More than a year after a pandemic transformed the world of work, how are group disability insurers responding?
For more than a quarter century, industry experts have attended RGA’s U.S. Group Insurance Disability Claim Leaders Forum for candid discussions on the most pressing questions and trends affecting the industry. After a period of unrelenting change, these conversations now seem timelier than ever. RGA asked forum leaders, Kari Briscoe, Director, Claims Consulting and Jill Underhill, Senior Disability Claims Consultant, to share forum highlights and provide some perspectives on what’s next for the industry.
The industry was braced for a surge of long-term disability (LTD) claims for "long COVID-19" to cover those who continue to struggle with COVID-19-related illnesses after the course of the disease. What has happened to date?
First, let’s define long COVID-19. After the initial infection symptoms have cleared, "long-haulers" can experience an array of subjective symptoms such as fatigue, mental fog, dizziness, headaches, myalgias and more. This is in addition to more objective and measurable impairments. Subjective symptoms are typically not verified by testing, exams, or subspecialty evaluations. Therefore, the condition can be difficult to pin down. When evidence of this diagnosis first emerged, many in the industry were fearing a surge in these types of claims, but forum participants are not yet seeing a significant volume or impact to LTD claims.
The symptoms you are describing are subjective. Are group carriers applying “subjective condition” limitations to these cases?
Without a doubt, long COVID-19 is real. Therefore, insurers are not questioning the validity of the condition. Subjective condition policy language limits the duration of the disability claim when the symptoms are vague and difficult to verify by testing or exam. Some carriers are considering limiting these claims to 24 months for insureds who are unable to provide objective supporting medical evidence. Carriers consider testing, examination findings, functionality, and the individual claim circumstances to determine whether to apply the limitation. Forum participants indicated they would be looking at these claims on a case-by-case basis and would not be making any formal procedural changes.
You mention that long COVID-19 has not materialized as a significant source of LTD claims, but what overall impact has the pandemic had, in general, on mental health claims?
Carriers are watching mental health claims closely. Remote work, for example, has been very hard on those who need a social environment and have been extremely isolated. Economic disruptions have also put many under tremendous strain. Some insurers are seeing an increase in mental health claims, but it’s difficult to determine how much of this is being driven by lockdown or other stressors related to COVID-19 versus trends that have been developing for years. Also, it’s not clear that carriers are adopting any radically different or unique approaches to case management for mental health claims at this point.
Speaking of lockdowns, has the unplanned, pandemic-induced shift to remote work had a permanent impact on occupational definitions for disability?
The short answer is maybe. Companies have begun considering remote work as part of the own occupation disability insurance analysis. Just to level-set, under this definition, the claimant receives benefits if he or she cannot perform his or her “own occupation.” This has come up in the context of teachers, healthcare workers, and even sales territory managers. People are now far more accustomed and accepting of remote instruction, video conferencing, and telehealth. This may change how we think about professions or roles that were once physically strenuous, like teaching, which requires employees to be on their feet all day in a classroom, or sales, which can demand long-distance travel. Now these roles may become more sedentary and conducted online, and therefore the physical requirements could change. While group insurers at the forum reported that there are no broad or formal practice changes, many are watching closely and reviewing cases based on whether changes in these roles become more lasting.
When it comes to regulation, there has been one significant change in the United States: On April 9, 2020, Virginia Senate Bill 567 was signed into law. This bill applies to any policy delivered or issued in Virginia on or after July 1, 2021 and mandates that short-term disability coverage for childbirth must include a benefit of at least 12 weeks following birth. This seems like a real shift for U.S. group disability insurers.
It’s something to watch, but it may be too early to tell. Insurers appear to be preparing, observing, and waiting. Those with Virginia operations are planning for compliance and adjusting policy language. Participants are struggling with how to apply the 12 weeks if there is a pre-partum disability or if it rolls into an LTD claim. One carrier mentioned they planned to pay 12 weeks from the date of birth and would not consider any pre-partum disability to be counted in the 12 weeks. Additionally, a handful of carriers mentioned that they would not require any medical certification after the typical six or eight weeks paid from birth.
How is the industry looking at return-to-office plans? Who is back already, who is not going back full-time, who will be virtual?
In many ways, the pandemic magnified existing trends and challenges affecting the way claim teams function, just as it has upended the lives of claimants. Most carriers are exploring a hybrid model, in which the workforce works from home part-time and in the office part-time. The details for that model differ among carriers. Some are allowing workers to choose. Others are offering the ability to stay home based on performance and requiring less-experienced members of the workforce to return to the office sooner. There are carriers who are piloting programs to require proof of vaccination from employees before they return to the office. A related concern we heard was that with the rise of remote work, turnover may be increasing as individuals are less bound to a specific region when seeking employment opportunities.