How is disability management evolving amid remote work and technological change?

As employers and employees continue to adapt to new ways of working, such as hybrid and remote arrangements, organizations must rethink disability management. In addition, emerging technologies are posing advantages and challenges in disability management as employers strive to maintain a human touch.

Read: How are pandemic reverberations affecting disability management programs, workplace accommodations?

“Our disability management strategy is to be proactive and have a people-first lens, emphasizing flexibility, well-being and inclusivity,” says Evans.

Leading causes

Around half (53 per cent) of Canadian plan sponsors have a long-term disability plan and 46 per cent have a short-term disability plan, according to the 2025 Benefits Canada Healthcare Survey.

It also found just 36 per cent of plan sponsors were concerned about the utilization of their short-term disability plan, a 20-point drop from 2022 (56 per cent) during the height of the pandemic, while 43 per cent were concerned about the utilization of their long-term disability plan, down from 51 per cent in 2022.

However, the cost of disability claims continues to rise. The Canadian Life and Health Insurance Association’s latest annual fact book found, in 2024, Canadian insurers paid out $8 billion for LTD and $2 billion for STD, up from $7.7 billion and $1.8 billion, respectively, in 2023.

Mental health continues to be the primary driver for a large percentage of LTD claims. Indeed, a 2025 report by Sun Life Financial Inc. found mental-health issues accounted for 40 per cent of LTD claims and women (45 per cent) were more likely than men (33 per cent) to make a mental-health claim. Among employees younger than age 40 who made an LTD claim, more than half cited mental health as the reason.

Read: Lululemon wins award for holistic absence management programs

While mental health may account for the largest percentage of disability claims, it’s often accompanied by — or stems from — several other factors. “It’s becoming more and more apparent that employees don’t have just one illness and they don’t have just one injury that’s preventing them from working,” says Evans. “Employees are facing mental-health challenges, stressors and diseases and they’re all layering on top of one another. The more we can do as a company to relieve some of those layers and support our employees’ whole well-being, the better we’re able to support these employees be-fore they get to a point where they can’t work.”

The stress of living through the pandemic has been replaced with a challenging economy and rising cost of living, says Massimo Nini, senior vice-president of consulting, underwriting and actuarial services at AGA Benefit Solutions.

“In 2020, people were struggling because they may have lost their job and had to rely on the government [for financial support]. . . . Now, there has been inflation and interest rates are higher — it has been a very complex five years.”

Alongside increasing geopolitical strife and environmental concerns, employees’ mental health is also being impacted by readjusting to life and work in the post-pandemic era, says Julie Holden, president of Carelogix Health Solutions Inc. “They may not specifically express those things, but they’re certainly a factor and can be very worrisome for people. Also, in a lot of cases, people are being asked to return to the workplace and that creates other issues, such as [an impact on] their finances.”

Read: How Algonquin College is stepping up its absence management program

The role of remote work

The majority (84 per cent) of employees who are able to work remotely view it as a positive experience personally, according to Benefits Canada’s 2024 Future of Work Survey.

However, it’s important for employers that offer remote or hybrid arrangements to check in on employees’ mental wellness to prevent future disability leaves, says Greg Hurley, area vice-president of group benefits services for Canada at Arthur J. Gallagher & Co.

“Even though employers can set different standards in the workplace as far as psychological safety goes, it’s hard to tap into employees when you’re not seeing them every day. It just puts an extra onus on the employer and managers to check in with these employees to see if they’re struggling and offer them that support if needed.”

In addition, home-office setups for hybrid or remote workers may not be ergonomically sound and can lead to musculoskeletal issues. BDO’s ergonomic assessments are a key part of its disability prevention and return-to-work strategies and are offered to employees returning from disability leave or as part of workplace accommodations.

At the Healthcare of Ontario Pension Plan, employees currently divide their time between home and the office. The disability accommodation process is similar in both cases, says Laura Carter, former associate director of benefits at the HOOPP. “Our priority when they’re in the office is making sure they have what they need to work comfortably and we’re not presenting them with any barriers there. [For employees being accommodated at home], we work with our corporate physician to understand the medical restrictions there and the items or the resources the employee needs.”

