returning to work. At the forum's conclusion, the "strong interest" dropped to zero. "They're not budging, because they don't trust the ADA to protect them, the workplace to keep their diagnosis confidential, or that they can find a job where they can be frank and not be hassled. They especially don't trust disability programs that say they must work six months before regaining eligibility," King says. "Or they have a sweetheart deal from their long-term disability when they left that will pay them well to age 65. Why give it up?"
Fear of losing disability insurance coverage is the most daunting barrier to returning to the workplace. Yet some disability plans have more flexibility than their customers realize. And not all HR professionals are equally prepared to explain what the policy allows.
Lynn Franzoi, senior vice president for benefits at Fox Group, an entertainment company based in Beverly Hills, California, writes her firm's own summary description of benefits—in layperson's terms—to better the chances that employees will understand the provisions of the plan. She then asks the insurer to approve the explanation she has written to ensure the carrier will honor it.
If a Fox employee who has been on disability leave returns to work full time—at any company—then is disabled with the same ailment within 180 days, the disability benefit kicks in right away. That provision isn't unusual, although many customers don't know it's in their policies. Franzoi explains that under the plan available at Fox, which is underwritten by UNUM Life Insurance Company of America based in Portland, Maine, a person who has been drawing disability income may return to the workforce—at any company—on a part-time basis and the LTD benefit isn't reduced until the sum of earned income and the disability benefit exceeds previous earnings. The provision in UNUM contracts is called work incentive benefits, a feature of virtually all UNUM contracts. Another helpful provision is residual disability benefits, which allow a person to satisfy the elimination period (the period that an employee must wait between coverage under an old plan and coverage under his or her new employer's plan) while she or he is partially disabled. Does your group disability policy have work incentive benefits? Residual disability benefits? If not, is there any reason not to explore a policy with a carrier that offers these provisions?
Franzoi has negotiated some portability into her plan as well. Although it doesn't allow the full benefit to be converted, it does allow the employee to convert coverage to an individual plan, pay the premiums and carry disability insurance personally until a new employer's benefits are fully in place. That way, even if the employee becomes disabled again before the new employer's policy takes effect, the employee is still covered.
Such coverage isn't only for larger employers. Franzoi stresses that she first negotiated these provisions into Fox's plan in 1993 when the company employed fewer than 3,000 people. The company now has 7,500 employees.
Employee education is important. Franzoi explains that only benefits specialists—not HR generalists—answer questions regarding Fox's plans. Giving out information that's exactly correct matters so much—both to the organization and to employees, or potential employees. People with disabilities already fight an uphill battle much of the time to gain access to the benefits to which they're legally entitled. Fox managers want to minimize such battles for people who associate with the organization and, as much as possible, return people to productive work life.
HR can reduce the barriers to returning to work.
Employers eyeing this largely highly skilled group of potential employees in the midst of a skilled labor shortage (see Workforce's March cover story "Economic Forces Are Squeezing Growth Potential") might be interested in ways to tap into this human capital. After all, these individuals often have kept their skills fresh. Many people with cancer, AIDS and related conditions have spent their disability leaves learning how to work within political and bureaucratic systems, organizing and lobbying, facing loss and emerging stronger, and developing creative responses to constantly changing conditions. There are good business reasons for bringing back to work a skilled, experienced worker.
- First, it replaces disability income with earned income, reducing the amount of money being paid from insurance, which can reduce premiums.
- Second, it taps a pool of skilled workers (usually in their productive prime) who were lost to the workplace until the advent of the new treatments.
- Third, it enriches the workforce in much the same way that hiring returning soldiers from World War II enriched it, incorporating people whose life experience has given them new maturity, greater depth of character and renewed will to achieve.
HR professionals can lower the barriers to the return of this skilled, seasoned group of workers by being proactive on two fronts: negotiating provisions of the LTD policy, and communicating with present and prospective employees.
Negotiate with your LTD provider about residual disability benefits that would allow a person to return from disability leave part-time without losing benefits. Reduce the time period for exclusion of pre-existing conditions. Improve the portability of the policy. Are the incentives aligned to encourage someone to come back to work?
Those who underwrite their own disability plans also usually hire a disability carrier to manage the benefits process. In that scenario, the same questions apply. However you construct it, you make the choices about what's in the plan.
Concerned that adjusting this benefit will be costly? Remember, ideally employees pay for LTD insurance so that the income can be tax-free when disabled employees draw upon it. The same is true in all states. Often, adding portability and residual disability benefits costs nothing. Of course, reducing the elimination period for coverage and reducing the time period for pre-existing conditions will increase premiums, but the employees who pay those premiums receive a benefit that far outweighs the additional cost.
Do you offer benefits to part-timers? If a person who's receiving residual disability benefits from a former LTD plan can count part-time work against the elimination period, that's the only bridge they'll have to bridge the terrible gap.
There are some talented, motivated people out there who are ready for the next step after buying full-size toothpaste. Is your company's benefits plan ready to cover them?
Workforce, June 1998, Vol. 77, No. 6, pp. 104-110.