GAO

United States General Accounting Office

Report to Congressional Requesters

January 2001 SSA DISABILITY

Other Programs May

Provide Lessons for

Improving

Return-to-Work

Efforts

GAO-01-153

Page 1 GAO-01-153 Improving Return-to-Work Efforts

Contents

Letter 3

Appendixes Appendix I: Comments From the Social Security Administration 44

Appendix II: GAO Contact and Staff Acknowledgments 48

Related GAO Products 49

Tables Table 1: Comparison of Eligibility Assessment Process Features of

U.S. Private Insurers and Other Countries With Those of SSA 15

Table 2: Medical Assessment: Tasks, Tools, and Methods 20

Table 3: Vocational Assessment and Assistance: Tasks, Tools, and

Methods 20

Table 4: Responsibilities and Qualifications of Staff Employed by

Private Disability Insurers to Assess and Enhance a

Claimant’s Work Potential 32

Table 5: Staff Assignment for Claims Management by Triage Category 34

Figure Figure 1: Private Disability Insurers’ Eligibility Assessment Process 16

Abbreviations

DDS disability determination service

DI Disability Insurance

SGA substantial gainful activity

SSA Social Security Administration

SSI Supplemental Security Income
Page 2 GAO-01-153 Improving Return-to-Work Efforts
Page 3 GAO-01-153 Improving Return-to-Work Efforts

United States General Accounting Office

Washington, D.C. 20548 Letr

January 12, 2001

The Honorable E. Clay Shaw, Jr.

Chairman

The Honorable Robert T. Matsui

Ranking Minority Member

Subcommittee on Social Security

Committee on Ways and Means

House of Representatives

The Honorable Benjamin L. Cardin

Ranking Minority Member

Subcommittee on Human Resources

Committee on Ways and Means

House of Representatives

The Honorable Nancy L. Johnson

House of Representatives

Each month, the Social Security Administration (SSA) pays nearly $6

billion in cash benefits to people with disabilities who are beneficiaries of

the Disability Insurance (DI) and Supplemental Security Income (SSI)

programs.1 The size of the working age beneficiary population has grown

significantly over the past 10 years, increasing by 65 percent to its current

size of 7.5 million. This growth has contributed to the DI trust fund’s

projected insolvency in 2023 and a significant increase in expenditures for

SSI benefits, which are financed by general revenues.2 Although

technological and medical advances and societal changes have increased

the potential for some people with disabilities to participate in the labor

force, fewer than one-half of 1 percent of DI beneficiaries, and about 1

percent of SSI beneficiaries, leave the rolls each year because they are

working. As we have reported in the past, the U.S. private sector and social

insurance systems of other countries are adjusting to this increased work

1

This figure is for 1999.

2

DI is funded by payroll taxes paid by workers and their employers into the Social Security

DI trust fund.
Page 4 GAO-01-153 Improving Return-to-Work Efforts

potential more quickly than SSA.3 Although at one time the common

business practice was to encourage someone with a disability to leave the

workforce, in recent years the private sector in this country and social

insurance systems overseas have been developing and implementing

strategies for helping people with disabilities to return to work as quickly

as possible.

We have testified on the practices of the private sector and other countries

for helping people with disabilities return to work and, at your request, are

now providing a report on these issues.4 We focused our work on three key

areas: (1) the eligibility assessment process, (2) work incentives, and (3)

staffing practices. In this report, we describe these three elements for three

U.S. private sector disability insurers and for three other countries’ social

insurance systems and compare the practices of both with those of the DI

and SSI programs. The DI program covers a broader population than the

private insurers, but employees covered under private disability insurance

generally have work experience that insures them for coverage under DI.

Although SSI beneficiaries, unlike DI beneficiaries, are not required to have

worked in covered employment to be eligible for benefits, we extended our

comparison to the SSI program because relatively large numbers of SSI

beneficiaries have also worked at some point, either prior to benefit receipt

or while on the disability rolls.5 Nonetheless, particular return-to-work

practices may not be the same for the two programs because of the

differences, beyond work history, in the beneficiary populations that each

program serves. For example, the DI beneficiary population is generally

3

See SSA Disability: Return-to-Work Strategies From Other Systems May Improve Federal

Programs (GAO/HEHS-96-133, July 11, 1996).

4

See SSA Disability: Other Programs May Provide Lessons for Improving Return-to-Work

Efforts (GAO/T-HEHS-00-151, July 13, 2000).

5

See Mary C. Daly, “Characteristics of SSI and DI Recipients in the Years Prior to Receiving

Benefits: Evidence From the PSID,” in Kalman Rupp and David C. Stapleton, eds., Growth in

Disability Benefits: Explanations and Policy Implications (Kalamazoo, Mich.: W.E. Upjohn

Institute for Employment Research, 1998), pp. 190-94. Daly found that about 30 percent of a

sample of SSI recipients reported having been employed during the 5 years prior to benefit

receipt. Daly defined employment as having worked 52 hours or more, or as having wage

earnings, in the previous year. See also L. Scott Muller, Charles G. Scott, and Barry V. Bye,

“Labor-Force Participation and Earnings of SSI Disability Recipients: A Pooled CrossSectional Times Series Approach to the Behavior of Individuals,” Social Security Bulletin,

Vol. 59, No. 1 (spring 1996). The authors found that, among individuals entering the SSI rolls

after 1976 and spending at least 1 full year in benefit status, nearly one-fourth had earnings

in at least 1 year while on the rolls. Average annual earnings for all SSI recipients who

worked, indexed to 1989 levels, were $2,075.
Page 5 GAO-01-153 Improving Return-to-Work Efforts

older and has a higher proportion of males and beneficiaries with a

musculoskeletal diagnosis, and a lower proportion of beneficiaries with a

mental impairment, than the SSI disabled beneficiary population of

working age adults.

To do this work, we conducted in-depth interviews and reviewed policy

documents and program data at three private sector disability insurers:

UNUMProvident, Hartford Life, and CIGNA.6 We also interviewed program

officials and other experts on the disability systems of Germany, Sweden,

and The Netherlands and reviewed policy documents and studies of these

programs. Our review of these disability systems updates and expands on

our previous work in this area.7 Although we were able to compare the

return-to-work practices of the different disability systems, we were unable

to obtain from the private insurers or other countries complete,

comparable data on the costs and benefits of their return-to-work

practices. We performed our work in accordance with generally accepted

government auditing standards between February and December 2000.

Results in Brief The disability eligibility assessment process of the U.S. private insurers and

the countries we reviewed focuses on returning people with disabilities to

work. The assessment process both evaluates a person’s potential to work

and assists those with work potential to return to the labor force. This

process of identifying and providing services intended to enhance a

person’s productive capacity occurs early after disability onset and

continues periodically throughout the duration of the claim. This ongoing

process is closely linked to a definition of disability that shifts over time

from less to more restrictive—that is, from an inability to perform one’s

own occupation to an inability to perform any occupation. Both the

definitional shift and the ongoing assessment process recognize the

possibility for improvement in an individual’s capacity to work through

6

Taken together, these three insurers have experience not only in long-term stand-alone

disability insurance, but also in integrating short- and long-term disability insurance with

workers’ compensation and, in one instance, with health care. These insurers are also

among the largest long-term disability insurers in the country, together covering about 52

percent of the long-term U.S. private disability insurance market in 1997. We focused our

analysis on the population of applicants and beneficiaries whose disabilities are of such

severity that these individuals would likely qualify for SSA’s disability benefits. In addition,

we focused our review on private insurers’ group disability insurance policies that contain

return-to-work incentives.

7

See GAO/HEHS-96-133, July 11, 1996.
Page 6 GAO-01-153 Improving Return-to-Work Efforts

early provision of supports and services, such as workplace adaptations or

training. In contrast, SSA does not incorporate efforts to return individuals

to work into its eligibility assessment process. SSA’s return-to-work efforts

occur only after the agency’s often lengthy process of determining whether

an individual meets its statutory definition of disability. Moreover, the

“either/or” nature of this definition encourages applicants to focus on their

inabilities by characterizing individuals as either able or unable to work.

Work incentives are an important feature of the strategy that the private

insurers and other countries we reviewed use to encourage and facilitate a

person’s return to work. These incentives include requirements for

obtaining appropriate medical treatment and participating in a return-towork program, if such a program would benefit the individual. To support

these requirements, these disability systems help the individual obtain the

appropriate medical care and provide financial incentives to promote

participation in rehabilitation, such as reimbursement for family care costs.

In contrast, although SSA’s claimants must follow medical treatment that a

provider has prescribed for them, they are not required to seek treatment

to be eligible for initial award or continuing receipt of SSA disability

benefits. Indeed, many disabled DI and SSI applicants and beneficiaries

may not have access to the appropriate medical care. Additionally,

rehabilitation in DI and SSI is optional and depends upon the beneficiary’s

motivation to pursue such services. Thus, a beneficiary who could benefit

from rehabilitation might not choose to seek it.
Page 7 GAO-01-153 Improving Return-to-Work Efforts

Appropriate staffing is a third key component of the return-to-work

strategy implemented by the private insurers and the countries we studied.

These disability systems have access to staff with a wide range of expertise

not only in making eligibility decisions, but also in providing return-to-work

assistance. The three private disability insurers told us that they select the

appropriate type and intensity of staff resources to return individuals with

work capacity to employment cost-effectively. For example, while the three

private insurers generally assign minimal staff resources to periodically

monitor the status of individuals who are unlikely to return to work, they

usually apply their most resource-intensive, multidisciplinary teams to

assist those who are assessed as being likely to work. In comparison, staff

who make eligibility decisions for the DI and SSI programs focus on

assessing eligibility of applicants to receive cash benefits, not on helping

them return to work. However, under the new Ticket to Work and Work

Incentives Improvement Act (Ticket to Work Act), SSA’s disabled

beneficiaries who choose to pursue rehabilitation are to be given a voucher

(or “ticket”) to gain access to specialists who can assist them in returning

to work.8

While the Ticket to Work Act and other initiatives are beginning to focus

more on returning DI and SSI beneficiaries to work, we believe that SSA is

not placing enough priority on enhancing the productive potential of its

disabled beneficiaries and needs to develop a comprehensive return-towork strategy. In commenting on a draft of this report, SSA agreed that the

return-to-work practices that other disability programs follow provide

useful information and that emphasis should be placed on helping

beneficiaries with disabilities return to work. But SSA disagreed on the

need to develop a comprehensive return-to-work strategy for its disability

programs, stating that it is already devoting substantial resources to return

to work. The agency also stated that changing the DI and SSI policies

discussed in the report would require new legislation, and that differences

between SSA’s programs and those of the other systems we reviewed might

limit the application of other systems’ practices to the DI and SSI programs.

