2008 Annual Meeting ● Assemblée annuelle 2008 Québec

1. Canadian Institute of Actuaries L’Institut canadien des actuaires 2008 Annual Meeting ●Assemblée annuelle 2008 Québec

2. Session PD-31 LTD Claims Management Moderator: Jeff Schuh VP & Sr. Actuary, Disability Reinsurance ING Reinsurance Panel: Charles Tremblay Director of Claims Munich Re Peter Gove Senior Director, Disability Management SSQ

3. 2008 Annual Meeting Assemblée annuelle 2008 An update on LTD claims management current practices focusing on: 1. General Claims Management 2. Early Intervention 3. Fraud Prevention 4. Third Party Providers

4. 2008 Annual Meeting Assemblée annuelle 2008 The impact of LTD Claims Management on Actuarial Practice:o Reserves and pricing sensitive to changes in claim practices and trendso Claim trends/management could cause future development to differ from past resultso Actuarial must work closely with Underwriting and Claims departments to identify potential shifts from current pricing and reserving assumptions

5. 2008 Annual Meeting Assemblée annuelle 2008 The Three “R”s (Rates) of Disability Pricing: o Incidence Rates o Termination Rates o Interest RatesLTD Claim Management can affect 2 out of 3!

6. Charles Tremblay Director, Claims Department, Munich Re General management of LTD claims Update on LTD claims management

7. TWO CASE STUDIES FOR DISCUSSION General management of LTD claims

8. Case study #1: A policeman submits a claim under his STD policy following a cervical sprain with treatment including anti-inflammatory drugs, physiotherapy and a 3-month prognosis for RTW. Do you think this is a payable claim? General management of LTD claims

9. The STD claim is paid according to the AP’s prognosis for 3 months When the claim adjudicator contacts the claimant to confirm the return-to-work date, the claimant indicates that he will not be returning to work due to his depression New APS is received for the LTD claim: Dx: adjustment disorder Tx: anti-depressant Work issues identified as stressors and the prognosis is undetermined. General management of LTD claims

10. Is there an opportunity that was missed to prevent this claim from extending into LTD? General management of LTD claims

11. Case Study # 2: A 32-year old welder has been on disability since March 2006 for a Dx of Chronic Obstructive Pulmonary Disease (COPD) and disc herniation L5-S1. LTD benefits have been issued since July 2006. In July 2007, the APS indicates that both claimant’s conditions have not improved and surgery is not recommended for his back problems. General management of LTD claims

12. In March 2008, the claim adjudicator conducts a reassessment of the claim for COD occurring in July 2008. The following information is obtained from the AP: unable to do his job on a permanent basis but able to do an office job permitting him to change positions frequently and without any physical effort. Considering that the claimant has been a welder all is working life and that he only completed high school, the claim adjudicator decides to accept the claimant as being ANYOCC and refers him to CPP. General management of LTD claims

13. Is there a way that the prolongation into ANYOCC could have been avoided?? General management of LTD claims

14. How can we ensure: Only legitimate claims are approved? The RTW process is initiated as soon as possible? Relapse does not occur after RTW? LTD incidental rates stay low? LTD termination rates stay high? Keep group premiums at a concurrent level with a positive group experience? General management of LTD claims

15. General management of LTD claims • Based on the LTD experience of our Clients throughout Canada, the best answer for successful disability claims management is:

16. De-medicalization of disability claims management? Claim management must not rely only on medical aspects of the disability but also on early knowledge and resolution of the non-medical issues that may be the real drivers of the claim (professional/family/life habits/issues); Life circumstances can have a direct impact on onset and duration of claims not only in cases of mental and subjective illnesses but also physical illnesses. General management of LTD claims

17. To recover is not always typical with treatment in mental, subjective and even physical claims. Control of and decrease in symptoms, and improved capacity may be the result of treatment we are looking for to permit RTW. Claim management is oriented towards actions in RTW interventions that consider claimant’s residual capacities and his/her transferable skills. General management of LTD claims

