Business Relations Program: Cost-Saving Measures

EVIDENCE OF YOUR TAX DOLLARS AT WORK ...

It’s OUR business to provide customized, no-cost services to YOUR business ... making your tax dollars show a healthy return on investment for the public vocational rehabilitation program.

Fast facts about the public vocational rehabilitation program 

VR is the “parent company” of the Business Relations program READI-Net, Resources for Employment and Disability Information.

The national statistics regarding the Return On Investment for the public Vocatinal Rehabiliation program follow:

  • 213,432 people rehabilitated into employment in 2004. 
  • Approximately 85 percent of VR staff are focused on serving the consumers, with only 15 percent focused on the administration of the program.
  • Since the inception of the public VR program, more than 14 million individuals with disabilities have acquired and maintained competitive employment with its support.
  • In 2003, these employed individuals earned approximately $3.5 billion in wages during their first year of work.
  • During that year, these new wage earners paid approximately:
    • $320 million in federal taxes
    • $95 million in state income tax
    • $520 million in SSA and Medicare
  • At that rate, they will pay back the cost of their rehabilitation in two to four years.
  • For the individuals served by VR who are Social Security recipients, there is a $6 return for every VR dollar invested.
  • This equated to a $470.3 million savings to the Social Security Trust Fund in FY 2004.
  • Federal funds invested in VR are paid back in less than 22 months.
  • Average savings in SSI and health care per rehabilitated VR consumer: $342,518. (Source: Council of State Administrators of Vocational Rehabilitation, 2006)

Click here for an Alabama example of ROI with one of the many business partners working with READI-Net.

 

MANAGING DISABILITY IN THE WORKPLACE

Unmanaged disability can cost companies millions.  Integrated disability management programs are proving to be some of the most cost-savings measures a company can implement.  Take a look at the facts.

Why focus on Disability Management in the Workplace?

Here are some employer concerns and costs:

  • Cutting cost of insurance and disability in the workplace
  • Current cost of managing disability is between 6 to 12 percent of payroll for all disability-related costs to a company

Direct cost factors:

  • Claims from disabling work-related injuries grew to $42.5 billion during 1998 and 2000 (Liberty Mutual, April 7, 2003)
    • Health insurance
    • Medical leave
    • Short-term and long-term disability
    • Workers compensation
    • Social Security costs
    • Miscellaneous accident coverage

Indirect Cost Factors:

  • Indirect cost of claims from disabling work-related injuries in 2000 was between $127 billion and $212 billion.
  • This is $3 to $5 of indirect cost per $1 of direct cost. (Liberty Mutual, April 2003)
    • Replacing workers
    • Lower initial production
    • Overtime costs
    • Higher temporary wages
    • Higher rates for accident insurance for replacement workers

Return on investment (R.O.I.)

  • $4  to $6 is saved for every dollar that is spent in disability-related costs (American Society of Safety Engineers, March 23, 2004)
  • Disability duration decreases and return-to-work rates increase (CIGNA, March 15, 2004)
  • Disability management = good human resource management

 

If you would like help managing disability costs in your workplace, connect with a local READI-Net business relations consultant.