With regard to these concerns, we believe that SSA’s return-to-work

initiatives do not constitute the comprehensive strategy necessary to

address fundamental program weaknesses and reorient the agency’s

policies and practices to focus on work while not jeopardizing benefits for

people who cannot work. Moreover, while some aspects of the current

disability programs are based in law, others are set forth in regulation; thus,

8

P.L. 106-170, Dec. 17, 1999.
Page 8 GAO-01-153 Improving Return-to-Work Efforts

important aspects of the programs could be modified by the agency

without legislation. Finally, the existence of differences between SSA’s

disability programs and those of the other systems we examined should not

be construed to imply that our federal programs have little to learn from

the approaches of these other systems. Indeed, although limited data exist

on the cost-effectiveness of the practices of other disability systems, the

initial return-to-work rates of the three private insurers show promise. SSA

should build on the experiences of other disability systems and the results

of the Ticket to Work demonstrations to identify the elements of a model

disability system and then determine the legislative and regulatory changes

needed to test and evaluate the effectiveness of these elements. Because

adopting a comprehensive strategy will require fundamental changes to the

underlying philosophy and direction of the DI and SSI programs, which are

embedded in both law and regulation, policymakers will need to carefully

weigh the implications of such changes.

Background DI and SSI are the two largest federal programs providing cash assistance

to people with disabilities. Established in 1956, DI is an insurance program

that provides monthly cash benefits to workers who are unable to work

because of severe long-term disability. Workers who have worked long

enough and recently enough are insured for coverage under the DI

program. After becoming disabled, individuals have a waiting period of 5

months before receiving cash benefits. In addition to cash assistance, DI

beneficiaries receive Medicare coverage after they have received cash

benefits for 24 months. Beneficiaries’ DI benefits convert to Social Security

retirement benefits when beneficiaries reach age 65. In 1999, 4.9 million

disabled workers received DI cash benefits totaling about $46.5 billion,

with average monthly cash benefits amounting to $755 per person.9

9

Included in the 4.9 million DI disabled workers are about 735,500 beneficiaries who were

also eligible for SSI disability benefits because of the low level of their income and

resources. In 1999, DI also paid about $4.9 billion in cash benefits to about 1.7 million

spouses and children of disabled workers.
Page 9 GAO-01-153 Improving Return-to-Work Efforts

SSI, created in 1972, is a means-tested income assistance program that

provides a financial safety net for disabled, blind, or aged individuals who

have low income and limited resources. Unlike the DI program, SSI has no

prior work requirement and no waiting period for cash or medical benefits.

Eligible SSI applicants generally begin receiving cash benefits immediately

upon entitlement and, in most cases, receipt of cash benefits makes them

eligible for Medicaid benefits. In 1999, about 2.6 million working age people

with disabilities received SSI benefits.10 In the same year, federal SSI cash

benefits paid to SSI beneficiaries with disabilities equaled $22.9 billion, and

average monthly federal SSI cash benefits amounted to about $364 per

person.11

The DI and SSI programs use the same statutory definition of disability. To

meet the definition of disability under these programs, an individual must

have a medically determinable physical or mental impairment that (1) has

lasted or is expected to last at least 1 year or to result in death and (2)

prevents the individual from engaging in substantial gainful activity (SGA).

Individuals are considered to be engaged in SGA if they have countable

earnings above a certain dollar level.12 Moreover, the definition specifies

that for a person to be determined to be disabled, the impairment must be

of such severity that the person not only is unable to do his or her previous

work but, considering his or her age, education, and work experience, is

unable to do any other kind of substantial work that exists in the national

economy. SSA contracts with state disability determination service (DDS)

agencies to determine whether applicants are disabled.

10The 2.6 million beneficiaries received federally administered SSI payments based on

disability. This number does not include disabled workers who were dually eligible for DI

and SSI benefits.

11The $22.9 billion in federal SSI cash benefits was paid to SSI disabled beneficiaries of all

ages, including working age adults aged 18 to 64, as well as disabled beneficiaries under age

18 and over age 65. These benefits were also paid to disabled workers dually eligible for DI

and SSI benefits. The $22.9 billion does not include SSI supplemental payments made by the

states.

12Regulations currently define SGA for both the DI and the SSI programs as employment that

produces countable earnings of more than $700 a month for nonblind disabled individuals.

The SGA level for DI blind individuals, set by statute and indexed to the annual wage index,

is currently defined as monthly countable earnings that average more than $1,170. SSA

deducts from gross earnings the cost of items a person needs in order to work and the value

of support a person needs on the job because of the impairment before deciding if a person

is working at the SGA level.
Page 10 GAO-01-153 Improving Return-to-Work Efforts

The DI and SSI programs offer various incentives that are intended to

encourage beneficiaries to work—and, potentially, to leave the rolls.13 For

example, the DI work incentives provide for a trial work period in which a

beneficiary may earn any amount for 9 months within a 60-month period

and still receive full cash benefits. After the trial work period, cash benefits

continue for 3 months and then are terminated completely if countable

earnings are greater than SGA. The SSI work incentives, among other

features, allow beneficiaries to earn more than the SGA level and retain

part of a cash benefit. As a beneficiary’s earnings increase, the SSI benefit

payment gradually decreases until earnings become too high to allow a

cash benefit.14

Despite these work incentives, however, few DI and SSI beneficiaries

return to work. Therefore, we have recommended in previous reports that

SSA place greater priority on helping disabled beneficiaries return to work.

For example, in 1996, we identified weaknesses in SSA’s return-to-work

efforts and recommended that SSA intervene earlier to foster a greater

emphasis on assisting disabled applicants and beneficiaries in returning to

the workforce.15 We reported that the disability determination process

encourages work incapacity because applicants have a strong incentive to

emphasize their limitations in order to qualify for benefits. In addition, we

observed that the often lengthy and cumbersome application process may

itself reinforce applicants’ perceptions of their inability to work.

SSA has recently begun to increase its emphasis on helping its DI and SSI

beneficiaries return to work. For example, SSA recently established the

Office of Employment Support Programs to promote the employment of

disabled beneficiaries. In addition, the Ticket to Work Act is expected to

enhance work opportunities for people with disabilities. For example, this

new act expanded the availability of health care services and created a

“Ticket to Work” voucher program that will allow beneficiaries a greater

choice of vocational rehabilitation and employment service providers. SSA

13See Social Security Disability: Improving Return-to-Work Outcomes Important, but TradeOffs and Challenges Exist (GAO/T-HEHS-97-186, July 23, 1997) for a more complete

explanation of DI and SSI work incentives.

14To calculate the monthly SSI benefit amount, SSA excludes $20 of a beneficiary’s monthly

general income, $65 of his or her monthly earned income, as well as $1 for every $2 of the

remaining monthly earnings.

15See GAO/HEHS-96-133, July 11, 1996, and SSA Disability: Program Redesign Necessary to

Encourage Return to Work (GAO/HEHS-96-62, Apr. 24, 1996).
Page 11 GAO-01-153 Improving Return-to-Work Efforts

has also funded partnership agreements with 12 states. These agreements

are intended to help the states develop services to increase the

employment of beneficiaries with disabilities.

Private Disability Insurance Employers may choose to sponsor private disability insurance plans for

employees either by self-insuring or by purchasing a plan through a private

disability insurer. These disability plans can provide short- or long-term

disability insurance coverage, or both, to replace income lost by employees

because of injuries and illnesses. The private insurers generally reduce the

disability benefit payments of individuals who receive both private

disability and DI benefits by the amount of the DI benefit payment. The

Department of Labor’s Bureau of Labor Statistics estimates that, of the

approximately 100 million employees who work in the private sector, only

a portion—about 36 percent—are covered by employer-sponsored shortterm disability insurance, and a smaller portion—about 26 percent—have

long-term coverage.16

16See Private Disability Insurance: Employer-Sponsored Plans (GAO/HEHS-00-18R, Nov. 5,

1999). Bureau of Labor Statistics estimates are for the 1996-97 period. These estimates

include part- and full-time employees. (Employees were classified as either full- or part-time

workers in accordance with their employers’ practices.) These estimates do not include

data on agricultural employees or disability provisions of defined benefit pension plans. (In

a defined benefit plan, the employee’s benefit at retirement can be specifically determined

using such factors as salary and number of years of service.) Data on short-term coverage

include state temporary disability insurance plans in New York, New Jersey, and Hawaii

funded, at least in part, by employee contributions. Data exclude such plans in California

and Rhode Island, where benefits are wholly financed by employees. The estimates cannot

be summed to calculate the total number of employees with private disability insurance

because some employees may have either short-term coverage or long-term coverage—or

both.
Page 12 GAO-01-153 Improving Return-to-Work Efforts

The characteristics of the portion of the U.S. working population that is

covered by employer-sponsored private disability insurance differ from

those of SSA’s covered population. For example, unlike SSA, private

insurers vary the employer’s premium cost on the basis of various risk

factors, such as the type of work and the general health of the workers.

Thus, employers in higher risk industries may choose not to purchase

private disability insurance for their workers because of the cost of

coverage. Moreover, in contrast to SSA, private insurers allow employers

who purchase their disability policies to vary coverage by type of

impairment or by class of employee. For example, because the disability

insurance industry generally charges much higher premiums for full mental

health coverage, employers in general limit coverage for mental

impairments to a maximum of 24 months.17 Employers may also choose to

provide long-term disability coverage for only their white collar employees,

rather than for all their employees.18

The private disability insurance industry, moreover, provides benefits to

many individuals who are not as severely disabled as the beneficiaries of

the DI and SSI programs. However, almost two-thirds of those receiving

private long-term disability benefits from the three private insurers we

reviewed also received DI benefits. This group of beneficiaries, in the cases

of the two insurers that provided us with comparable data, was composed

of a slightly higher proportion of female and older beneficiaries than the

overall DI population, and a lower proportion of female and younger

beneficiaries than the SSI disabled population. The three insurers reviewed

had a lower proportion of beneficiaries with mental impairments than the

DI and SSI disabled populations.

