Short-term disability is one of the most popular benefit programs an employer can offer, but both the program design and its administration require thought and planning. Essentially, two types of cost savings can be obtained through effective and efficient disability management:

1. direct cost savings, through reduced administrative, management and related service fees; and
2. indirect cost savings, through reduced disability days and higher productivity.

Direct cost savings. To obtain direct cost savings, employers can negotiate favorable contracts with claims administrators, assuming that they use a vendor to provide this service. Key is ensuring that contracts include service levels designed to measure both cost effectiveness and good customer service. Some of the best ways to maximize efficiency include the following:

1. Consolidate all disability claims administration into one claims center. Different types of disability absences are often managed in a segmented manner with either various or dispersed owners. As with many transactional-based processes, there are efficiencies to be gained through consolidation into one claims management center. Other non-cost related benefits can also be achieved by consolidation, such as consistent claims management, which can minimize legal risks, and consolidated data, which can be more effectively used to manage trends proactively.
2. Ensure that claims administration processes are as efficient and effective as possible. Documenting common processes and following those consistently is essential and can help secure better rates if a company outsources administration.
3. Minimize plan complexity. More complex disability plans will require more administration, leading to higher costs.

Reducing disability days. To achieve indirect cost savings through reduced disability days, the employer has to bring employees them back to work as quickly as possible. The best ways to accomplish this will vary by situation but ought to include:

1. Timely and efficient claims intake. The more quickly claims enter the management process, the more swiftly and effectively they can be managed to closure. The best intake method to use will vary by environment. For instance, in a very computer-focused company, such as a software or consulting company, e-form intake may be readily embraced, while in plant-based organizations where employees have limited or no computer access, telephonic initiation may result in long-run cost savings. In addition to minimizing leave times, one intake process ensures that multiple claims are not being initiated inappropriately for a single injury or illness.
2. Strong, proactive return to work programs. Many studies have shown that the probability of employees returning to productive employment decreases the longer they are absent due to disability. Returning employees to work more swiftly, even if only on a limited or modified basis, typically results in a more expedient return to full duty.
3. Reduce the number of unsubstantiated claims. Most employees are conscientious benefit users but a minority will attempt to utilize or extend a disability benefit beyond what is warranted. To minimize abuse, require clear, definitive treatment plans and restrictions before approving a claim.
4. Use metrics to track and mitigate trends and determine where dollars invested in administration will yield the greatest return. For instance, metrics can help an employer identify particular areas or job types that are experiencing suspicious injuries and be proactive about validating the diagnoses and, potentially, addressing the causes.
5. Require that employees submit claim paperwork within a reasonable time period or within the time frames specified by the law.

To effectively determine whether efforts in this area are successful or need adjustment, you must first be able to determine how quickly your employees are returning to work. Better yet, compare return-to-work rates to industry standards on a case-type by case-type basis.