If you are in business long enough, chances are that you’ll eventually be involved in at least one benefits-related legal dispute with an ex-employee.

The good news: There are ways to avoid common mistakes that get in the way of resolving disputes quickly. Even if you are sued, taking these three steps can keep things from going from bad to worse:

1. Focus on a narrow time period

Companies open the door for trouble when a poor-performing employee is given a raise or bonus – and then fired shortly thereafter.  Huge red flag: Employees who are terminated shortly after a dispute over paid leave or disability.

In many cases, the employers can’t fall back on a history of poor performance reviews. The problems are often more recent in nature.

Best practice: In performance reviews, supervisors should focus the documentation only on the time period the review covers – and not anything earlier. If an issue’s taken to court it may look like the employer’s retaliating against the employee for taking leave or claiming a disability.

2. Follow up promptly

It’s dangerous to terminate someone shortly after he or she has filed a complaint.  If an employee’s made a written or verbal complaint shortly before being fired, the employer is vulnerable to retaliation lawsuits.

Timing’s of the essence when it comes to following up on complaints. An investigation that’s started within a day or two of a complaint shows that the firm took the issue seriously.

3. Abide by plan documents

Sometimes the first time you’ll hear about a benefits or pay-related complaint is after the employ files a claim with the DOL or EEOC.

Emotions usually run high when this happens. But it’s crucial to follow to the letter the investigation and dispute-resolution procedures spelled out in your plan documents.  Failure to do so almost always puts the company in legal jeopardy.

The result is almost always a court case or an expensive settlement – even if the company was in the right. Reason: Under ERISA, the only thing that’s worse than deviating from plan documents is not having written dispute-resolution procedures at all.

Benefits and HR managers are used to handling accommodation requests for an array of medical issues. But handling mental health issues are especially tricky — and filled with legal pitfalls.

As employees have become more aware that mental health issues like depression and anxiety are considered medical conditions, accommodation requests have shot up dramatically. How far does your organization need to go to honor such requests?

As long as the employee’s anxiety can be documented medically and unless honoring the request would create extreme economic hardship for your organization, you must honor the request. It’s also crucial to look at the employee’s job description. The key issue to look at is whether the employee can still perform essential job functions.

Also, the employee may not need a permanent accommodation. Example: He or she has started taking a new type of anti-anxiety medication.

Courts have ruled that ADA permits employers to obtain enough information from employees’ mental health provider (psychiatrist, psychologist, licenced clinical social worker, etc.) to determine whether an accommodation is needed and, if so, for how long.

Keep in mind: The purpose of ADA is to provide equal – not preferential – treatment to employees with physical or mental disabilities.

Reasonable vs. unreasonable requests

Legally speaking, mental health conditions are protected under the Americans with Disabilities Act (ADA). That means your organization must honor any reasonable accommodation request tied to a mental health issue. But what’s considered reasonable and unreasonable?

A reasonable request would be something like, “I have an anxiety disorder and my therapist says that I need to limit my work travel.”

An unreasonable accommodation request: “My therapist says my boss is the cause of my depression. I need a new supervisor.”

Even if the accommodation request is unreasonable, you may still have additional legal obligations. In the example above,  you may have a discrimination – rather than accommodation – case on your hands.

Key question to answer: Did the supervisor single the employee out for abuse or ridicule due to his or her mental-health condition? 

MHPA compliance

The Mental Health Parity Act (MHPA) also protects employees in most organizations. MHPA requires that your annual or lifetime dollar limits on mental health benefits (including through your EAP) be no lower than the limits for medical benefits offered through your firm’s health plan.

Even so, you still have discretion regarding the extent and scope of the mental health benefits you offer to employees and their families. This includes sharing the cost of premiums, limits on numbers of visits or days of coverage, and requirements related to proving medical necessity.

Supervisor training is crucial

In many cases, supervisors’ level of education and training in handling the challenges of mental health issues is your best defense – or biggest risk – in avoiding lawsuits. Experts recommend making it a top priority to train supervisors to follow three basic rules:

• Refer employees to the EAP program. Don’t play amateur psychologist if you suspect an employee has a problem.
• Direct employees’ accommodation requests and benefits-related problems (e.g., scheduled therapist appointments clash with work schedule) to HR/Benefits, and
• Avoid making – and don’t tolerate – inappropriate jokes or comments at the affected employee’s expense.

