Coronavirus-related paid employer leave could top $23 billion

Kathryn Mayer

Analysis from the Integrated Benefits Institute finds the staggering cost of sick leave and short-term disability as a result of the pandemic.

Lost time from work due to COVID-19 could cost employers more than $23 billion in benefits for absent workers, impacting up to 5.6 million employees, new research finds.

The staggering figure comes from the Integrated Benefits Institute, which assessed potential sick leave wages, short-term disability payments and spending on employee benefits for absent workers. IBI used employment, wage and leave benefit data from the US Bureau of Labor Statistics and lost workday experiences contained in IBI’s dataset of employer-sponsored STD claims to model lost work time impacts for low-, mid- and high-range scenarios depending on the total COVID-19 cases across the country.

In terms of the costs of COVID-19 absences, “what we might see play out are the implications of employers’ decisions about emphasizing care management and support for healthy lifestyles as part of their overall benefits strategies,” says Brian Gifford, research and analytics director for IBI. “That could turn out to be important not only for leave payments, but for some people the difference between whether or not they needed scarce resources such as ventilators in order to pull through. We may not know the answer to that until we are able to get a look at employees from different companies with different benefits policies and see how they fared during and after the pandemic.”

Up to 5.6 million employees could be impacted by coronavirus-related leave, IBI notes, with nearly 3 million workers at firms with fewer than 500 employees entitled to paid leave per the Families First Coronavirus Response Act that went into effect April 1.

“One of the most important things to keep in mind is that this analysis assumes a pretty low rate of very serious, ICU cases—about 8% of the total. That keeps absence durations relatively short,” Gifford says. “But at least for younger workers, those serious cases are driven by complications such as cardiovascular conditions and diabetes—things that unfortunately are not uncommon in the workforce, and which impose productivity burdens under the best of circumstances.”

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