09.25.2013

No Long Term Disability Insurance? Scary

Topics include:

A lot of employers are freaking out about the impending implementation of the Affordable Care Act. I

Want to freak out about healthcare? Freak out about disability insurance.
Want to freak out about healthcare? Freak out about disability insurance.

don’t quite get it, because most of my clients with more than 50 employees—those required to provide medical insurance to employees—already have a medical plan. But one thing does freak me out: Most of them don’t have disability insurance.

A lot of companies and employees never think about disability insurance

UNTIL an employee is injured or sick because of something not work-related. (Worker’s compensation takes care of it if it’s work related.)  What happens when someone is sick or hurt and has no disability  insurance in place?

 

These kinds of scenarios:

 

  • Employees exhaust sick and personal paid leave and then come to work unable to work fully but needing to earn the paycheck.  Productivity is low or nonexistent.  Other employees may be doing the work and picking up the slack.
  • Employers would love to help out long term and valued employees so they keep them on the payroll.  That creates a precedent and opens up the possibility of providing that to all employees in the future – which can get really expensive really quickly.
  • Employees intentionally injure themselves at the workplace in order to get worker’s compensation payments.

 

I have seen all of these scenarios in the past 2 years, really.  I am not exaggerating.

 

I’ve worked with companies that actually did offer disability insurance as an option, but most employees didn’t sign up for the extra premium. Companies shrug: What can we do? They’re grownups. But I’ve talked about this with many other HR professionals and benefits brokers and we all agree employees don’t understand the importance of long term disability insurance until they or someone they know has been sidelined by illness or injury.  Education can help. And the quacking duck on the television commercials offering supplemental insurance doesn’t count as education.

 

Most are more likely to think dental is the more important benefit after medical. After all, we visit the dentist twice a year for cleanings.  We think about long-term disability how often?  After it happens to our co-worker or our close family and friends or ourselves.  Then it’s too late.

 

Here’s another reason to consider employer paid disability insurance.   Yourself.

 

Individual disability plans are pretty expensive in comparison to group plans.  Business owners could literally pay the same to cover 10 employees on a plan including themselves as an individual plan to cover just themselves.

 

Still not sure?  Check out this blog post by an entrepreneur.

 

http://blog.42floors.com/the-one-hr-benefit-every-startup-should-add/#.UkLgShbxKbI

 

 

As always, we are here to help.

 

We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business. Contact me at Caroline@valentinehr.com or call (512) 420-8267.  

 

We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business, with offices in Austin, San Antonio, Dallas and Houston. Contact me at Caroline@valentinehr.com or call (512) 420-8267.