17For the three insurers we reviewed, the 24-month limitation on mental impairments does

not include time spent in a hospital or mental institution. Also, the three insurers vary in

their descriptions of the types of mental illness that are covered under this special

limitation. One insurer excludes such conditions as psychotic disorders and schizophrenia

from this limitation. In contrast, the SSA disability programs do not have time-limited

benefits for beneficiaries with mental impairments. In 1999, 26.8 percent of DI disabled

workers and 33.8 percent of SSI disabled individuals between the ages of 18 and 64 had

mental disorders other than mental retardation.

18White collar jobs fall into two categories: managerial and professional occupations and

technical, sales, and administrative support occupations.
Page 13 GAO-01-153 Improving Return-to-Work Efforts

Similar to the private sector organizations we assessed in our previous

work in this area, the three private disability insurers we reviewed for this

report have recognized the potential for reducing disability costs through

an increased focus on returning people with disabilities to productive

activity.19 To accomplish this comprehensive shift in orientation, these

insurers have begun developing and implementing strategies for helping

people with disabilities return to work as soon as possible, when

appropriate. Although the insurers expect a positive effect on return-towork outcomes from these strategies, it is too early to fully measure the

effect of these changes. In many cases, return-to-work processes have only

recently been implemented. Moreover, although the three private insurers

are now including return-to-work provisions in the standard disability

contracts that they are writing, a large number of employees are still

insured under prior contracts that lack these provisions. While only

partially indicative of the results of these strategies, the three insurers’

initial return-to-work rates are promising, showing greater success than

SSA’s DI program in returning the disabled to work. The three insurers

reported that, in 1999, between 2 and 3 percent of their long-term disability

beneficiaries who also received DI benefits either returned to work or were

terminated from the private sector disability benefit rolls because they

were assessed as having the capacity to work. However, the groups

covered by SSA and the private insurers are not fully comparable. Although

both groups of individuals receive DI benefits, as described previously, the

private insurers cover a selected portion of the U.S. working population

and, therefore, of DI beneficiaries.

Other Countries’ Disability

Systems

Like SSA’s disability programs, disability systems in Germany, Sweden, and

The Netherlands cover a broad population with a wide range of work

experiences, skills, and disabilities. However, these disability systems

operate in a somewhat different social and political context than DI and

SSI. For example, the availability of universal health insurance in these

countries ensures that the receipt of health insurance is not an issue in a

worker’s decision about whether to apply for benefits, participate in

rehabilitation, or attempt returning to work, as it can be in the United

States. In addition, disability systems in these countries offer short-term as

well as long-term benefits, which provides an important basis for

comprehensive disability case management.

19See GAO/HEHS-96-133, July 11, 1996.
Page 14 GAO-01-153 Improving Return-to-Work Efforts

The social insurance disability programs in these countries have invested in

return-to-work efforts and have implemented practices similar to those in

the U.S. private sector. While the German social insurance system has had a

long-standing focus on the goal of “rehabilitation before pension,” the

reorientation of Sweden and The Netherlands toward a return-to-work

focus has occurred mostly within the past decade. Some limited studies

and data indicate positive results from the return-to-work approach in

these disability insurance systems.20

Return-to-Work Efforts

Are Integral to

Eligibility Process in

Selected Private and

Foreign Systems

In the disability systems of the private disability insurers and the countries

we reviewed, identifying and providing services intended to enhance the

claimants’ capacity to work are central to the process of deciding eligibility

for benefits.21 To enable claimants to return to work as quickly as possible,

these disability systems begin assessing each claimant’s potential to rejoin

the labor force shortly after disability onset. Further, these systems

continue to periodically monitor work potential and provide return-to-work

assistance to claimants as needed throughout the duration of the claim.

This ongoing process is closely linked to a definition of disability that shifts

over time from less to more restrictive—that is, from an inability to

perform one’s own occupation to an inability to perform any occupation.

Both the definitional shift and the ongoing assessment process recognize

the possibility for improvement in an individual’s capacity to work. In

contrast to the efforts of the private insurers and other countries we

reviewed, the efforts that SSA makes to return claimants to work occur

only after an often lengthy review of eligibility. (See table 1.)

20For example, a 1990-92 study of certain return-to-work practices used by Sweden’s social

insurance offices concluded that social insurance costs had been reduced by returning

people to the workplace sooner. Practices assessed included the social insurance offices’

early screening and contact with disabled individuals.

21Throughout this report, we use the term “claimant” to refer to both a person who submits a

claim for disability insurance and a person who receives disability benefits for the lifetime

of a claim.
Page 15 GAO-01-153 Improving Return-to-Work Efforts

Table 1: Comparison of Eligibility Assessment Process Features of U.S. Private

Insurers and Other Countries With Those of SSA

Private Insurers Incorporate

Return-to-Work Efforts

From the Beginning of the

Assessment Process

The three private insurers we observed incorporate return-to-work

considerations early in the assessment process to assist claimants in their

recovery and in returning to work as soon as possible. With the initial

reporting of a disability claim, these insurers immediately set up the

expectation that claimants with the potential to do so will return to work.

The insurers’ process for assessing and enhancing a claimant’s ability to

work is illustrated in figure 1.

Process

feature

Private insurers and other

countries SSA

Disability

definition

Definition of disability shifts over a

specified time period from less to

more restrictive, allowing a

transitional period of eligibility

under a less restrictive definition

for providing financial and other

work assistance, such as

retraining. This transitional period

recognizes the possibility of

improvement in an individual’s

capacity to work.

“Either/or” definition characterizes

individuals as either unable to

work or having the capacity to

work.

Early

intervention

Intervention occurs soon after

disability onset to identify returnto-work needs.

There is a long delay in providing

services because only individuals

who have been awarded

benefits—following an often

lengthy eligibility assessment

process—are eligible for return-towork services.

Ongoing

assessment of

work potential

Work capacity is periodically

monitored and reassessed,

focusing on returning those who

can work to the labor force.

There is no integration of returnto-work considerations into the

eligibility assessment process.
Page 16 GAO-01-153 Improving Return-to-Work Efforts

Figure 1: Private Disability Insurers’ Eligibility Assessment Process
Page 17 GAO-01-153 Improving Return-to-Work Efforts

After receiving a claim, the private insurers’ assessment process begins

with determining whether the claimant meets the initial definition of

disability. In general, for the three private sector insurers we studied,

claimants are considered disabled when, because of injury or sickness,

they are limited in performing the essential duties of their own occupation

and they earn less than 60 to 80 percent of their predisability earnings,

depending upon the particular insurer.22 As part of determining whether the

claimant meets this definition, the insurers compare the claimant’s

capabilities and limitations with the demands of his or her own occupation

and identify and pursue possible opportunities for accommodation—

including alternative jobs or job modifications—that would allow a quick

and safe return to work. A claimant may receive benefits under this

definition of disability for up to 2 years.23

As part of the process of assessing eligibility according to the “own

occupation” definition, insurers directly contact the claimant, the treating

physician, and the employer to collect medical and vocational information

and initiate return-to-work efforts, as needed. Insurers’ contacts with the

claimant’s treating physician are aimed at ensuring that the claimant has an

appropriate treatment plan focused, in many cases, on timely recovery and

return to work. Similarly, insurers use early contact with employers to

encourage them to provide workplace accommodations for claimants with

the capacity to work.

22The private insurers generally define one’s “own occupation” as the occupation a person is

routinely performing at onset of disability. They generally assess how the claimant’s own

occupation is performed in the national economy, rather than how the work is performed

for a specific employer or at a specific location. Moreover, two of the insurers have

expanded their “own occupation” definition of disability to include a reasonable alternative

position. These two insurers require that a claimant who is judged able to do so accept a

reasonable alternative position—a job in the same general location as that offered by the

claimant’s current employer—or risk losing cash benefits. The claimant must be qualified to

perform the work of this alternative position—which must pay the claimant more than 60 to

80 percent of predisability earnings, depending upon the insurer—given his or her

education, training, or experience.

23Our review of group disability insurance policies focused on those with an “own

occupation” definition of disability that changes to an “any occupation” definition after 2

years.
Page 18 GAO-01-153 Improving Return-to-Work Efforts

If the insurers find the claimant initially unable to return to his or her own

occupation, they provide cash benefits and continue to assess the claimant

to determine if he or she has any work potential. For those with work

potential, the insurers focus on return to work before the end of the 2-year

period, when, for all the private insurers we studied, the definition of

disability becomes more restrictive: after 2 years, the definition shifts from

an inability to perform one’s own occupation to an inability to perform any

occupation for which the claimant is qualified by education, training, or

experience. Claimants initially found eligible for benefits may be found

ineligible under the more restrictive definition.24

The private insurers’ shift from a less to a more restrictive disability

definition after 2 years reflects the changing nature of disability and allows

a transitional period for insurers to provide financial and other assistance,

as needed, to help claimants with work potential return to the workforce.

During this 2-year period, the insurer attempts to determine the best

strategy for managing the claim. Such strategies can include, for example,

helping plan medical care or providing vocational services to help

claimants acquire new skills, adapt to assistive devices to increase

functioning, or find new positions. For those requiring vocational

intervention to return to work, the insurers develop an individualized

return-to-work plan, as needed. Basing the continuing receipt of benefits

upon a more restrictive definition after 2 years provides the insurer with

leverage to encourage the claimant to participate in a rehabilitation and

return-to-work program. Indeed, the insurers told us they find that

claimants tend to increase their efforts to return to work as they near the

end of the 2-year period.

If the insurer initially determines that the claimant has no work potential, it

regularly monitors the claimant’s condition for changes that could increase

the potential to work and reassesses after 2 years the claimant’s eligibility

under the more restrictive definition of disability. The insurer continues to

look for opportunities to assist claimants who qualify under this definition

of disability in returning to work. Such opportunities may occur, for

24The three private insurers generally use the same “own occupation” definition for shortand long-term disability benefits. However, in the case of long-term benefits, the definition

shifts to the “any occupation” definition after 2 years. When applying the “any occupation”

definition, these private insurers generally try to identify several occupations that exist

locally that could provide a sufficient salary for the claimant. However, the insurers are

obligated only to identify occupations with a sufficient salary in the national economy and

not to find specific job openings or place the claimant in a new position.
Page 19 GAO-01-153 Improving Return-to-Work Efforts

example, when changes in medical technology—such as new treatments

for cancer or AIDS—may enable claimants to work, or when claimants are

motivated to work. To illustrate, one insurer told us of a 57-year-old,

college-educated manager who sustained severe injuries, including the

amputation of a leg, as the result of a car accident. The private insurer

initially found the claimant unable to perform any occupation and awarded

him private disability benefits. (SSA, under its own eligibility determination

process, also awarded the claimant DI benefits.) However, because the

claimant wanted to work, the private insurer, employer, and claimant

collaborated in developing and implementing a return-to-work plan. After 1

month of computer training, the claimant returned to a new position with

the prior employer at his predisability salary.

