Association for Public Policy Analysis & Management

Millions of hard-working Americans leave the labor force every year, at least temporarily, because of injury or illness. Without steady earnings, these workers and their families often end up in public programs such as Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), Medicare, and Medicaid. The resulting costs to state and federal governments are steep, but the public sector could help to reduce those costs by adopting strategies to help people stay at or return to work, rather than fall through the cracks of a fragmented system.

Previous research has shown that the societal benefits of implementing a successful stay-at-work/return-to-work (SAW/RTW) program clearly outweigh the costs. These benefits accrue primarily to the worker who returns to work after the onset of a long-term disability, rather than being laid off and replaced by a new employee, and to the government (that is, to taxpayers). But employers often face significant challenges when considering whether to retain an employee following an injury or illness, especially when the employer is small, when the worker’s productivity loss is relatively high, and when turnover is not very costly.

Despite the clear benefits to workers and taxpayers, no federal agency is in charge of preventing job loss after injury or illness. And state workforce and vocational rehabilitation (VR) agencies have not traditionally focused on workers who are at risk of losing their jobs because of injury or illness. State-regulated workers’ compensation systems provide cash and medical benefits to workers who experience work-related injury or illness, but they do not help the millions of employees whose medical conditions are not work-related, and they often fail to help even those who are covered.

As part of the SAW/RTW Policy Collaborative, as project funded by the Office of Disability Employment at the U.S. Department of Labor, we convened a policy work group of experts tasked with identifying and developing actionable early intervention SAW/RTW options for state agencies. The policy work group includes representatives from the states of Alabama, Arkansas, Rhode-Island, and Vermont. Each of these states have implemented innovative programs to facilitate positive SAW/RTW outcomes.

In this paper, we: (1) outline the multiple places where states can intervene early to improve SAW/RTW outcomes, including vocational rehabilitation agencies, state temporary disability insurance programs, with state agency employees, and in the workers’ compensation system; (2) present the challenges involved in doing so; (3) provide an overview of current promising initiatives; and (4) describe specific opportunities for programs that can be designed, piloted, and evaluated fairly quickly.