Unum

1. Unum The Health & Productivity Connections in the Aging Work ForceThe USA Experience Kenneth Mitchell, Ph.D. VP Health & Productivity Development Chattanooga, TN

2. The Reality Economic & Demographic Influences Summary Points: • The Age Tsunami • The Politics of Incapacity • Disability Risk Patterns A New Reality

3. The Age Tsunami 1990 1980 1970 1960 1950 1940 1930 The Baby Boom Years: 1946-1964 4.5 4.0 Birth in Millions 3.5 3.0 2.5 2.0 Source: U.S. Census

4. Labor Market Dynamics Changing Work Force Dynamics are Redefining Work Options & Opportunities Summary Points: • Work Force Demographics • Shortage of Workers • Changes in Future Growth Patterns An Employer Paradox

5. U.S. Labor Force Growth Will Continue to Decline Percentage change (5-yr moving average) Note: Percentage change is calculated as a centered 5-yr moving average of projections based on the intermediate assumptions of the 2005 Trustees Reports. Source: GAO analysis of data from the Office of the Chief Actuary, Social Security Administration.

6. A Growing Shortage of Workers in the US: Expected Labor Force and Labor Force Demand Palpable by the End of This Decade Millions of People Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data.

7. Social Security and Medicare’s Cash Deficits Billions of 2005 dollars Social Securitycash deficit 2017 Medicare HIcash deficit2004 Note: Projections based on the intermediate assumptions of the 2005 Trustees’ Reports. Source: GAO analysis based on data from the Office of the Chief Actuary, Social Security Administration and Office of the Actuary, Centers for Medicare and Medicaid Services.

8. Social Security, Medicare, and Medicaid Spending Percent of GDP Medicare Medicaid Social Security Note: Social Security and Medicare projections based on the intermediate assumptions of the 2005 Trustees’ Reports. Medicaid projections based on CBO’s January 2005 short-term Medicaid estimates and CBO’s December 2003 long-term Medicaid projections under mid-range assumptions. Source: GAO analysis based on data from the Office of the Chief Actuary, Social Security Administration, Office of the Actuary, Centers for Medicare and Medicaid Services, and the Congressional Budget Office.

9. Ageing in the UK Workforce * • The Trends • 19m people in UK >50 years 22m by 2020 • 1 in 3 between 50 and pension age do not work • Mortality • Circulatory disease - 1961 - 600/100,000 2001 - 250/100,000 • Respiratory disease - 1961 - 150/100,000 2001 - 100/100,000 • Cancer - static at around 200/100,000 (ageing population) • Life Expectancy in 2001 • Females - 80.4 yrs (up 3.6 yrs from 1981) • Males - 75.6 yrs (up 4.8 yrs from 1981) • Healthy Life Expectancy in 2001 • Females - 68.8 yrs • Males - 67.0 yrs • Health Status in 2001 • 80%of people in 45-59 & 60-74 yr age groups report good/fairly good health * Office of National Statistics Data

10. UnumProvident income protection claims by age and sex 1999 - 2005 Age 51-55 Age < 25 Age 26-30 Age 31-35 Age 46-50 Age < 25 Age 26-30 Age 31-35 Age 46-50 Age 56-60 Age 61-65 Age 51-55 Age 36-40 Age 41-45 Age 36-40 Age 41-45 Males Females

11. UnumProvident claims by age and incapacity Age 31-40 Age 51-60 Age 51-60 Age 41-50 Age 51-60 Age 31-40 Age 51-60 Age 31-40

12. Health & Productivity Management: Connections All lost time is connected Lost time and healthcare costs are connected Impairment is objective, Disability is subjective …. … and depends Corporate policies and physician practices connect impairment & disability

13. Health & Productivity Dynamics Aging, Disability and Healthcare Cost Connections Summary Points: • Presenteeism is the First Indicator • Healthcare Costs & Risk Factors • LTD dominated by older workers • Musculoskeletal/Chronic Pain • STD Durations Extended with Age Challenges or Opportunities

14. Medical Conditions & Productivity Connections Prevalence = % of ee’s reporting condition Ambiguous Impairments High Scores