The private insurers that we reviewed told us that, throughout the duration

of the claim, they tailor the assessment of work potential and development

of a return-to-work plan to the specific situation of each individual

claimant. To do this, disability insurers use a wide variety of tools and

methods when needed. Some of these tools, as shown in tables 2 and 3, are

used to help ensure that medical and vocational information is complete

and as objective as possible. For example, insurers consult medical staff

and other resources to evaluate whether the treating physician’s diagnosis

and the expected duration of the disability are in line with the claimant’s

reported symptoms and test results. Insurers may also use an independent

medical examination or a test of basic skills, interests, and aptitudes to

clarify the medical or vocational limitations and capabilities of a claimant.

In addition, insurers identify transferable skills to compare the claimant’s

capabilities and limitations with the demands of the claimant’s own

occupation. This method is also used to help identify other suitable

occupations and the specific skills needed for these new occupations when

the claimant’s limitations prevent him or her from returning to a prior

occupation. Included in these tools and methods are services to help the

claimant return to work, such as job placement, job modification, and

retraining.
Page 20 GAO-01-153 Improving Return-to-Work Efforts

Table 2: Medical Assessment: Tasks, Tools, and Methods

Table 3: Vocational Assessment and Assistance: Tasks, Tools, and Methods

Task Tools and methods

Assess the diagnosis, treatment, and duration of the

impairment and begin developing a treatment plan focused on

returning the claimant to work promptly and safely.

Consultation of medical staff and other resources, including current

medical guidelines describing symptoms, expected results from

diagnostic tests, expected duration of disability, and treatment

Assess the claimant’s cognitive skills. Standardized mental tests

Validate the treating physician’s assessment of the

impairment’s effect on the claimant’s ability to work and the

most appropriate treatment and accommodation.

Review of the claimant’s file, generally by a nurse or a physician who is

not the claimant’s treating physician

Verify the diagnosis, level of functioning, and appropriateness

of treatment.

Independent medical examination of the claimant by a contracted

physician

Evaluate the claimant’s ability to function, determine needed

assistance, and help the claimant develop an appropriate

treatment plan with the physician.

Home visits by a field nurse or investigator or accompanied doctor visits

Assess the claim’s validity. Home visits and interviews with neighbors or others who have

knowledge of the claimant’s activities

Task Tools and methods

Identify transferable skills, validate restrictions on and

capabilities for performing an occupation, and identify other

suitable occupations and retraining programs.

• Test basic skills, such as reading or math.

• Determine interests and aptitudes.

• Evaluate functional capacities associated with an occupation,

such as lifting, walking, and following directions.

• Compare functional capacities, work history, education, and skills

with the demands of an occupation.

Enhance work capabilities and help develop job-seeking skills. • Provide resume preparation, help develop job-seeking skills, and

help with job placement.

• Assist in obtaining physical, occupational, or speech therapy and

access to employee assistance, support groups, or state agency

vocational rehabilitation or other community services.

• Identify and fund on-the-job training or other educational courses.

Assess ability to perform own or any occupation, assess

potential for accommodation, and determine whether sufficient

salary is offered locally or nationally for a suitable occupation.

• Observe and analyze the essential duties of the claimant’s own

occupation, another occupation for the same employer, or an

occupation of a prospective employer.

• Determine the general availability and salary range of specified

occupations.

• Identify for a specified occupation the potential employers and

related job descriptions, salary range, and openings.

Reaccustom claimant to a full work schedule and enable

claimant to overcome impairment and return to work.

• Provide work opportunities for the claimant to gradually resume

his or her job duties.

• Procure devices to assist with work or otherwise help to modify

the job.
Page 21 GAO-01-153 Improving Return-to-Work Efforts

Other Countries Also

Provide Return-to-Work

Assistance Early After

Disability Onset and

Throughout the Assessment

Process

The three countries we studied also begin assessing return-to-work needs

soon after the onset of a disabling condition and integrate return-to-work

assistance that is tailored to meet individual needs throughout the

assessment process. These countries also provide short-term benefits on

the basis of a person’s inability to perform his or her current job because of

illness or injury. These short-term disability benefits—which may be

granted for a year or more—are similar to the private insurers’ provision of

benefits during the 2-year “own occupation” period of disability in that they

provide a transitional period for assessing an individual’s work potential

and providing treatment and rehabilitation.

For example, German laws and policies require that all applicants for

disability benefits be evaluated for rehabilitation and return to work.

Consistent with the principle that intervention should occur at the earliest

possible stage of disability to minimize the degree and effect of the

impairment, program officials told us that intervention in Germany often

begins when the health insurance agency urges a disabled worker receiving

short-term benefits to apply for medical rehabilitation. In addition, they

said that vocational counselors often discuss rehabilitation and return-towork plans with disabled workers while they are still in the hospital. The

social insurance office then evaluates the person’s capacity to work and, if

necessary, refers the applicant to vocational rehabilitation or other types of

return-to-work services and assistance. These return-to-work measures

may include assistance in retaining or obtaining a job or in selecting an

occupation. They may also involve providing basic training or retraining to

prepare for an occupation and developing workplace accommodations. As

long as the person continues to receive short-term disability benefits, the

social insurance office monitors the case and periodically reassesses the

person’s work capacity and need for return-to-work assistance, according

to program officials. The office awards long-term disability benefits,

officials said, only after it determines that a person’s earning capacity

cannot be restored through return-to-work interventions.

Under Swedish laws and policies, both the private and public sectors are

responsible for the early identification of candidates for rehabilitation and

return to work. After an employee has been on sick leave for 4 weeks,

employers are responsible for determining whether the employee needs

some type of rehabilitation and are required to report this information to

the social insurance office. Social insurance offices closely monitor the use

of short-term benefits and intervene when employers disregard their early
Page 22 GAO-01-153 Improving Return-to-Work Efforts

intervention responsibilities, program officials told us.25 The social

insurance office then begins the process of determining whether the person

will need vocational rehabilitation to return to work. The office arranges

for an assessment of the disabled employee’s rehabilitation needs and

works with the employer and employee to develop a rehabilitation plan.

Rehabilitation in Sweden is not meant to be a lengthy process, but rather a

short, intensive period of medical services and vocational training to help

the individual return to work as soon as possible. As in Germany, the social

insurance offices in Sweden periodically monitor and reassess the

rehabilitation needs of individuals receiving short-term disability benefits

and, after the first year of benefits, consider granting long-term benefits if

the person’s rehabilitation potential has not improved, program officials

explained.

In The Netherlands, the employer has had increasing responsibility for

efforts to return the employee to his or her current job or a comparable job

within the company since the mid-1990s. This shift of responsibility from

the public to the private sector is intended to encourage greater

responsibility on the part of employers in the prevention and prompt

amelioration of employee health impairments. Under this policy, within

about 3 months of the onset of the disability, the employer must submit to

the social insurance agency a preliminary plan to return the disabled

worker to the workforce. A final plan must be submitted within about 9

months. If the employer determines that the disabled worker cannot return

to the workplace, or if the disabled worker has not returned to work after 1

year of receiving short-term benefits, the social insurance agency assesses

the person’s condition to determine eligibility for long-term disability

benefits. The assessment involves evaluations of the applicant’s physical

and mental capabilities, which are then matched against different

occupations to determine whether the person is capable of performing any

work.

25Social insurance offices in Sweden have no mechanisms or sanctions to force employers to

comply with their rehabilitation responsibilities. We reported in 1996 that, according to

social insurance office surveys, employers do not arrange for rehabilitation examinations in

about 40 to 50 percent of the cases.
Page 23 GAO-01-153 Improving Return-to-Work Efforts

SSA Does Not Incorporate

Return-to-Work Efforts Into

Its Eligibility Assessment

Process

Unlike the private sector and foreign countries, SSA does not integrate

efforts to return individuals to work into its eligibility assessment

process.26 To be considered eligible for long-term cash benefits, applicants

are characterized as either having the capacity to work or being unable to

work, according to the Social Security Act’s definition of disability. But this

dichotomous choice does not recognize that many people with disabilities

fall on a continuum between being able to work full-time and being unable

to work at all. These individuals may have a variety of needs for shorterterm supports and services other than permanent cash payments to help

them make the transition to the workforce, such as assistive devices and

medical treatment. Yet, to obtain any services through DI and SSI,

individuals who might have been able to remain at or make the transition to

work with shorter-term services have no choice but to emphasize their

limitations and de-emphasize any work capacity in order to establish their

inability to work. In other words, eligibility for noncash services that are

needed in order to work is, paradoxically, linked to proving one’s inability

to work. The act’s definition of disability—under which a person is unable

to do any substantial work in the national economy—is comparable to the

private sector’s most restrictive definition.

26There are also distinct differences between the methods used by SSA and the private

insurers to determine a level of earnings beyond which an individual no longer qualifies for

benefits. SSA regulations, on one hand, apply to both the DI and the SSI programs a

standard level of countable monthly income for all people other than the blind (currently

$700), regardless of predisability earnings. In contrast, the private insurers we studied

establish an individualized level that is a proportion of each person’s predisability earnings.
Page 24 GAO-01-153 Improving Return-to-Work Efforts

In recent years, SSA has piloted numerous initiatives to redesign and

thereby improve its disability determination process. But while an

evaluation recently recommended that the agency “create an awareness

and attitudinal change to accept employment support as a core SSA

mission,” the agency has not yet integrated return-to-work considerations

into its efforts to redesign its disability determination process.27 Moreover,

the recently enacted Ticket to Work Act was intended to increase

beneficiary access to vocational services but does not change the point in

the process at which beneficiaries may receive assistance. Under the Ticket

to Work Act, only those individuals who have met the Social Security Act’s

definition of disability and are approved for benefits will receive a ticket

entitling them to receive return-to-work services. Because SSA’s eligibility

determination process can take up to 18 months or longer for individuals

who are initially denied benefits and who are then deemed eligible on

appeal, there can be a long delay in receiving services. Since many

applicants have been unemployed before applying for benefits and remain

unemployed during the eligibility determination process, their skills, work

habits, and motivation to work are likely to deteriorate during this wait.28

However, the Ticket to Work Act authorizes SSA to carry out a

demonstration project to test the advantages and disadvantages of earlier

referral of DI applicants and beneficiaries for rehabilitation.29 SSA may also

gain additional insights into early intervention approaches for both DI and

SSI through its funding of demonstration projects in 12 states.30

27SSA, Employment Support Concept Development Plan (Baltimore, Md.: SSA, Apr. 12,

1999).

