The blog of the Urban Institute
February 8, 2021

Strengthening Paid Leave Policies Could Yield Positive Work and Health Outcomes

February 8, 2021

As the COVID-19 pandemic rages on, it is revealing holes in policies to support workers’ health and caregiving needs. And people’s starkly different experiences with the disease are creating additional gaps; most are asymptomatic, others have mild to severe illness, and others struggle with what is often referred to as “long-haul” COVID-19.

COVID-19 is revealing what occupational health experts have known for a long time: workers facing seemingly identical illnesses and injuries can experience very different health outcomes, leading some to quickly recover and return to work speedily, while others require longer leaves and additional assistance to get back to work.

The pandemic has also called attention to large gaps in access to paid family and medical leave to care for an ill loved one or recover from one’s own illness or injury—leave that helps protect people from the financial consequences of a health shock. At both the state and national levels, support is increasing for a comprehensive paid leave benefit. At the national level, the Family and Medical Insurance Leave (FAMILY) Act provides a solid framework for a 12-week benefit for parental, caregiving, and medical leave. And in states with comprehensive programs, medical leave for a worker’s own illness or injury is responsible for two-thirds of the cost of the program and is the benefit most used by low-wage workers.

Replacing lost wages for workers with serious illnesses and injuries is vital but insufficient. Evidence shows return-to-work (RTW) services improve health and employment outcomes and can help workers avoid or delay permanent disability and exiting the labor force. But most workers do not have access to them. Our new brief suggests that to better support workers who have difficulty returning to their jobs after experiencing a new serious illness or injury, state and paid family and medical leave programs should consider expanding targeted RTW services.

Existing policies to helping workers after a new illness or injury aren’t enough

Millions of workers experience health shocks every year. An Urban Institute analysis found, on average, 4.2 percent of workers ages 18 to 62 reported a new work-limiting health condition or a new major health shock annually. These workers were three times as likely to leave the labor force and twice as likely to have fallen into poverty within two years of experiencing such a condition. The onset of a new serious medical condition is especially threatening to older workers, women, and people of color, who often face structural barriers to health care access and employment supports.

Our past research shows the United States does little to assist workers who have difficulty returning to jobs after taking leave to address a new serious health condition. In particular, the Social Security Disability Insurance (SSDI) program was not designed to help workers with short-term, temporary disabilities, and it does not provide an opportunity to intervene early—when evidence shows intervention is most effective.

How federal and state policies could incorporate RTW services

In contrast to SSDI, a short-term paid medical leave benefit supports newly ill and injured workers soon after they experience a health shock. That immediate assistance provides a mechanism to identify and offer help to newly at-risk workers who are having difficulty managing their health condition.

In addition to a timely intervention, the most effective RTW interventions improve coordination, communication, and services among the employee, the employer, the health care provider, and the worker’s personal environment. They center around (PDF) the person’s functional capacity and ability to stay at or return to work. Intervening early and successfully could increase employment rates, improve health outcomes, reduce absences, and delay or reduce take-up of SSDI.

Our new brief suggests the following national and state actions could help expand RTW services.

  • A new national paid medical-leave program could include grants to states to provide RTW services targeted to workers who struggle after taking leave. The paid medical-leave benefit would provide the administrative mechanism to identify and engage with workers with serious new illnesses and injuries. Moreover, combining RTW services with wage-replacement benefits could boost expected positive labor force participation and health outcomes associated with paid-leave benefits. Absent federal legislation to enact national paid leave, a similar approach could be used by partnering with states that already have paid leave programs in place.
  • The federal government could invest in evidence-based RTW services through grants to states. The grants could be combined with proposals to enact a new national paid family and medical leave program. Absent new legislation, grants could be targeted to states with existing paid family and medical leave programs. Although strong evidence exists on the types of interventions that work, less is known about how to deliver these services outside of the employer-based model used in the United States. For this reason, a tiered-evidence approach to funding would allow states to test new approaches and scale promising models over time.

As the COVID-19 pandemic has shown vividly, people respond differently to a health shock. Most workers experiencing a health shock will have no need for return to work services, but those who struggle to return to their jobs are especially at risk of leaving the labor force for the long term and experiencing extended hardship. For those workers, return to work services are vital, and paid medical-leave programs offer an opportunity to reach those workers.

A waitress served customers water at an outdoor table in Chelsea as New York City continued Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on July 30, 2020, in New York City. (Photo by Alexi Rosenfeld/Getty Images)

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