In 2018, insurance companies saw an increase in disability claims – with many for psychiatric as well as musculoskeletal conditions such as fractures, backache and spinal conditions.
Alexander Forbes Health Management Solutions has reported mental and behavioural conditions, including stress-related conditions, as the leading reasons for their clients’ long term disability cases from 2016 to 2018.
With South Africans experiencing greater work pressure, a growing rate of unemployment and an increasing cost of living, individuals find themselves burdened with debt and societal pressures – in turn leading to high levels of stress.
As a result, organisations face increased pressure to ensure well-designed wellness programmes are in place as support for employees – or risk facing a negative impact on the bottom line.
Speaking at an event in Port Elizabeth on Thursday, Alexander Forbes health management services head Myrna Sachs said companies needed to take a proactive approach in managing high-risk employees.
The first signs of irregular mental and behavioural conditions, Sachs said, included absenteeism trends and extended sick leave.
“Close monitoring is symptoms required", especially within the extended sick leave period of 14 days or more, as this will indicate the potential for prolonged absenteeism from work, which may lead to a disability claim.
“Instead of effectively managing the disability process, employers rush to settle cases within the legislated period, handing disabled employees over to their insurers for income replacement benefits or the payment of a lump sum.
“As a result of the new tax legislation on disability benefits, there is now less incentive to return to work after a short period on an income replacement benefit,” she said.
“Organisations need to treat the cause and not just the Sachs said.
She said employees who had access to support through their employer’s group benefits – for example employee assistance programmes, absenteeism and incapacity management or a rehabilitation benefit – tended to return to work sooner and more successfully than those who did not.
The Association for Savings and Investment South Africa said that SA life insurers paid R63.7bn in claims relating to death, disability or critical illness over the 12-month period ending June 30 2018.
According to Martin Teubes, head of consultants and actuaries at Alexander Forbes, more insurers noted that while they were seeing an increase in the number of claims, there was also an increase in the number of higher-income earners making claims.
This has resulted in the rise of the average size of the death benefit paid, with the potential key drivers being stress and lifestyle-related diseases.
“While it isn’t directly measurable, we noted that disability income claims tend to increase when the economy is under strain.
“The impact of potential job losses and increase in cost of living results in financial stress.
“This could lead to physical or mental illness or both,” Teubes said.
Sachs said organisations therefore needed to respond to key warning signs early.