Read: Expert panel: How hybrid, remote working can impact employee health, disability management

However, as many employers seek to return employees to full-time onsite work, accommodations in a remote work setting may pose a challenge to these mandates, says Michelle Ashworth, assistant vice-president of disability management at Aon.

“Employers are receiving medical notes that will say an employee has to work from home, which doesn’t give them a lot of information. Employers really need to understand the functional restrictions and limitations and the duration of these accommodations so they can decide whether it truly needs to be a remote accommodation.”

In these arrangements, she notes, communication remains key. “Employers should treat [employees on remote accommodation] just like any employee who would be in the office and making sure there are those regular check-ins and that they’re adjusting the pace of work. . . . It goes back to those restrictions and limitations, as well as the reason the employee is being accommodated at home versus in the office, such as proximity to a washroom or medical supplies.”

An ounce of prevention

When the 2025 Benefits Canada Healthcare Survey asked plan sponsors about the importance of the benefits plan to their organization in today’s economic environment, a quarter (26 per cent) indicated their plan is important because it reduces the number and/or duration of disability claims.

At Ontario’s Workplace Safety and Insurance Board, employee benefits are part of a proactive approach to reduce or prevent disability leave, says Rose Lo, the organization’s director of total rewards. She cites offerings such as the WSIB’s employee assistance pro-gram, mental-health resources and wellness programs that focus on fitness, stretching and meditation. These resources can also help in the disability management process, she notes, because employees still have access to all of these programs during a leave.

Read: Supporting employees with chronic, complex conditions helps manage benefits costs

The organization also provides employees with wellness days that can be taken for medical appointments, mental health and self-care, says Lo. If an employee books four or more consecutive wellness days, she adds, the WSIB will check in on them to determine if the employee needs additional support.

The HOOPP provides employees with preventative wellness resources to mitigate the risk of chronic health conditions. These include an annual biometric screening clinic where employees are provided with their base-line health data within a few minutes at the office. Similarly, the organization also focuses on mental health through regular discussions and training.

BDO’s benefits offering includes a virtual health-care portal and online mental-health platform. Its STD leaves increased in duration by 13.6 business days in the first quarter of 2025 compared to the same period in 2024, while LTD claim durations decreased by 2.6 months. reflecting more comprehensive support. LTD recurrence rates remain low, with only one or two cases annually since 2022, says Evans.

Many employers are expanding the range of mental-health practitioners covered under their benefits plan, says Hurley, another practice that can contribute to reducing disability leaves. “They’re not only enhancing the dollar value or the allotment that each employee and their family member is able to have, but also expanding the definition of ‘mental-health practitioner.’”

New technology

As part of its holistic approach to disability management and employee well-being, the WSIB recently launched a chatbot to assist employees with questions about their benefits plan, including disability leave.

Read: 2022 Mental Health Summit: The importance of early intervention in improving plan members’ mental health

“[Employees can ask], ‘What resources are available?’ or ‘Who is the proper contact person?’” says Lo. “It really helps improve the employee experience at a time when they need support. With the chatbot, the answer is right in front of them.”

On the administrative side, technology such as digital claims management platforms have also seen increasing uptake in recent years, says Nini. “More broadly, everyone is focused on employee experience and making it easy for the physician, the employer and the plan member to provide what-ever forms are needed in the process.”

BDO’s disability management dashboard has enabled the organization to streamline processes, improve communications and offer more personalized sup-port to employees on leave. “It’s integrated with our [human resources] system and includes a disability tracker that we use to track all of our leads, as well as payroll reports that can provide data to drive our focus on interventions,” says Evans. “Technology has become a cornerstone in our disability management strategy.”

Artificial intelligence is slowly making its way into disability case management, says Ashworth, noting the technology is being used to optimize the process for efficiency. “[AI isn’t] replacing the role of a case manager. Each claim and individual are unique and you need that human touch — it’s really there to augment the information the case manager has access to when they’re developing a case management plan, so they’re leveraging the knowledge, findings and outcomes of the thousands of cases that are being managed by that carrier.”

Blake Wolfe is the managing editor of Benefits Canada and the Canadian Investment Review.