28See GAO/HEHS-96-62, Apr. 24, 1996.

29SSA has not yet designed such a project, and it is unclear how early SSA will be intervening

after onset of disability in this demonstration.

30For example, one state is testing the provision of short-term vocational services to DI and

SSI applicants with recent work histories, with an emphasis on early intervention and quick

employment.
Page 25 GAO-01-153 Improving Return-to-Work Efforts

Other Systems Provide

Incentives for

Claimants and

Employers That

Encourage and

Facilitate Return to

Work

To facilitate return to work, the insurers and the countries we studied

employ incentives both for claimants to participate in vocational activities

and receive appropriate medical treatment, and for employers to

accommodate claimants. Insurers and the countries we studied require

claimants who could benefit from vocational rehabilitation to participate in

an individualized return-to-work program. They also provide financial

incentives to promote claimants’ efforts to become rehabilitated and return

to work. To better ensure that medical needs are met, the insurers and the

countries we studied require that claimants receive appropriate medical

treatment and assist them in obtaining this treatment. In addition, they

provide financial incentives to employers to encourage them to provide

work opportunities for claimants. Although these practices are common to

the private sector insurers and the countries we examined, limited data

exist to determine whether they yield positive outcomes. In contrast to the

practices of other systems, the Ticket to Work Act makes participating in

rehabilitation and return-to-work services voluntary for beneficiaries. In

addition, under law and SSA regulations, although SSA’s claimants must

follow medical treatment that has been prescribed for them, they are not

required to seek treatment as a prerequisite for award or continuing receipt

of benefits. Moreover, access to medical treatment may be limited for many

DI and SI applicants and beneficiaries, whose medical costs may not be

covered.

Private Insurers Offer

Incentives to Claimants and

Employers to Promote

Return to Work

The three private insurers we reviewed require claimants who could

benefit from vocational rehabilitation to participate in a customized

rehabilitation program or risk loss of benefits. As part of this program, a

return-to-work plan for each claimant can include, for example, adaptive

equipment, modifications to the work site, or other accommodations.

These private insurers mandate the participation of claimants whom they

believe could benefit from rehabilitation, because they believe that

voluntary compliance has not encouraged sufficient claimant participation

in these plans.31

These insurers also make special financial incentives available, as

appropriate, to claimants who participate in rehabilitation programs. For

31Although claimants may be involved in the development of the individualized

rehabilitation plans, the insurers make the final decision about the types of rehabilitation

services claimants will receive.
Page 26 GAO-01-153 Improving Return-to-Work Efforts

example, one insurer told us that claimants receive an additional benefit

equal to 10 percent of their disability payment for participating in

rehabilitation. The insurer caps these additional benefits at $1,000 a month.

In addition, the insurers may defray costs associated with rehabilitation,

such as child care expenses. To this end, one insurer reported that it may

pay $250 a month per child, up to $1,000 per month.

In addition, the insurers told us that they encourage rehabilitation and

return to work by allowing claimants who work to supplement their

disability benefit payments with earned income.32 During the first 12 or 24

months of receiving benefits, depending upon the particular insurer,

claimants who are able to work can do so to supplement their benefit

payment and thereby receive total income of up to 100 percent of

predisability earnings.33 After this period, if the claimant is still working,

the insurers decrease the benefit amount so that the total income a

claimant is allowed to retain is less than 100 percent of predisability

income.

However, when a private insurer determines that a claimant is able, but

unwilling, to work, the insurer may reduce or terminate the claimant’s

benefits. To encourage claimants to work to the extent they can, even if

only part-time, two of the insurers told us they may reduce a claimant’s

benefit by the amount the claimant would have earned if he or she had

worked to maximum capacity.34 The other insurer may reduce a claimant’s

monthly benefit by the amount that the claimant could have earned if he or

she had not refused a reasonable job offer—that is, a job that was

consistent with the claimant’s background, education, and training.

Claimants’ benefits may also be terminated if claimants refuse to accept a

32The private disability insurers we reviewed told us that their benefits generally replace 60

percent of predisability earnings, depending upon the insurer.

33To illustrate, assume that Ms. Jones is a claimant with predisability earnings of $1,000 per

month and an insurance policy that replaces 60 percent of her predisability earnings. She is

currently not working. Under this scenario, her income would be limited to $600 per month

in disability benefits. However, if she returned to work, even part-time, she would have the

opportunity to increase her total income to 100 percent of her predisability earnings or, in

this instance, $1,000. If she returned to work and earned $500 per month, the insurer would

reduce her benefit payment from $600 to $500 per month, so that her combined earnings and

benefit payment would provide a total monthly income equal to her predisability income of

$1,000.

34One insurer uses the claimant’s physician or three independent experts qualified to

evaluate the claimant’s condition to determine a claimant’s maximum capacity to work.
Page 27 GAO-01-153 Improving Return-to-Work Efforts

reasonable accommodation that would enable them to work. For example,

if a claimant with impaired vision refuses the offer of a large-screen

computer terminal that would enable the claimant to work, the insurer can

terminate his or her benefits.

Since medical improvement or recovery can also enhance claimants’ ability

to work, the private insurers we studied not only require, but also help,

claimants to obtain appropriate medical treatment. To maximize medical

improvement, these private insurers require that the claimant’s physician

be qualified to treat the particular impairment. Additionally, two insurers

require that treatment be provided in conformance with medical standards

for treatment type and frequency. Moreover, the insurers’ medical staff

work with the treating physician as needed to ensure that the claimant has

an appropriate treatment plan. The insurers told us they may also provide

funding for those who cannot otherwise afford treatment.

The three private sector insurers we studied may also provide financial

incentives to employers to encourage them to provide work opportunities

for claimants. By offering lower insurance premiums to employers and

paying for accommodations, these private insurers encourage employers to

become partners in returning disabled workers to productive employment.

For example, to encourage employers to adopt a disability policy with

return-to-work incentives, the three insurers offer employers a discounted

insurance premium: if their disability caseload declines to the level

expected for those companies that assist claimants in returning to work,

the employers may continue to pay the discounted premium amount. These

insurers also fund accommodations, as needed, for disabled workers at the

employer’s work site.35

35Educating employers about the size and extent of disability costs is an important element

in motivating employers to promote efforts to return claimants to work. For example, one of

the private insurers we reviewed educates employers about the direct and indirect costs of

not controlling lost time associated with disability, which this insurer estimated to amount

to 4 to 6 percent of an employer’s payroll.
Page 28 GAO-01-153 Improving Return-to-Work Efforts

Other Countries Also

Provide Incentives to

Claimants and Employers to

Encourage Return to Work

In Germany and Sweden, individuals may also be denied benefits for not

participating in rehabilitation when it is recommended by the social

insurance offices. Both these countries, as well as The Netherlands, also

provide financial incentives to encourage participation in rehabilitation.

For example, they provide supplementary benefits to cover rehabilitationrelated expenses, such as transportation and housing costs and the cost of

educational courses, books, and study aids.36 Germany and Sweden also

offer transitional work opportunities that enable people with disabilities to

return to work part-time while earning disability benefits. These individuals

can gradually increase their daily work hours, and thus their earnings, until

they reach their maximum work capacity, with a corresponding decrease in

benefits.37 Similarly, The Netherlands provides a supplemental wage to

beneficiaries who work, allowing them to earn a wage equal to their

predisability earnings. The countries we studied also provide rehabilitation

services and medical treatment to disabled individuals, and social

insurance offices in Germany and Sweden may terminate the disability

benefits of individuals who refuse to follow medical recommendations.

In addition, Germany, Sweden, and The Netherlands provide financial

assistance to employers for the purchase of workplace accommodations

needed by disabled employees. For example, such assistance may pay for

technical aids, special staff or personal assistants to help a disabled worker

perform various work functions, or adaptations of the work environment to

meet the special needs of a disabled worker. These countries also offer

financial incentives for employing disabled individuals by subsidizing the

wages that employers pay them. Wage subsidies are provided for a timelimited period of 3 to 4 years, with the amount of the subsidy declining each

year.38 Furthermore, in The Netherlands, employers have an additional

incentive to assist employees in returning to work because the employers’

contributions to the disability insurance fund are partially determined by

the number of their employees who became disabled in the prior year.

36For example, Sweden provides grants to subsidize the purchase or modification of a

vehicle if it is considered necessary for vocational training or for traveling to work.

37In Sweden, individuals with reduced work capacity may work full-time and still take part

in the transitional work program.

38In Sweden, wage subsidies may be maintained at the same level and extended beyond the

4-year period if authorities determine it is appropriate.
Page 29 GAO-01-153 Improving Return-to-Work Efforts

SSA’s Return-to-Work

Incentives Are More Limited

Than Those Used in Other

Systems

In contrast to the practices of the private sector and the countries we

studied, SSA’s disability programs do not require rehabilitation for

beneficiaries, regardless of their capacity to work. Instead, the recently

enacted Ticket to Work Act establishes a voluntary system that depends

upon the beneficiary’s motivation to pursue rehabilitation services. Thus, a

beneficiary who could benefit from rehabilitation might not choose to seek

such services. Further, in contrast to the private sector, the Social Security

Act does not require that an individual work to his or her maximum

capacity, which may act as a disincentive to work. In particular, DI

beneficiaries with low earnings may find it more financially advantageous

to periodically stop working, or work part-time and continue to receive

disability payments, than to earn more than SSA’s limit of $700 a month in

countable income and lose all cash benefits after completing a trial work

period. In recognition of the potential work disincentive from this all-ornothing benefit structure, the Ticket to Work Act requires SSA to conduct

demonstration projects under which DI benefits are reduced by $1 for each

$2 of a beneficiary’s earnings above a level determined by SSA. Such a

phased reduction in benefits is currently used in the SSI program, in which

benefits are reduced by $1 for each $2 in earnings above the beneficiary’s

first $65 in monthly earnings and $20 in monthly general income.