18. Claims management tools to focus on in a de-medicalized approach: Telephone interviews with claimant and employer at initial assessment is the most effective and economic tool for early identification of claimant’s professional/family issues, life habits and transferable skills Field visits to claimant, employer and the attending physician allow us a more complete overview of claimant’s situation if the telephone interview proves insufficient. General management of LTD claims

19. Information contained in the APS and the attending physician’s progress notes regarding the non-medical stressors, evolution of symptoms and claimant’s life habits Telephone contacts between the internal medical consultant and the attending physician General management of LTD claims

20. Rehabilitation is oriented not only to vocational rehabilitation but also to early return-to-work interventions focusing on identification and resolution of the non-medical barriers to return-to-work and to secondary earnings related to the claim without having to wait for improvement of symptoms. Early identification of claims that could pass the COD date because of claimant’s poor transferable skills or/and limited residual physical/mental capacities to be referred to intensive rehabilitation programs. General management of LTD claims

21. Claim adjudicators are the real decision makers? Claim adjudicators must keep control of the claim file at all stages; They are not considered as technical/administrative employees any longer but as professionals with expertise in a broad range of fields: contractual, medical, verbal and written communication, knowledge of the available internal/external resources, understanding the full impact of said resources, and the optimal moment to use them while ensuring cost containment General management of LTD claims

22. De-medicalized and responsible approach to disability management should be applied to all disability claims: Non-medical issues can drive claims, not only those with mental/subjective illnesses but also the physical conditions, by creating unjustified prolongations of disability; A non-confrontational approach where claimant, employer/policyholder and insurer look toward a win-win situation; General management of LTD claims

23. Each claimant’s particular professional and familial situation are considered, and return-to-work interventions are adapted to specific needs; An approach to disability management adapted to: The shortage in workforce which will become more problematic in the future Employers’ needs to ensure qualified workers resume work as soon as possible because they are difficult to replace. General management of LTD claims

24. Employers should consent to and adopt early Interventions programs LTD incidental rates demonstrate that employers should consider group coverage with Early Interventions instead of STD coverage A corporate culturethat attracts and recognizes expertise and experience in case management and encourages quality in disability management instead of quantity. Challenges involved in proactive claims management

25. Ensure level of caseloads permitting claim adjudicators to conduct detailed telephone interviews and give complete training and intensive coaching in the use of telephone interviews Obtain job descriptions including complete information on physical and mental/cognitive requirements Claim adjudicators should make sure that employers and claimants are aware of their rights and obligations related to the reasonable accommodations in the return-to-work process Challenges involved in proactive claims management

26. Attending physicians should be involved in the return-to-work process: getting their collaboration and their buy-in is a major incentive for claimant’s participation Ensure that the structure of the claims department permits early and effective referral of claims for return-to-work interventions Challenges involved in proactive claims management

27. The six steps to proactive disability claims management: Identify claims that will not need any interventions/investments (claimant already RTW / obvious TPD cases) For all the other claims: initial management should be oriented to identification of the non-medical issues, claimant’s residual capacities and transferable skills A RTW Action Plan should be established further to the identification of all medical and non-medical trends driving the claim which need to be resolved through an exploration of all possibilities for each case, while filling the gap between residual capacities and returning to work CONCLUSION

28. The claim adjudicator must identify the most effective internal or/and external resources that may assist in the formulation of the Action Plan Early and effective referrals of claims to external resources by establishing concrete goals and obtaining a detailed rehabilitation action plan Claim adjudicators must monitor and be responsible for decisions on all claims referred for RTW interventions and be able to identify claims for which a de-medicalized approach is not suitable or doesn’t give results. CONCLUSION

29. Thank you for your interest!QUESTIONS? ctremblay@munichre.ca

30. Peter Gove Senior Director Disability & Rehabilitation Services, SSQ Early Intervention & Fraud Update on LTD claims management

31. 2008 Annual Meeting Assemblée annuelle 2008 Early Intervention – Trends and Practices

32. Absence Management Employee Health and Wellness 2008 Annual Meeting Assemblée annuelle 2008 Definitions:

33. 2008 Annual Meeting Assemblée annuelle 2008 Sometimes it’s difficult for HR to determine reason for absence……