15. Health Risk and Absenteeism 12.6 Days 9.3 Days 6.4 Days 1 Risks 3 Risks 4+ Risks Tsai, et al. JOEM: Vol. 47, No. 8, August, 2005

16. Health Risk and Presenteeism 26.9% 20.9% 14.7% 3-4 Risks 5+ Risks 0-2 Risks Source: Burton, et al, JOEM: Vol. 47. No. 8, August, 2005

17. Healthcare Costs by Age x Risk Source: Musich, McDonald, Hirschland, Edington, Disease Managements & Health Outcomes 2002; 10(4): 251-258; University of Michigan Health Management Research Center. Used with permission. Dee Edington, Ph.D. University of Michigan, Ann Arbor, Michigan

18. Short (STD) and Long (LTD) Term Disability Distributionby age Source: UnumProvident Disability Database, 2002-2004.

19. Risk Dynamics – STD Lost Days A 60 year old will be out almost 20 days longer than the 35 year old employee * Based on UPC Short Term Disability database

20. Risk Dynamics – Lost Days by Selected Impairments The 40 + worker with a musculoskeletal or injury impairment will stay off work 12 days longer, on average, than a younger worker with a similar impairment * Based on UPC STD Database/2004

21. Risk Dynamics – Top STD x Industry & Age > 40 * Based on UPC STD Database/2004

22. Risk Dynamics – Top Long Term Impairments x Age * Based on UPC Long Term Disability Database, 2000-2004

23. Transitional Work Transitional Work Transitional Work Full work Capacity Absence from Work Stay at Work (preserve productivity) Return to Work (restore productivity) Employees do not regain 100% work capacity instantly. Recovery is incremental.

24. Impact of Transitions Length of Time Enrolled in the MRAP (N=147) Time in MRAP Percent < 30 days 60.0% 31 – 60 Days 14.6% 61 – 90 Days 9.5% 91 – 120 Days 3.6% 120 – 360 days 12.3% Reduction of Workers' Compensation Claims • Figure 1. Reduction of Workers' Compensation Claims Koviack, P.; A Review of the Effect of an Accommodation Program to Support Nurses With Functional Limitations Nurs Econ 22(6):320-324, 355, 2004

25. Retirement? • to disappear • to go away • to withdraw Source: Webster's New Twentieth Century Dictionary

26. . . . Continuing for Our Working Lives! Percent Growth in U.S. Workforce by Age: 2000-2020 Age of Workers Source: US Census Bureau International Data Base

27. Retirement Expectations… At what age do you plan to retire? Source: The New Employee/Employer Equation, The Concours Group and Age Wave, 2004 50% of a sample of Boomers indicated retiring past age 65 or not at all

28. Productive Aging – Program Building Blocks Age is not a Disability - Aging is not a Disease

29. Productive Aging: Health Strategies • Protecting work capacity from Chronic Disease: Identification to Intervention: • Health Risk Appraisal • Functional capacity screening • Manage chronic disease • Strength and endurance building programs • Work site accommodations and adjustments • Risk reduction programs

30. Productive Aging: People Strategies • Building Productivity Incentives: Bridging Work to Retirement • Phased or transitional retirement plans • Wellness Incentives • Health insurance discounts based on fitness programs • Life balance programs – Elder care – EAP – Education Options • Corporate Mature Worker Asset Protection Strategy • Continued engagement & planning

31. Productive Aging: Organizational Strategies • Reducing Corporate Barriers to Continued Productivity • Lack of RTW planning. Focusing on the when, not the how • Work site inflexibility • Reduce “Geezer” stereotypes & myths • Poor performance management – promoting “Retirement in Place” • Lack of Generational Competency • Job/Career Satisfaction - Work Life Balance, Out of Balance • Competing or conflicting recruitment, hiring & retention practices

32. Summary Trends • All lost time is connected • Greater Employee Responsibility • Greater need for support services to control work disruptions and presenteeism • Greater need to manage the organization’s human capital assets • Prepare for the new old work force • Reduce the risk of extended lost time within the new old work force

33. A Final Warning!!!!! • If we do not protect the productivity of the new old work force, we will have: • roaming bands of bored, annoyed, • grumpy, unemployed and sexually • active elders • leading to public displays of • affection, • social upheaval • overall mayhem • It Won’t Be Pretty!!!