The DI and SSI programs also differ from the private sector and the

countries we studied in their requirements for medical treatment. The

Social Security Act, along with SSA regulations, requires that benefits be

denied when an individual fails, without good cause, to follow treatment

prescribed by his or her physician.39 However, if an applicant is not being

treated by a physician, SSA is still required to assess his or her eligibility for

benefits. If an applicant qualifies, SSA is required to award benefits, even if

the applicant would not qualify for benefits if following treatment

prescribed by a physician. And unless medical treatment is prescribed, it is

not a prerequisite for continued receipt of benefits once they have been

awarded.

3942 U.S.C. secs. 423(f) and 1382c(a), and 20 C.F.R. secs. 404.1530, 404.1594(e)(4), 416.930,

and 416.994(b)(4)(iv). For benefits to be denied, treatment must be prescribed by the

individual’s treating physician (the licensed physician who attends to an individual’s medical

needs). When an individual has no attending physician, the treating physician is the hospital

or clinic where the individual goes for medical care.
Page 30 GAO-01-153 Improving Return-to-Work Efforts

Indeed, SSA found in 1999 that some beneficiaries with affective disorders

were receiving no medical treatment. Affective disorders are the primary

diagnosis of about one in every nine DI beneficiaries, according to SSA.

This diagnosis is characterized by a disturbance in mood—for example,

depression, mania, or both—and includes such diagnoses as major

depressive disorder and bipolar disorder. In addition, SSA found that many

beneficiaries with affective disorders who were receiving treatment were

not being treated by mental health professionals. Research cited by SSA

suggests that as many as 60 percent of affective disorder cases can be

controlled with appropriate treatment.40 SSA believes that providing access

to the right medical treatment for DI beneficiaries with affective disorders

could help them return to work and has recently begun a demonstration

project to test this assumption.41 Nevertheless, access to medical treatment

may be limited for many DI and SSI applicants and beneficiaries, for whom

medical costs may not be covered.42

In addition, SSA does not have the legal authority to use financial

incentives to encourage employers to assist those with disabilities to return

to work, thus limiting the agency’s ability to influence employers. However,

SSA is currently funding demonstration projects in 12 states to develop

ways to increase employment of beneficiaries and other people with

disabilities and is looking to employers for help. For example, the goals of

one state project are to solicit employer views on barriers to hiring

beneficiaries and to identify strategies for, and educate employers about,

increasing employment opportunities for beneficiaries. In addition, the

federal government provides tax incentives, and states may provide other

40The extent to which these data apply specifically to DI and SSI disabled beneficiaries is

unknown.

41Outside of the ongoing demonstration project, SSA does not routinely intervene in the

delivery of medical services for its beneficiaries.

42For example, DI and SSI applicants may not be covered by health insurance before or

during the application for benefits process. In addition, new DI beneficiaries have a 24-

month waiting period before Medicare eligibility begins. Moreover, Medicare and Medicaid

often severely restrict funding for assistive technologies that improve function or help

prevent secondary disabilities, and Medicare generally does not cover the costs of

prescription drugs. Lack of coverage for medications can limit the ability of some people

with disabilities to return to work in cases in which drugs are essential to improving

functioning.
Page 31 GAO-01-153 Improving Return-to-Work Efforts

assistance, to employers to encourage them to return people with

disabilities to work.43

Other Systems Use

Staff With a Wide

Range of Expertise to

Assess and Enhance

Claimants’ Work

Potential

The private disability insurers and social insurance systems in the other

countries we studied have developed techniques for using the right staff to

assess eligibility for benefits and return those who can to work. Officials of

the three private insurers and the social insurance systems told us that they

have access to individuals with a range of skills and expertise, including

medical experts and vocational rehabilitation experts. Private disability

insurers told us that they apply this expertise as appropriate to costeffectively assess and enhance claimants’ capacity to work. In contrast,

SSA’s DDS teams of medical and psychological consultants and disability

examiners are hired and trained to assess eligibility of applicants to receive

cash benefits rather than to enhance claimants’ capacity to work. As a

result, the staff of SSA and the DDSs do not have the expertise to carry out

the role of returning disabled workers to productive employment.

Private Insurers Seek to Use

Appropriate Staff to Assess

Eligibility and Provide

Return-to-Work Services

The three private disability insurers that we studied have access to

multidisciplinary staff with a wide variety of skills and experience who can

assess claimants’ eligibility for benefits and provide needed return-to-work

services to enhance the work capacity of claimants with severe

impairments. The private insurers’ core staff generally includes claims

managers, medical experts, vocational rehabilitation experts, and team

supervisors.44 The insurers explained that they set hiring standards to

ensure that these multidisciplinary staff are highly qualified. Such

qualifications are particularly important because assessments of benefit

eligibility and work capacity can involve a significant amount of

professional judgment when, for example, a disability cannot be objectively

verified on the basis of medical tests or procedures or clinical

43For example, small businesses may take an annual tax credit for a variety of costs incurred

in providing employee accommodations such as readers, sign language interpreters, and

equipment modifications. Also, all businesses may take an annual deduction for the expense

of removing physical, structural, and transportation barriers to disabled workers. Further,

state vocational rehabilitation agencies may provide various services to employers, such as

rehabilitation engineering services for architectural barrier removal and work-site

modifications.

44The insurers also employ disability income specialists to assist claimants in applying for DI

benefits.
Page 32 GAO-01-153 Improving Return-to-Work Efforts

examinations alone.45 Table 4 describes the responsibilities of this core

staff of experts employed by private disability insurers, as well as its

general qualifications and training.

Table 4: Responsibilities and Qualifications of Staff Employed by Private Disability Insurers to Assess and Enhance a Claimant’s

Work Potential

a

At one company, the medical experts are employees of a company subsidiary but are often colocated

with the insurer’s employees.

b

One company, for example, employs 85 part- and full-time physicians, including psychiatrists, doctors

of internal medicine, orthopedists, family practice physicians, cardiologists, doctors of occupational

medicine, and neurologists.

The three disability insurers we reviewed use various strategies for

organizing their staff to focus on return to work, with teams organized to

45According to one insurer, disabilities with subjective diagnoses include certain types of

mental illness, fibromyalgia, chronic pain (often back pain), and chronic fatigue syndrome.

Type of staff Responsibilities Qualifications and training

Claims managers • Determine disability benefit eligibility.

• Develop, implement, and monitor an individualized

claim management strategy.

• Serve as primary contact for the claimant and the

claimant’s employer.

• Focus on facilitating the claimant’s timely, safe

return to work.

• Coordinate the use of expert resources.

One insurer gives preference to those with a

college degree and requires insurance claims

experience and specialized training and education.

Another requires a college degree, a passing grade

on an insurer-sponsored test, and specialized

training and coaching.

Medical and related expertsa • Collect and evaluate medical and functional

information about the claimant to assist in the

eligibility assessment and help to ensure that

claimants receive the appropriate medical care to

enable them to return to work.

• At one insurer, physicians also help train company

staff.

Medical staff include registered nurses with case

management or disability-related experience and

experts in behavioral and mental issues, such as

psychologists, experienced psychiatric nurses, and

licensed social workers. Two insurers also employ

board-certified physicians in various specialties.b

Vocational rehabilitation

experts

• Help assess the claimant’s ability to work.

• Help overcome work limitations by identifying

needed assistance, such as assistive devices and

additional training, and ensuring that it is provided.

Rehabilitation experts are master’s-degree-level

vocational rehabilitation counselors. In addition,

one insurer requires board certification and 5 years

of experience.

Supervisors • Provide oversight, mentoring, and training. One insurer gives preference to those with a

college degree and requires 3 years’ disability

experience, some management experience, and

specialized training. Another insurer requires a

college degree, more than 12 years’ disability

claims experience, and completion of courses

leading to a professional designation.
Page 33 GAO-01-153 Improving Return-to-Work Efforts

manage claims associated either with a specific impairment type or with a

specific employer (that is, the group disability insurance policyholder). One

insurer organizes its staff by the claimant’s impairment type—for example,

cardiac/respiratory, orthopedic, or general medical—to develop in-depth

staff expertise in the medical treatments and accommodations targeted at

overcoming the work limitations associated with a particular impairment.

The other two insurers organize their staff by the claimant’s employer

because they believe that this enables them to better assess a claimant’s

job-specific work limitations and pursue workplace accommodations,

including alternative job arrangements, to eliminate these limitations.46

Regardless of the overall type of staff organization, each of the three

insurers facilitates the interaction of its core staff—claims managers,

medical experts, and vocational rehabilitation experts—by pulling these

experts together into small, multidisciplinary teams responsible for

managing claims. Additionally, one insurer engenders team interaction by

physically colocating core team members in a single working area.

To provide a wide array of needed experts, the three disability insurers

expand their core staff through agreements or contracts with subsidiaries

or other companies. These experts—deployed both at the insurer’s work

site and in the field—provide specialized services to support the eligibility

assessment process and to help return claimants to work. For instance,

these insurers contract with medical experts beyond their core employee

staff—such as physicians, psychologists, psychiatrists, nurses, and physical

therapists—to help test and evaluate the claimant’s medical condition and

level of functioning. In addition, the insurers contract with vocational

rehabilitation counselors and service providers for various vocational

services, such as training, employment services, and vocational testing.47

The private insurers we examined told us that they strive to apply the

appropriate type and intensity of staff resources to cost-effectively return

to work claimants with work capacity. The insurers described various

techniques that they use to route claims to the appropriate claims

46All three insurers, however, have behavioral care specialists specifically for managing

psychiatric claims.

47Two insurers also contract with investigators and surveillance personnel to investigate

potential inconsistencies between claimants’ statements and actual activities. One company

employs field-based investigators who verify claimant information and assess the

conformance of the claim to observed claimant activities. These investigators usually have

prior investigative experience and receive ongoing training on current medical issues and

other professional education.
Page 34 GAO-01-153 Improving Return-to-Work Efforts

management staff, which include separating (or “triaging”) different types

of claims and directing them to staff with the appropriate expertise.

According to one insurer, the critical factor in increasing return-to-work

rates and, at the same time, reducing overall disability costs is proper

triaging of claims. In general, the private insurers separate claims by those

who are likely to return to work and those who are not expected to return

to work. The insurers told us that they assign the type and intensity of staff

necessary to manage claims of people who are likely to return to work on

the basis of the particular needs and complexity of the specific case (see

table 5).

