Valuable time and energy lost taxing employers and employees
The rapidly aging population is one factor that usually tops the lists in discussions about why health care costs – and employers’ costs of providing health coverage to workers – are running rampant.
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But the graying of America is taking another, more indirect bite out of employers’ bottom lines: companies are losing billions of dollars each year because their employees are overwhelmed by caring for elderly parents and loved ones.
For instance, a report released in June by the Alzheimer’s Association says that American businesses lose roughly $36.5 billion on costs associated with employees caring for elderly family members with Alzheimer’s disease.
“Employers are hit pretty hard in a number of ways,” said Robert E. O’Toole, president of Dedham, Mass.-based Informed Decisions Inc., a private firm that specializes in elder-care planning for public and private employers.
In an article titled “The Growing Importance of Elder Care Benefits,” which appeared earlier this year in Compensation and Benefits Management magazine, O’Toole ticked off several negative effects that employees caring for senior family members can have on employers:
• Replacement costs for employees who leave because of care-giving responsibilities
• Absenteeism costs
• Costs related to workday disruptions
• Workers retiring sooner than they had planned, to care for an aging loved one
A report from the National Council on the Aging (NCOA) says that about a quarter of Americans provide hands-on care to a loved one, and nearly half of those said it has had a “significant impact” on their work life. The National Partnership for Women and Families estimates that by 2020, the demand for elder-care services likely will surpass demand for child care.
Industries that employ heavy concentrations of baby-boomers and women, such as health care, retail, and education, see more fallout from elder-care issues than others, because 40- and 50-something females are “most likely to take up the responsibility of caring for aging parents,” O’Toole said.
While absenteeism related to elder care can be roughly quantified, O’Toole uses a buzzword to describe an intangible drag on employers: “presenteeism.”
The term describes employees who show up to work, but whose stress levels are high and whose minds are elsewhere, causing performance to wane. They have burned through all their vacation time and sick leave – mostly while providing care to loved ones – and still must spend hours a day caring for an elderly parent or relative.
O’Toole says the biggest challenge facing working caregivers is not assuring the provision of good health care. For the most part, Medicare and supplemental insurance guarantees that elderly family members will have access to outpatient services, hospital stays and often prescription drugs.
But, O’Toole said, “None of that covers buying groceries or bathing or cooking meals,” he said.
Employers increasingly are offering benefits to help workers cope with the physical, emotional and financial distress of caring for a sick elderly parent or relative while working full time. Services typically are offered through employee-assistance programs or contracted out to private elder-care or “work/life” specialists.
The contract programs typically offer advice from social workers, nurses and other health-care professionals, either via a toll-free phone number or the Internet, 24 hours-a-day. Specialists can offer resource directories to help employees find appropriate nursing homes, counselors, adult day care, home-health providers and meals-on-wheels programs. Databases normally include out-of-state resources, which is needed to assist with the common conundrum of long-distance caregiving.
Most agencies offer services for as little as $1.50 to $2 per employee per month, O’Toole said.
Boston-based Fleet Bank has offered elder-care services to its employees for several years, and has been padding that program in recent years as demand from workers has grown, according to Fleet spokesman James Schepker.
Fleet contracts with an outside firm to give employees access to expert advice, 24 hours a day on a toll-free phone line. Employees can get information on a variety of thorny elder-care issues, such as finding housing alternatives for elderly relatives; managing Social Security payments and coping with a diagnosis of Alzheimer’s disease.
The banking giant also allows employees to open direct-care reimbursement accounts, which lets employees contribute up to $5,000 in pre-tax dollars annually to help cover costs such as adult day care or assisted living. Schepker said that roughly 700 Fleet employees have opened such accounts.
But the benefit most heavily used by Fleet employees facing elder-care duties is flexible work arrangements. The bank offers employees several options for spending more time on family matters, including a compressed work week, splitting a full-time job with another employee and in some instances working from home.
Ellyn Wolfe, Fleet’s director of Work/Life programs, said a growing number of workers are sandwiched by dual demands: raising their kids while also caring for a sick parent or relative. Wolfe said one co-worker keeps a flexible schedule at work to care for her elderly parents – and her 100-year old grandmother.
