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Unum. SSA Public-Private Disability Partnership: Options and Opportunities February 21, 2007 Kenneth Mitchell, Ph.D. VP Health & Productivity Development Chattanooga, TN. Managing the Politics of Incapacity. Competing Self Interests Stockholder vs. Taxpayer vs. Consumer Value

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  1. Unum SSA Public-Private Disability Partnership: Options and OpportunitiesFebruary 21, 2007Kenneth Mitchell, Ph.D.VP Health & Productivity DevelopmentChattanooga, TN

  2. Managing the Politics of Incapacity • Competing Self Interests • Stockholder vs. Taxpayer vs. Consumer Value • Organizational efficiency & accountability • Meeting the needs of a changing, diverse work force, i.e. aging work force • Maintaining a safe, healthy work force & work place • Protecting productivity & independence • Creating balance between benefit costs and social safety net • Dealing with competing definitions of disability and related legislation • Incentives and disincentives to change

  3. Important Features and Provisions in Private Disability Plans & Contracts The Basic Elements of a Group/Private Disability Plan • Industry & Managing Risk (What is the nature of the employees’ work?) • Major industry and specific line of business are important in managing risk (claims experience, trends, other factors) • Eligibility (Which employees are covered?) • Usually defined based on occupation or employment criteria such as job title, location, years of employment or exempt status. • Often an employer will define more than one eligible group, in order to vary coverage levels or eligibility requirements for different groups of employees. • Definition of disability (How is “disability” defined in the plan?) • Typically defined in terms of (1) ability to perform the material and substantial duties of one’s regular occupation; and (2) associated income loss

  4. Private/Public Partnership Options • Option #1 Improve SSDI Claims Adjudication Speed & Efficiency • Share medical information by treating physician • Document definitive medical evidence • Support timely IME’s & FCE’s • Option #2 Fee for Service – Early Intervention and RTW Services • Early evaluation of medical /functional status of new SSDI applicant • Develop RTW Plan • Provide ongoing RTW management – Manage Work Support Track • Periodic reviews and reassessment • Fraud investigations • Option #3 Private Administration of Public Disability Income • Reimburse private administration of public disability benefit • Support RTW and work transitions • Claimant selects disability benefit manager

  5. Create Productivity Transitions

  6. Selected Health & Work Incentives • Medical Care: Guarantee Medicare coverage for a person’s work life if currently qualified for SSDI and return to work. • A public private corollary would be the development of a partnership between Medicare and private healthcare insurance programs that distributes the healthcare cost risks between the employer, the employee, the government and the private insurer. • Such a partnership could create an incremental or a “transitional work healthcare benefit” (TWHB). By its nature we are looking at a period of transition between full employment or some appropriate increment of work. • Defined work capacity and employment would be the primary threshold of eligibility.  • Support Productive Aging: Allow RTW earnings and status count towards retirement benefit calculation, but there is a guarantee that the ultimate retirement benefit would never be LESS than the level one would receive if they had stayed on SSDI to retirement age.    • Practical Off Sets: Create proportional (or 50%) offset from SSDI benefit of RTW earnings from indexed pre-disability eligible wage base to age 66 or SSDI Normal retirement age.   • Timely Application:Make the RTW support function available up to 3 months before SSDI benefit eligible for early planning and maintaining connection with employer.   

  7. Dedicated RTW Services • Require/Expect a WorkRx, Work Prescription, as part of the initial and ongoing SSDI medical review. • Develop a dedicated team with accountability (public, private or some combination) • Providing accessible age and career development specific programs preparing individuals with significant impairments to enter or continue in a competitive work environment. • Easy, Accessible & Consistent Regionalized Service • Employee can request work support or be referred to it. • The claimant/applicant can print off a ticket to work voucher or receive one from the SSDI web site and work with certified rehab specialists. • Rehab services payments in 2 installments, (both negotiated flat fee), 50% for support (up to 3 months of support), 50% after 6 months of active employment (over 20 hours per week). • Alternative option; staff vocational services as a SSDI/SSA case management function.

  8. Claims Closure Patterns: Opportunities SSDI*** UP LTD**** Other No longer disabled * • Differences driven by: • Different definitions of disability • Lack of SSDI active claims management Death ** Reasons for DI payments ending Reach retirement age * Claim resolutions from Other, RTW and No Longer Disabled are roughly 5 times that of SSA ** Claim resolutions from Reaching Retirement and Death are roughly 1/2 of SSA. *** 2004 Results-- Journal of Economic Perspectives . Vol. 20 No. 3, Summer 2006**** YTD 9/30/06 from BAS

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