Table 5: Staff Assignment for Claims Management by Triage Category

As shown in table 5, claimants expected to need medical assistance, such

as those requiring more than a year for medical stabilization, are likely to

receive an intensive medical claims management strategy. A medical

strategy involves, for example, ensuring that the claimant receives

appropriate medical treatment. Claimants who need less than a year to

stabilize medically are managed much less intensively. For these claims, a

Triage category Staff assigned

Types of return-to-work services

provided

Likely to return to work

Condition requires medical assistance and

more than 1 year to stabilize medically.

Medical specialist • Recommend improvements in treatment

plan to treating physician.

• Refer claimant for more specialized or

appropriate medical services.

• Ensure frequency of treatment meets

standards for condition.

Condition requires less than a year to

stabilize.

Claims manager • Monitor medical condition.

• Maintain contact with employer and

physician to ensure return to work.

• Obtain input from medical and vocational

specialists as needed.

Condition is stabilized, and claimant needs

rehabilitation or job accommodation to

return to work.

Multidisciplinary team including

• Vocational expert

• Medical expert

• Claims specialist

• Other specialists as needed

• Evaluate claimant’s functional abilities for

work.

• Customize return-to-work plan.

• Arrange for needed return-to-work

services.

• Monitor progress against expected returnto-work date.

Unlikely to return to work

Claimant is determined unable to return to

work.

Claims manager • Review medical condition and level of

functioning regularly.
Page 35 GAO-01-153 Improving Return-to-Work Efforts

claims manager primarily monitors the claimant’s medical condition to

assess whether the claimant has stabilized sufficiently medically to begin

vocational rehabilitation, if appropriate. Alternatively, a claimant with a

more stable, albeit serious, medical condition who is expected to need

vocational rehabilitation, job accommodations, or both to return to work

might warrant an intensive vocational strategy. The private disability

insurers generally apply their most resource-intensive, and therefore most

expensive, multidisciplinary team approach to these claimants. Working

closely with the employer and the attending physician, the team actively

pursues return-to-work opportunities for claimants with work potential.

Finally, claimants who are likely not to return to work (or “stable and

mature” claims) are generally managed using a minimum level of

resources, with a single claims manager responsible for regularly reviewing

a claimant’s medical condition and level of functioning.48 The managers of

these claims carry much larger caseloads than managers of claims that

receive an intensive vocational strategy. For example, one insurer’s average

claims manager’s caseload for these stable and mature claims is about

2,200 claims, compared with an average caseload of 80 claims in the same

company for claims managed more actively.

Mirroring this wide difference in caseload size, administrative costs for

managing claims increase as the intensity of resources dedicated to claims

management increases.49 Thus, one private insurer told us that its annual

average administrative costs for managing stable and mature claims

equaled about $100 per claim. In contrast, the same insurer reported annual

average costs for claims managed more actively to be about $2,400 per

claim, with claims managed through the multidisciplinary team approach

48The insurers review these claims on a regular basis, ranging from every 6 months to every

3 years, depending upon the insurer and the characteristics of the claim.

49Administrative costs include salaries and overhead expenses, such as legal fees, telephone

and computing services, and rent. These costs do not include, however, some costs of

returning a claimant to work, such as costs of return-to-work services provided by vendors.

For example, one insurer told us that its average cost per claim for using vendor services to

return an employee to work was about $470. Included in this calculation are individuals with

disabilities that are less severe than those of individuals who qualify for SSA disability

benefits. The insurer told us that the average cost of returning an employee to work could

be higher for individuals with disabilities severe enough to qualify for SSA disability

benefits.
Page 36 GAO-01-153 Improving Return-to-Work Efforts

focusing on return to work costing even more to manage.50 Similarly,

another insurer told us that it spent 10 times more to manage claims that

required an active intervention strategy than it did to manage stable and

mature claims.

Regardless of the category into which a claim is placed, the claims manager

is responsible for identifying the appropriate experts and involving them in

the management of the claim as an essential element of developing and

implementing a customized claims management strategy. The claims

manager may informally use the assistance of experts or hold an

interdisciplinary team meeting, including clinical and rehabilitation

experts, to obtain advice on developing the claims management strategy

and help in determining which specialized experts need to be deployed to

manage the claim. Further, if the claims manager refers the claim to a

specialist, that specialist may determine that additional expertise is

required as well. But the insurers told us that they escalate a claim to staff

with progressively more training and specialization, and thus higher cost,

only if needed to resolve increasingly complex claims management issues.

Moreover, to ensure that staff are utilized cost-effectively, the private

insurers said that they compute the return accruing from investing in

return-to-work resources for a particular claimant. For example, for

claimants who were successfully returned to work, one insurer reported

realizing a return of $90 in benefit savings for each dollar invested in

vendor services for rehabilitation.51 Another insurer estimated that it

invests on average between about $60 and $1,900 to successfully return a

50In addition, the same company reported that the annual administrative cost for intake and

triage of claims to the correct staff for claims management was about $18 per claim.

51These data, however, are incomplete because they do not include the costs associated with

claimants who received assistance but were unable to return to work. In addition, the data

reflect costs for some claimants whose disabilities are less severe than those of SSA’s

disabled beneficiaries. The insurer told us that the cost for returning claimants with more

severe disabilities to work might be higher.
Page 37 GAO-01-153 Improving Return-to-Work Efforts

claimant to work.52 In addition, the insurers compare the amount invested

in staff resources with the estimated gross savings they expect to accrue

over the life of the claim from returning an average claimant to work,

which range from $25,000 to $40,000.53

Other Countries Also Use

Specialized Staff to Return

Claimants to Work

Other countries’ social insurance offices also call upon various specialists,

such as physicians, vocational experts, and psychologists, in the process of

evaluating and enhancing a person’s ability to work. If the needed expertise

is unavailable in-house, the social insurance agency may purchase the

necessary services from other organizations. The expertise applied is

decided on a case-by-case basis depending on the case’s complexity. For

example, the social insurance offices in Sweden are responsible for

working with the regional and local employment and rehabilitation offices

to determine the appropriate types of rehabilitation services for a claimant.

Medical assessments of work capacity in Germany and The Netherlands

may also be supplemented by advice from vocational or other experts.

Social insurance offices in Germany and Sweden select the appropriate

staffing and services to dedicate to particular cases on the basis of the

likelihood of a successful outcome. The staff assignments made and the

return-to-work actions taken by the social insurance offices depend on an

assessment of each applicant’s potential for returning to work. In complex

cases of potential long-term disability, more extensive evaluations

involving psychologists and vocational specialists may be conducted to

assess the work capacity of an applicant. Officials explained that, in

Germany, medical rehabilitation is provided before an applicant’s condition

is assessed to determine whether vocational rehabilitation is necessary.

Officials also said that only if successful rehabilitation seems unlikely, or if

52The insurer bases the costs on the average hourly salary for a vocational rehabilitation

expert and the average amount of time this expert spends in returning a claimant to work in

the following situations: (1) return to work with the same employer, with job

modifications—$58.90; (2) return to work with the same employer and an alternative job—

$106.02; and return to work with a different employer, with or without retraining—$1,884.80.

These costs are only for those claimants who were successfully returned to work. If

claimants who did not return to work were included in the cost estimate, the cost would

increase. Moreover, the cost might also increase if the claimants considered were only those

with severe disabilities.

53Two insurers calculated average savings from returning a claimant to work as,

respectively, nearly $34,000 and about $40,000. The third insurer calculated the average

savings in lifetime benefits for returning to work a 55-year-old private disability beneficiary

who also receives DI to be about $25,000.
Page 38 GAO-01-153 Improving Return-to-Work Efforts

rehabilitation has been provided without success, will the social insurance

offices in Germany and Sweden typically grant the person long-term

disability benefits. Moreover, officials told us that once an individual is

granted long-term benefits because he or she is considered too severely

disabled to benefit from services, the social insurance offices rarely

reassess the person’s return-to-work potential and generally do not offer

any return-to-work services or benefits.

The Netherlands also dedicates resources to evaluating return-to-work

potential and providing rehabilitation services on the basis of the particular

return-to-work potential and needs of individuals. But unlike Germany and

Sweden, The Netherlands offers vocational rehabilitation to disability

beneficiaries who choose to pursue a work goal even after they are granted

long-term benefits.

SSA Staff Resources Are

Not Focused on Returning

Claimants to Work

In contrast to the private insurers and the foreign social insurance offices,

SSA requires staff who make determinations only to assess the eligibility of

applicants to receive cash benefits and not to assess what is needed for an

individual to return to work or to help an individual with work capacity to

return to work. Neither does SSA provide staff to monitor applicants’ or

beneficiaries’ medical treatment. To make initial benefit eligibility

determinations, SSA relies on teams comprising a disability examiner and a

medical or psychological consultant. Since SSA’s teams do not carry out the

variety of roles related to return to work that teams in the private and

foreign disability systems do, SSA does not require that these positions be

staffed with individuals with vocational skills and expertise. However,

under the Ticket to Work Act, beneficiaries who voluntarily choose to

attempt a return to work may tap into vocational expertise outside SSA that

could provide the additional services, expertise, and supports to help them

in their effort, but only after benefit award.

Moreover, while SSA funds the state DDS agencies that perform eligibility

determinations under contract with SSA, SSA’s regulations delegate

authority to each DDS to set hiring policies and determine how to organize

staff charged with carrying out the eligibility assessment function.

Consequently, in contrast to the standardized hiring practices used by the

private insurers, considerable variation can exist among the states in the

requisite qualifications for hiring key staff. For example, among the DDSs,

the required educational background for disability examiners ranges from a

high school diploma, to some college, to a college degree. In addition, SSA

separates beneficiaries into groups according to their likelihood of medical
Page 39 GAO-01-153 Improving Return-to-Work Efforts

improvement for the purpose of assessing continuing eligibility for

benefits, in accordance with law and regulation.54 In contrast to practices

of the private insurers and foreign social insurance offices, SSA does not

separately evaluate whether a beneficiary has the potential to return to

work.

Conclusions Return-to-work practices used in the U.S. private sector and in other

countries reflect the understanding that some people with disabilities can

and do return to work. In 1996, we recommended that SSA place greater

priority on helping disabled beneficiaries return to work. We also

recommended that the agency develop a comprehensive strategy for this

effort. While SSA has begun to focus more on return to work, it has yet to

adopt a comprehensive strategy for implementing this new approach. For

example, it has yet to integrate its return-to-work efforts with its initiatives

to improve the disability decision-making process. Moreover, although the

Ticket to Work Act is expected to enhance work incentives for people with

disabilities, fundamental policy weaknesses in the DI and SSI programs

remain unchanged. As we have reported in the past, these weaknesses

include an eligibility determination process that concentrates on

applicants’ incapacities, an “all-or-nothing” DI benefits structure, and

return-to-work services offered only after a lengthy determination process.

