Coronavirus-related Sick Leave and Short-term Disability Payments Could Exceed $23 Billion for Employers Per Integrated Benefits Institute Analysis

OAKLAND, CA – April 6, 2020 – Health and productivity research non-profit Integrated Benefits Institute (IBI) conducted an analysis to help US employers understand the broader impacts of the COVID-19 pandemic. IBI’s assessment of potential sick leave wages, short-term disability (STD) payments and spending on employee benefits for absent workers could total more than $23 billion. Up to 5.6 million employees could be impacted, with almost 3 million workers at firms with fewer than 500 employees entitled to paid leave per the Families First Coronavirus Response Act (FFCRA) that went into effect on April 1, 2020.

IBI used employment, wage and leave benefit data from the US Bureau of Labor Statistics and lost workday experiences contained in IBI’s own 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.

“Employers and their disability insurance partners will bear substantial lost work time costs with STD claims estimated to take between 20-75% of the premiums collected in 2018 due to the growing number of US employees diagnosed with COVID-19,” said Thomas Parry, PhD, IBI President. “As the numbers change daily, these findings are a very conservative estimate of coronavirus-related lost work time costs and excludes costs pertaining to paid family leave which was beyond the scope of this analysis.”

(4.0M U.S. cases)
(8.0M U.S. cases)
(15M U.S. cases)
Employee cases 1.5M 3.0M 5.6M
   Small firms (<500) 789K 1.6M 3.0M
   Large firms 716K 1.4M 2.7M
STD claims 648K 1.3M 2.4M
STD wage replacements $1.2B $2.4B $4.5B
Total costs $6.1B $12.7B $23.3B

“One important thing to keep in mind is that however the pandemic plays out—whether that is 1.5 million infected employees, 5 million or something else—about half of employees at large companies won’t have the income protection afforded by disability insurance or FFCRA,” said Brian Gifford, PhD, Director, Research and Analytics for IBI. “Even if employees have some sick days to fall back on, on top of everything else, they’re going to lose about $2,000 in earnings if they contract coronavirus. That’s not only going to impact the US workforce, but also consumer spending when businesses try to restart after the pandemic.”

The analysis was conducted the week of March 30 when there were more than 188,000 diagnosed coronavirus case in the US, and confirmed cases were increasing by an average of 30% per day since the steepest uptick began on March 17, 2020. At that rate, without significant successful efforts to slow or stop the rate of transmission, the US will diagnose its 4 millionth case around mid-April 2020. The estimates represent 10% to 20% of the coronavirus testing and treatment costs reported by Covered California under similar scenarios.

An infographic with additional details and a summary of the study are available on IBI’s website.

About Integrated Benefits Institute

The Integrated Benefit Institute’s independent research, industry-leading tools and data resources help companies link health-related programs to the outcomes that maximize the contributions of people to productivity and business performance. Founded in 1995, IBI is a national nonprofit research organization and business association serving 1,200 employer and supplier members and their 22 million employees. For additional information, please visit and follow us on Twitter and LinkedIn.

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