The last issue may be a sore spot with supervisors. But it’s critical. Employers have lost or been forced to settle multi-million dollar mental health discrimination lawsuits because of someone’s “innocent joke.”

On a nationwide basis, fraudulent long-term disability claims are a $5.5 billion drain on employers. The cost includes claim payouts, subsequent premium increases, lost productivity and staffing problems. The good news: There are legal ways to fight back.

None of the following factors automatically justify a full-scale investigation. But they add up. The more factors in place, the greater the likelihood of a false disability claim:

• The worker is a new hire and has a history of short-term employment
• He or she was recently demoted or clashed with a supervisor
• The employee is unusually aggressive about the claim (e.g., hires a lawyer as a first step) and/or
• The story about the cause or severity of the injury keeps changing.

According to experts, either of the first two factors in combination with either one or both of the latter two could provide cause to probe a little deeper into the claim.

Go through your carrier

What should you do if think you think the claim is fishy? Alert your plan carrier about your suspicions and let the insurer’s investigation department handle it.

The biggest mistake that employers make in these circumstances is to simply take matters into their own hands. Why? Because even if you uncover evidence of fraud, the information might not hold up in court.

On a nationwide basis, fraudulent long-term disability claims are a $5.5 billion drain on employers. The cost includes claim payouts, subsequent premium increases, lost productivity and staffing problems. The good news: There are legal ways to fight back.

Common red flags

None of the following factors automatically justify a full-scale investigation. But they add up. The more factors in place, the greater the likelihood of a false disability claim:

• The worker is a new hire and has a history of short-term employment
• He or she was recently demoted or clashed with a supervisor
• The employee is unusually aggressive about the claim (e.g., hires a lawyer as a first step) and/or
• The story about the cause or severity of the injury keeps changing.

According to experts, either of the first two factors in combination with either one or both of the latter two could provide cause to probe a little deeper into the claim.

Go through your carrier

What should you do if think you smell a rat? Alert your plan carrier about
your suspicions and let the insurer’s investigation department handle it.

The biggest mistake that employers make in these circumstances is to simply take matters into their own hands. Why? Because even if you uncover evidence of fraud, the information might not hold up in court.

The older employees are the lower-risk group, finds a study by the American Academy of Neurology.
The study looked at airplane pilots ages 40 to 69 – a profession where even the slightest miscues can cause disaster.

Researchers ran participants through a series of tests, ranging from verbal communications, use of instruments and elapsed time in finding and fixing technical problems. While the older pilots had slower reflexes in the physical-response tests, they scored higher overall.

Reason: there’s something called “crystallized intelligence.” The longer someone performs a specific task, the more it becomes second nature.

Researchers suggest the study can be applied to any profession where on-the-job safety depends on showing a combination of mechanical and mental skills.

In order to be effective, the program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term health costs.

How wide-reaching should the program be? After all, it doesn’t make sense to pay for services your employees don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs can be broken down into four tiers of employee need, from which your organization’s return on investment (ROI) can also be measured.

Tier 1: Education

Tier I employees struggle with weight management problems but don’t need a health coach.  Instead, they may benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

How to measure ROI: utilization. Do employees click on the Web site? Do they return to the site regularly? Do people use the nurse line? Your program vendor should provide you detailed use stats.

Tier 2: Clinical supervision

If the employee has been diagnosed as obese — a body mass index (BMI) score over 30 is obese, over 35 is clinically obese — he or she would do better working with a health coach in a clinically supervised program.

Three keys to getting maximum results:

1. Periodically have participants rate their relationship with their health coaches. Not everyone clicks, so a change may be in order.
2. Coordinate your disease management care with your employee assistance program (EAP)services. Reason: Inability to control weight is often closely tied with mental health issues — and one can negatively affect the other. The more closely your EAP and obesity program managers work together, the higher the chance for success.
3. Beware of the fade-out effect. Many employees in weight-loss programs get off to a great start and then fall back into old habits. People should re-commit to the program after three sessions, four months and nine months.

To measure ROI, look at utlization, goal achievement and reduced presenteeism. Of course, presenteeism is notoriously difficult to measure with reliable dollar figures. So how can you overcome that problem?