We continue to believe that opportunities exist for enabling more of SSA’s

disabled beneficiaries to reduce or eliminate their dependence on cash

benefits, and that SSA could do this without jeopardizing the availability of

benefits for people who cannot work. We also continue to believe SSA still

is not placing enough priority on identifying and enhancing the work

potential of its beneficiaries with disabilities and needs to develop a

comprehensive return-to-work strategy. In developing such a strategy, SSA

can supplement what it learns from the experiences of the Ticket to Work

demonstrations with the return-to-work approaches of other disability

systems to identify elements of a new system that could help each

individual realize his or her productive potential. Having identified these

elements, SSA would then be in a position to determine the legislative and

regulatory changes needed to test and evaluate their effectiveness.

54The law contains several exceptions that allow benefits to be terminated even when a

person’s medical condition has not improved. For example, benefits may be disallowed

when new or improved diagnostic techniques reveal that the impairment is less disabling

than originally determined.
Page 40 GAO-01-153 Improving Return-to-Work Efforts

We acknowledge that limited data exist on the cost-effectiveness of the

return-to-work approaches used in the other systems we examined. In

addition, SSA may face greater difficulty in returning some of its

beneficiaries to work than private sector insurers do, since its programs

cover a broader population than the private insurers. Moreover, significant

differences exist between SSA’s disability programs and those of private

sector disability insurers and social insurance programs in other countries.

Many of these differences can be attributed to the particular laws and

regulations governing the programs. Despite the data limitations and the

differences between disability systems, initial return-to-work rates of U.S.

private insurers are promising, and the experiences of the other countries

show that return-to-work strategies can apply to a broad population with a

wide range of skills and disabilities. Nevertheless, adopting a

comprehensive return-to-work strategy will require fundamental changes

to the underlying philosophy and direction of the DI and SSI programs,

including the determination of disability. Policymakers will need to

carefully weigh the implications of such changes.

Agency Comments and

Our Response

In commenting on a draft of this report, SSA agreed that the return-to-work

practices that other disability programs follow provide useful information

and that emphasis should be placed on helping beneficiaries with

disabilities return to work. However, the agency had three concerns with

the report. First, it disagreed with our assertion that it needs to develop a

comprehensive return-to-work strategy for its disability programs, stating

that it is already devoting substantial resources to return to work. For

example, SSA cited a number of activities that it has under way or is

planning to implement, including working with the Congress to develop

and implement the Ticket to Work Act. Second, the agency stated that the

DI and SSI policies discussed in the report are specified by the Social

Security Act and that changing them would require new legislation. Finally,

SSA said that differences between its programs and those of U.S. private

insurers and other countries’ social insurance agencies might limit the

extent to which specific practices of these disability systems are

transferable to the DI and SSI programs. SSA also made a few technical

comments, which we incorporated where appropriate. (SSA’s comments

appear in app. I.)

We acknowledge throughout this report SSA’s return-to-work activities and

the potential for improvements under the Ticket to Work Act, such as

expanding the availability of vocational rehabilitation. Although these are

steps in the right direction, fundamental policy weaknesses—particularly
Page 41 GAO-01-153 Improving Return-to-Work Efforts

at the front end of the eligibility assessment process—remain unchanged

by the act and SSA’s activities. These weaknesses include, as we explain in

the report, an eligibility assessment process that encourages applicants to

focus on their incapacities and return-to-work assistance that occurs only

after an often lengthy eligibility process, if at all. Indeed, although SSA

stated that the Social Security programs are programs of last resort, for

some applicants and beneficiaries these programs are the sole option for

return-to-work assistance and medical care. Although these individuals

may have a variety of needs for supports and services other than

permanent cash payments to help them make the transition to the

workforce, eligibility for noncash services is, paradoxically, linked to

emphasizing one’s limitations and de-emphasizing any work capacity.

Because of the continuing existence of such structural program

weaknesses, we believe, as we have concluded in this and earlier reports,

that SSA’s return-to-work activities do not constitute the comprehensive

strategy necessary to reorient the agency’s policies and practices to focus

on work, while not jeopardizing benefits for people who cannot work.

Absent a comprehensive strategy, SSA lacks a road map for enhancing the

productive capacity of its applicants and beneficiaries and thus risks

spending substantial resources in a piecemeal fashion with little likelihood

of significantly improving outcomes.

With regard to the concern about the need for legislative change, we have

always recognized that new legislation may be in order to reorient the DI

and SSI programs toward return to work and have called for SSA to identify

the legislative changes needed to implement such a reorientation. While

some aspects of the current program are based in law, however, others are

set forth in agency regulations. For example, the sequential process used

by SSA to determine whether applicants meet the Social Security Act’s

definition of disability is set forth in regulation—not in law. Important

aspects of the program could, therefore, be modified by the agency without

legislation.

Regarding SSA’s third concern, we have long acknowledged, in this and

other reports, that the DI and SSI programs differ in a number of ways from

those of private insurers and social insurance programs in other countries.

For example, SSA’s programs cover a broader population than the private

insurers do. Although a significant portion of the long-term disability

beneficiaries of the private insurers we examined also received DI benefits,

we sought to compensate for the differences between SSA’s beneficiaries

and those of the private sector by examining the return-to-work

approaches of other countries’ disability systems as well. These systems,
Page 42 GAO-01-153 Improving Return-to-Work Efforts

like SSA’s disability system, cover a broad population with a wide range of

work experiences, skills, and disabilities. We have also acknowledged that

other significant differences exist between SSA’s disability programs and

those of the other systems we examined, such as the availability of

universal health insurance in some countries. But the existence of these

and other differences among the systems should not be construed to imply

that our federal programs have little to learn from the approaches of other

systems. Indeed, SSA itself has long had an interest in disability programs

in other countries and their rehabilitation and return-to-work efforts.

SSA, in its March 11, 1999, strategic plan for the disability programs, said

that many beneficiaries with disabilities want to work and become

independent and many can work despite their impairments if they receive

the supports they need.55 To tap this potential, we believe that a

comprehensive return-to-work strategy addressing the fundamental policy

weaknesses in the DI and SSI programs is needed. But, in developing such a

strategy, we do not advocate either wholesale or immediate adoption of

these systems’ approaches. Rather, we suggest a carefully managed

approach, in which SSA builds on the experiences of other disability

systems (while considering the differences among the systems) and the

results of the Ticket to Work demonstrations to identify elements of a new

system that will help each person realize his or her productive potential. In

thinking through such a system, SSA should first identify the elements of a

model system and then determine the legislative and regulatory changes

needed to test and evaluate effectiveness of these elements. Through such

testing and evaluation, SSA, as the primary manager of multibillion-dollar

programs and as the entity with fiduciary responsibility for the trust funds,

could take the lead in developing the evidence it needs to suggest

legislative and regulatory changes necessary to develop a disability system

for the 21st century.

We are sending copies of this report to the Honorable Kenneth S. Apfel,

Commissioner of Social Security; appropriate congressional committees;

and other interested parties. We will also make copies available to others

on request.

55SSA, Social Security and Supplemental Security Income Disability Programs: Managing for

Today; Planning for Tomorrow (Baltimore, Md.: SSA, Mar. 11, 1999).
Page 43 GAO-01-153 Improving Return-to-Work Efforts

If you or your staff have any questions concerning this report, please call

me at (202) 512-7215 or Carol Dawn Petersen at (202) 512-7066. Another

GAO contact and staff acknowledgments are listed in appendix II.

Barbara D. Bovbjerg

Director, Education, Workforce,

and Income Security Issues
Page 44 GAO-01-153 Improving Return-to-Work Efforts

Appendix I

Comments From the Social Security Apendxies

Administration ApendxiI
Appendix I

Comments From the Social Security

Administration

Page 45 GAO-01-153 Improving Return-to-Work Efforts
Appendix I

Comments From the Social Security

Administration

Page 46 GAO-01-153 Improving Return-to-Work Efforts

Now on p. 14.

Now on pp. 8 and

40.
Appendix I

Comments From the Social Security

Administration

Page 47 GAO-01-153 Improving Return-to-Work Efforts

Now on p. 34.
Page 48 GAO-01-153 Improving Return-to-Work Efforts

Appendix II

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact Barbara H. Bordelon, (202) 512-4427

Staff

Acknowledgments

Kelsey M. Bright, Julie M. DeVault, William E. Hutchinson, and Mark

Trapani made key contributions to this report.
Page 49 GAO-01-153 Improving Return-to-Work Efforts

Related GAO Products

SSA Disability: Other Programs May Provide Lessons for Improving Returnto-Work Efforts (GAO/T-HEHS-00-151, July 13, 2000).

Social Security Disability Insurance: Raising the Substantial Gainful

Activity Level for the Blind (GAO/T-HEHS-00-82, Mar. 23, 2000).

Private Disability Insurance: Employer-Sponsored Plans (GAO/HEHS-00-

18R, Nov. 5, 1999).

Social Security Disability: Multiple Factors Affect Return to Work (GAO/THEHS-99-82, Mar. 11, 1999).

Social Security Disability Insurance: Factors Affecting Beneficiaries’

Return to Work (GAO/T-HEHS-98-230, July 29, 1998).

Social Security Disability Insurance: Multiple Factors Affect Beneficiaries’

Ability to Return to Work (GAO/HEHS-98-39, Jan. 12, 1998).

Social Security Disability: Improving Return-to-Work Outcomes Important,

but Trade-Offs and Challenges Exist (GAO/T-HEHS-97-186, July 23, 1997).

Social Security: Disability Programs Lag in Promoting Return to Work

(GAO/HEHS-97-46, Mar. 17, 1997).

SSA Disability: Return-to-Work Strategies From Other Systems May

Improve Federal Programs (GAO/HEHS-96-133, July 11, 1996).

Social Security: Disability Programs Lag in Promoting Return to Work

(GAO/T-HEHS-96-147, June 5, 1996).

SSA Disability: Program Redesign Necessary to Encourage Return to Work

(GAO/HEHS-96-62, Apr. 24, 1996).

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