34. Employers are seeing steadily increasing rates of absence Privacy issues are making employers more wary of managing confidential medical information Complexity of medical conditions and management requires outside expertise Insurers have not offered much service with their STD offerings. 2008 Annual Meeting Assemblée annuelle 2008 Recent Developments

35. Depending on the specific industry, we are seeing employers willing to look more closely at absenteeism rates and benchmark their performance against their peers. Organizations that are performing relatively poorly are looking for solutions 2008 Annual Meeting Assemblée annuelle 2008 Absenteeism

36. Employers are appropriately wary of dealing with confidential medical information Anecdotally - a trend toward employees much more willing to take legal action against an employer if there is perceived bias secondary to diagnostic information. Collective agreements frequently define what information employers are permitted. 2008 Annual Meeting Assemblée annuelle 2008 Privacy

37. Work absence is not a straightforward problem. Diagnoses are subjective, complex and hard to measure. Psycho Social issues may be playing a role (work avoidance, family issues, etc) Physicians don’t have the time nor the inclination to understand work conditions 2008 Annual Meeting Assemblée annuelle 2008 Complexity

38. 2008 Annual Meeting Assemblée annuelle 2008

39. Insured STD programs have typically been very transactional, process driven and haven’t offered much value with respect to absence management. Traditional STD plans offer very little in the way of management for casual absence. 2008 Annual Meeting Assemblée annuelle 2008 STD

40. A movement away from traditional STD plans to either extended duration waiting period or self insured. Extended Duration waiting period The LTD waiting period is extended to as long as 18 months and the LTD premium savings are used to fund a third party absence management company 2008 Annual Meeting Assemblée annuelle 2008 Plan Design Trends

41. Insurers and third party providers are offering programming. Much of the programming looks very similar, but there are significant variations in quality. Standard program design involves establishing a number of days of absence after which the absent employee is referred to the service provider. 2008 Annual Meeting Assemblée annuelle 2008 Standard Absence Management Program Design

42. Service provider then engages in a process to manage the absence. Process can include telephone interviews, medical information review, establishing functional abilities and restrictions, developing return to work programs, etc. 2008 Annual Meeting Assemblée annuelle 2008 Program Design

43. The employer/program client should have clear, written policies regarding absence available to employees The provider needs to understand that they are an agent of the employer and therefore governed by the same rules/legislation as the employer. 2008 Annual Meeting Assemblée annuelle 2008 Best Practices

44. The employer/client should have significant ability to track and measure rates of absenteeism amongst employees The service provider should have significant “real time” capability to report on a case by case, and aggregate data basis. 2008 Annual Meeting Assemblée annuelle 2008 Best Practices Cont’d

45. How long have you been in business? How many staff do you have and what are their qualifications? How many years of claims experience do they have? What is your staff turnover rate? 2008 Annual Meeting Assemblée annuelle 2008 Questions to Ask Your (prospective) Service Provider

46. Do you have a written attendance policy? Are there exclusions? (refusal of modified duties, cosmetic surgery, etc.) Do you have data? Do you have policies regarding return to work programs? 2008 Annual Meeting Assemblée annuelle 2008 Questions the (prospective) Service Provider should be asking

47. 2008 Annual Meeting Assemblée annuelle 2008 Future Trends

48. 2008 Annual Meeting Assemblée annuelle 2008 Psycho Social Determinants of Health

49. Employee health, wellness, and attendance is a complex, psychosocial issue. Early intervention will need to address a wide range of issues – economics, behavioural health, employee satisfaction, etc. 2008 Annual Meeting Assemblée annuelle 2008 Future Trends

50. Here is one example of what might be a useful direction JAMA Vol 298, Sept 26, 3007 Telephone Screening, Outreach, and Care Management for Depressed Workers…. -All employees screened by HRA (Health Risk Appraisal). -Employees with factors positive for possible depression where invited to participate 2008 Annual Meeting Assemblée annuelle 2008 Future trends