Report: Pandemic shakes up disability claims numbers for 2020

A new report on short-term and long-term disability found that some disability claims dropped off in 2020, probably due to the pandemic and changes in employment; it also found evidence that pandemic-related stress was driving high levels of disability claims for diseases of the digestive system.

The 2020 Benchmarking Trends report, released by the Integrated Benefits Institute (IBI), is drawn from the nation’s largest dataset of claims filed with employer-sponsored short-term disability, long-term disability, federal family and medical leave, and Workers’ Compensation benefits programs. The report includes data from 13 carriers and third-party administrators, covering 10.6 million claims.

Not surprisingly, the impact of the COVID-19 pandemic during its first year was felt in the area of disability claims, as it has had a large effect on the health of U.S. workers in general. The pandemic affected both the filing of claims and the types of claims that employees filed, the report found.

Short-term disability findings

In the area of short-term disability, the report noted that lack of guidance from federal agencies on diagnostic codes resulted in inconsistency in capturing COVID-related claims in 2020. In the end, the data showed increases in claims for cases of respiratory disease, infectious disease, and mental/behavioral conditions.

In the latter area, the IBI report noted that the 2020 data possibly understates the impact COVID had on mental and behavioral health. “While the research clearly shows the negative effects of the pandemic on our mental health, the 2020 benchmarking does not reflect a dramatic increase in leave cases,” the report said. “This could be due to the treatments needing additional time to result in a short-term disability claim, the continuing stigma of seeking behavioral health services depressing the number of cases, and individuals continuing to suffer in silence. Mental health cases continue to be a high area of interest for our members and IBI will continue to investigate going forward.”

Claims reports for digestive disease, usually far down on the list of short-term disability claims, jumped up to the No. #2 spot in 2020, the report found, behind claims for musculoskeletal system and connective tissue conditions. The latter is usually a top source of claims for short-term disability, the report said, and the digestive disease claims probably increased due to stress during the pandemic.

A jump in long-term disability claims

IBI noted some interesting changes in claims reporting over the first year of the pandemic. In general, short-term disability claims dropped, possibly due to changes in employment, increased remote work arrangements, and shutdowns or work reductions in some industries.

However, the IBI report found that long-term disability claims increased about 30% in 2020 over 2019 claims. The report added that the increase in claims came in part from industries that traditionally have had lower long-term disability claim numbers. Again, the pandemic’s economic impact may have been larger in areas such as service workers and the claims from that industry segment, the report said.

“It is interesting to note, while the 2020 long-term disability benchmarking does show an overall 30 % increase in claims per 1,000 across all US employers, there are reductions in prevalence in several categories, including Services and Manufacturing, due most likely to the reasons presented in the short-term disability discussion,” the report said.