Employer disability compliance adoption lags recognition of importance

Prudential research finds many expect to seek outside help

NEWARK, N.J.–(BUSINESS WIRE)–Employers recognize the importance of complying with disability and
leave laws, but are less consistent in their adoption of services that
effectively manage these programs, new Prudential Financial Inc.
(NYSE:PRU) research has found.

“The complexity and nuances of disability and leave laws can be
overwhelming. And as employers grapple with competing priorities, and
limited resources, it can be challenging for them to fully outline and
implement plans to keep them in compliance,” said Jake Biscoglio, vice
president, Absence and Disability, Prudential Group Insurance. “It has
reached a point where many employers say they are willing to outsource
all or a portion of the administration of their compliance programs to
ensure their employees have the best support available to them.”

The 2015 Is
ADA the New FMLA? Insights on Outsourcing Employer Compliance Support
Services
research found that despite the fact that the
Americans with Disabilities Act (ADA) was enacted three years earlier
than the Family Medical Leave Act (FMLA), employer FMLA practices are
more advanced than those related to ADA compliance.

Biscoglio said part of the problem is that employer requirements under
the ADA are not as clear as those required under the FMLA. Enacted in
1990, the ADA sought to prohibit discrimination based on disability. It
compels employers to make “reasonable accommodations” for employees with
disabilities, and was expanded in 2008 to cover a much larger segment of
the population.

“Employers are willing to utilize resources to understand what is
required and how to comply,” Biscoglio said. “They need assistance, and
for some, working with external partners is the most efficient solution.”

Prudential’s survey found:

  • Virtually all employers, large and small, consider it important to
    have FMLA and ADA service capabilities in their organizations. The gap
    between employers’ importance ratings for these service capabilities
    and adoption rates suggests they need help in implementing their
    programs. For example, helping employees stay at work was considered
    important by 96 percent of employers, but only 77 percent have this
    capability as part of their ADA program.
  • A total of 5 percent of employers either do not provide ADA services
    at all or are not aware if they do, which is significant considering
    the cost of non-compliance.
  • Some employers may still be at risk of non-compliance with ADA
    requirements. Notably, the most commonly adopted ADA service
    capability facilitating an interactive process or dialogue
    between the employee and employer to agree upon reasonable
    accommodations that will help the disabled employee perform essential
    job duties is established by only 81 percent of employers,
    which may indicate a lack of understanding of compliance requirements.
  • To help meet the requirements, almost half of employers report
    outsourcing some or all of their FMLA and ADA services. About 40
    percent of employers expect the importance of outsourcing these
    services to increase due to factors such as an increasingly complex
    regulatory environment.

“The adoption of FMLA services has matured beyond compliance and is now
focused on effective administration and implementation, and we expect
ADA to mirror this pattern in the coming years,” said Biscoglio. “As a
group carrier, we’re working hand in hand with our client companies and
their advisors to help them better understand the nuances of both ADA
and FMLA, and to put plans into action for the benefit of their
employees.”

The research
was conducted for Prudential earlier this year by Greenwald &
Associates, which surveyed executives who make decisions on group
disability and absence management services. The survey involved a mix of
private and public organizations with at least 500 employees.

Prudential Group Insurance manufactures and distributes a full range of
group life, long-term and short-term disability and corporate and
trust-owned life insurance in the U.S. to institutional customers
primarily for use in connection with employee and membership benefit
plans. The business also sells critical illness, accident, accidental
death and dismemberment and other ancillary coverages and provides plan
administrative services in connection with its insurance coverages.
Group Insurance coverages strive to facilitate protection from risks
that are difficult to predict, thus fostering overall financial wellness
for employees and their families.

Prudential Financial, Inc. (NYSE:PRU), a financial services leader, has
operations in the United States, Asia, Europe, and Latin America.
Prudential’s diverse and talented employees are committed to helping
individual and institutional customers grow and protect their wealth
through a variety of products and services, including life insurance,
annuities, retirement-related services, mutual funds and investment
management. In the U.S., Prudential’s iconic Rock symbol has stood for
strength, stability, expertise and innovation for more than a century.
For more information, please visit http://www.news.prudential.com/.

Prudential, the Prudential logo and the Rock symbol are service marks
of Prudential Financial, Inc. and its related entities, registered in
many jurisdictions worldwide. Group coverages issued by The Prudential
Insurance Company of America, Newark, NJ.

0284433-00001-00

Contacts

Prudential Financial Inc.
Sheila Bridgeforth, 973-802-6852
sheila.bridgeforth@prudential.com