• Start with employees’ salaries. Let’s suppose one participant earns $40,000 per year.
• Ask workers to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. For this example, let’s assume it averaged to 50%.
• Collect scores again six months and one year into the program and then multiply the difference by salary. The result is your estimated productivity ROI.

In the example above, if the employee earning $40,000 improves from 50% to 75% after one year, the productivity related ROI is $10,000.  

Tier 3: Medical management

At this level, the obese employee needs a higher level of care than a health coach can offer. The employee has chronic health conditions related to obesity — such as diabetes, high blood pressure, and/or sleep apnea — and needs a physician case manager. Specifically, the employee needs to set up regular visits with the doctor and create a treatment plan.

To measure ROI, start with the lower-tier criteria, then track quarterly and year differences in FMLA or paid absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4: Morbid obesity

At this level, the employee has been diagnosed as morbidly obese — BMI over 40 — and is considered a potential candidate for gastric bypass surgery.

ROI is measured through ongoing health claims as well as the previous criteria.

In order to be effective, the program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term health costs.

How wide-reaching should the program be? After all, it doesn’t make sense to pay for services your employees don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs can be broken down into four tiers of employee need, from which your organization’s return on investment (ROI) can also be measured.

Tier 1: Education

Tier I employees struggle with weight management problems but don’t need a health coach.  Instead, they may benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

How to measure ROI: utilization. Do employees click on the Web site? Do they return to the site regularly? Do people use the nurse line? Your program vendor should provide you detailed use stats.

Tier 2: Clinical supervision

If the employee has been diagnosed as obese — a body mass index (BMI) score over 30 is obese, over 35 is clinically obese — he or she would do better working with a health coach in a clinically supervised program.

Three keys to getting maximum results:

1. Periodically have participants rate their relationship with their health coaches. Not everyone clicks, so a change may be in order.
2. Coordinate your disease management care with your employee assistance program (EAP)services. Reason: Inability to control weight is often closely tied with mental health issues — and one can negatively affect the other. The more closely your EAP and obesity program managers work together, the higher the chance for success.
3. Beware of the fade-out effect. Many employees in weight-loss programs get off to a great start and then fall back into old habits. People should re-commit to the program after three sessions, four months and nine months.

To measure ROI, look at utlization, goal achievement and reduced presenteeism. Of course, presenteeism is notoriously difficult to measure with reliable dollar figures. So how can you overcome that problem?

• Start with employees’ salaries. Let’s suppose one participant earns $40,000 per year.
• Ask workers to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. For this example, let’s assume it averaged to 50%.
• Collect scores again six months and one year into the program and then multiply the difference by salary. The result is your estimated productivity ROI.

In the example above, if the employee earning $40,000 improves from 50% to 75% after one year, the productivity related ROI is $10,000.  

Tier 3: Medical management

At this level, the obese employee needs a higher level of care than a health coach can offer. The employee has chronic health conditions related to obesity — such as diabetes, high blood pressure, and/or sleep apnea — and needs a physician case manager. Specifically, the employee needs to set up regular visits with the doctor and create a treatment plan.

To measure ROI, start with the lower-tier criteria, then track quarterly and year differences in FMLA or paid absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4: Morbid obesity

At this level, the employee has been diagnosed as morbidly obese — BMI over 40 — and is considered a potential candidate for gastric bypass surgery.

ROI is measured through ongoing health claims as well as the previous criteria.

The best defense for management: staying on top of the trends. Here are three medical conditions that have been showing up with ever-increasing frequency in recent years. The conditions themselves aren’t disabling but increase employees’ risk of future long-term disability claims.

1. Metabolic syndrome

According to a Milliman Benefits study, four of the seven biggest U.S. insurers report an upswing in applicants with the condition, often tied to disabling heart attacks. Common risk factors include obesity, high cholesterol, diabetes and/or high blood pressure.

Every carrier considers metabolic syndrome a significant factor in raising an employee’s disability risk. This results in higher premiums, but early diagnosis and treatment (especially through disease management programs) can reduce the chance of future disability claims.

2. Obstructive sleep apnea (OSA)

Five of seven carriers have seen upticks in OSA cases. The condition can lead to chronic fatigue, mood and anxiety disorders and workplace or off-site accidents, among other issues.

