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Accident and Disability Insurance Leads to Reductions in Workers’ Comp Claims

A new survey by Aflac found that 42 percent of all companies providing access to voluntary accident and disability insurance reported declines in their workers’ compensation claims.

The Aflac Workers’ Compensation Report, an online survey conducted by Lieberman Research Worldwide on behalf of Aflac, asked 600 employers from small, medium and large U.S. companies if they provided employees with access to accident or disability insurance and, if so, whether they noted a corresponding decline in workers’ compensation claims.

When responses were broken down by company size, the survey found 55 percent of large companies that provide access to accident insurance experienced declines in workers’ compensation claims, while 34 percent of small and medium-sized companies each reported declines. These findings are important considering workers’ compensation benefits paid to injured workers in 2011 rose, costing American employers $77.1 billion.

“For years, insurance agents and brokers have heard anecdotal rumors linking voluntary accident and disability insurance to reduced workers’ compensation claims, and we learned the anecdotes are true based on our recent study results,” said Aflac Vice President of Core Broker Sales Tye Elliott. “These findings confirm the correlation between accident and disability insurance and reduced workers’ compensation claims. Employers can now weigh the potential positive financial effects of offering accident and disability insurance against the costs of workers’ compensation claims.”

Measuring the Impact

In addition to asking employers if they could confirm declines in claims, the survey inquired about the significance of those declines.

  • 14 percent of all employers reported declines of 50 percent or more, while 17 percent reported declines of 25 percent to 49 percent.
  • 12 percent of large businesses reported reductions of 50 percent or more, while 29 percent reported declines of 25 percent to 49 percent.
  • 13 percent of medium-sized businesses reported reductions of 50 percent or more, while 14 percent reported declines of 25 percent to 49 percent.
  • 15 percent of small businesses reported reductions of 50 percent or more, while 9 percent reported declines of 25 percent to 49 percent.

The findings were similar for companies that provide access to voluntary disability insurance: nearly half (47 percent) of large employers reported overall decreases in workers’ compensation claims. In addition, 43 percent of small companies and 33 percent of medium-sized companies reported declines.

Respondents also were asked if they could gauge the significance of the declines.

  • 15 percent of all employers reported declines of 50 percent or more, and 15 percent reported declines of 25 percent to 49 percent.
  • 11 percent of large employers reported declines of 50 percent or more, while 20 percent reported declines of 25 percent to 49 percent.
  • 18 percent of medium-sized employers reported declines of 50 percent or more, while 7 percent reported declines of 25 percent to 49 percent.
  • 18 percent of small employers reported declines of 50 percent or more, while 17 percent reported declines of 25 percent to 49 percent.

What do these findings mean for companies? According to Elliott, “The results demonstrate that by making voluntary accident and disability insurance available to employees, companies often can decrease the frequency and expense of their workers’ compensation claims.”

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