A recent survey has found that more than 40% of companies providing access to voluntary accident and disability insurance also reported declines in workers’ comp claims.

The Aflac Workers’ Compensation Report, an online survey of 600 employers, found that 55% of large companies that provide access to accident insurance experienced declines in workers’ compensation claims, while 34% of small- and medium-sized companies each reported declines.

The findings indicate that the safety net of these voluntary benefits makes it less likely that an employee will file a bogus workers’ comp claim in order to keep some form of income flowing if they are unable to work due to a temporary disability.

“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 Tye Elliott, and Aflac vice president, said in a prepared statement.

“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.”

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

Here are some responses of companies that provide access to voluntary accident insurance:

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

 

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

The effects on workers’ comp claims frequency by offering voluntary disability insurance coverage was most pronounced among small and mid-sized firms:

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

 

This blog is not intended to provide legal advice, but rather perspective on recent regulatory issues, trends and standards affecting health insurance, voluntary benefits, 401(k) plans and other employee benefits. Please consult your broker or legal counsel for further information on the topics covered herein.