Obese employees are at much higher risk of OSA than the general population. All seven insurers say OSA increases an employee’s disability risk.

3. Restless leg syndrome (RLS)

Four of seven carriers have seen RLS increases. Six of the seven insurers consider RLS a condition that increases disability risk. This is especially true for employees who work night shifts and/or desk jobs.

Cutting the risk

Best practices for cutting employees’ risks (and your long-term health and disability plan premiums) include:

• disease management programs, especially for obesity and diabetes
• preventive care – the aforementioned conditions, especially RLS, are most commonly recognized first by an employee’s primary-care physician, and
• employee education on proper prescription-drug use to keep conditions under control.

In fact,  according to an Institute of Medicine study, there’s an average of one medication error per hospitalized patient per day and an estimated 7,000 medication-errror related deaths each year. 

Even non-fatal drug errors in an outpatient or hospital setting can add as much as $5,800 to the bill. Who foots a big chunk of the estimated $3.5 billion in preventable costs: employers and patients.

While bad handwriting may be the most basic cause of these problems – only six percent of hospital prescriptions are written electronically and only three percent of hospitals maintain electronic patient records – the sheer volume and complexity of today’s medications compound the problem.

In the long term, hospitals hope to reduce the problem through the uniform use of electronic devices that check the medication against information contained on a patient’s I.D. bracelet. While the use of such systems has become more common since the mid-1990s, it’s still far from universal.

But technology is only part of the solution, anyway. Employee education, knowledge and activism in their own care is the still the frontline defense against medication errors. Remember: It’s not just hospitalized employees who are at risk:

• Four out of five American adults take at least one daily medication or dietary supplement and about 33% take five meds or more each day. Herbal remedies count, too, and can interact with other medications in unintended ways.
• Not even the savviest medical pros can track every possible med. Today, there more than 10,000 distinct prescription drugs and 300,000 over-the-counter meds on the market
• Usage and dosage instructions vary with each person’s age, medical history, weight, allergies and other risk factors.
• Numerous drugs intended for different purposes have similar-sounding names, spellings or come in similar-looking containers. Here’s a list of some of the most commonly confused medications in the U.S.

What can employers and workers do? Employers often make a point of teaching employees about generic drugs and encouraging them to ask their doctors if a generic is available. That’s fine, but relatively few companies take the even more important (and potentially cost-saving and even life-saving) step of teaching employees about the need for taking an active role in their own prescription and over-the-counter medication safety.

Experts say that by taking three relatively simple steps, an employee can cut his or her risk (and their dependents’ risks) by as much as 75%:

1. Keep a current list of the medications and supplements taken
2. Take the list along when going to the doctor and share the information any time a prescription is written
3. Ask questions about the prescription, find out what written prescriptions say and then check it for accuracy after it is filled by the pharmacy.

A large percentage of employees remain reluctant to take an active role in their own health care, and many do little or no research on the meds they take. Unfortunately, the expression “to err is human” very much applies to the prescription and dispensing of drugs — and both patients and health plan sponsors alike serve an important role in helping to cut the inherent risk.

Over the course of your career as a benefits manager, odds are that you’ll eventually run into an employee with a paid disability claim that doesn’t seem to be on the up and up.

On a nationwide basis, fraudulent long-term disability claims are a $5.5 billion drain on employers. The cost includes claim payouts, subsequent premium increases, lost productivity and staffing problems. The good news: There are legal ways to fight back.

Common red flags

None of the following factors automatically justify a full-scale investigation. But they add up. The more factors in place, the greater the likelihood of a false disability claim:

• The worker is a new hire and has a history of short-term employment
• He or she was recently demoted or clashed with a supervisor
• The employee is unusually aggressive about the claim (e.g., hires a lawyer as a first step) and/or
• The story about the cause or severity of the injury keeps changing.

According to experts, either of the first two factors in combination with either one or both of the latter two could provide cause to probe a little deeper into the claim.

Go through your carrier

What should you do if think you smell a rat? Alert your plan carrier about
your suspicions and let the insurer’s investigation department handle it.

The biggest mistake that employers make in these circumstances is to simply take matters into their own hands. Why? Because even if you uncover evidence of fraud, the information might not hold up in court.