Why Provide Disability Insurance?
As a business owner, you naturally want to be able to justify every dollar that goes out the door. It’s a competitive market out there for your product or service, and every little advantage helps.
Most successful entrepreneurs, however, are keenly aware that the market for talented employees is also keenly competitive – and there’s a big difference in productivity between experienced, knowledgeable employees who have been with your company for years on one hand, and the new hire off the street, on the other hand.
If you want to keep your best talent, you need to be competitive with the market, of course. But you also want to protect your own best interests at the same time. In today’s market, providing quality protection against the threat of disability makes good sense not just for your employees, but for any business that cares to retain the best, most talented and productive workers.
Workers View Benefits as Important
Many surveys have demonstrated that employees place significant value on benefits. For example, according to the Glassdoor Employment Confidence Survey, 76 percent of employees rate their overall health insurance coverage as the most important employee benefit, beating even retirement plans in importance.
In addition, according to the Society for Human Resource Managements’ 2013 Employee Benefits report, more and more employers are offering long and short-term disability plans as part of their employment package. As of last year, 77 percent of employers provided long-term disability protection, while 68 percent provided full-time workers with short-term disability protection.
The momentum is clear: Group disability protection is rapidly becoming a standard offering for full-time employees. Meanwhile, as the Affordable Care Act takes hold, health insurance is going to become less and less of a marketplace differentiator for employers. Workers with pre-existing conditions don’t rely on their group plans to be able to get any kind of coverage at all, thanks to the prohibition on underwriting based on pre-existing conditions. And as the employer mandate kicks in, all employers except the very smallest will be forced to provide major medical, or pay big fines.
That leaves other insurance benefits, such as disability, at the top of the list of non-wage differentiators that keep applicants coming, and keep talent from walking away.
Benefits of Group Disability to the Employer
The opening paragraphs, above, make the case for a robust benefits package in general. Why is disability vital? For several reasons:
First, almost every worker who’s been around a few years knows someone who has been affected by an injury or illness that prevents them or a loved one from earning a living. In some cases, you can make the case with people in your firm – former employees who have had their lives disrupted by accidents or illnesses, and who have had to leave their jobs.
It’s therefore easy to “sell” the value of these benefits to your workforce, because workers can very easily see themselves in need of important income protection.
Second, providing a disability plan can help ensure your employees are at their most productive when working on your dime. Workers with access to a good short-term disability plan are less likely to show up to work already hurt, or to try to work through injuries because they need the money. Employees who work sick or hurt run the risk of further injuring themselves and in some cases endanger other employees.
For example: If a worker has no disability insurance, they may feel they have no choice but to show up to work – even if they are taking powerful medications such as codeine or oxycontin, both strong prescription painkillers – for an injury or illness they sustained off the job, and therefore not covered by workers compensation.
If they have an accident at work, however, they endanger you, your other employees, and themselves, and they certainly risk forcing your insurance premiums up.
If you provide a good short-term disability plan, that worker taking narcotic pain medication has the option to stay home and recover, without endangering anyone else.
Most people think of disability insurance as just a policy that replaces part of a workers income if he or she is injured or sick and can’t work. And that’s true, but that’s just the tip of the iceberg. Disability insurance companies routinely provide case managers and assistance to get an injured worker back on the job as quickly as possible. By coordinating therapies and advising both the worker and employer on adaptive technologies and reasonable accommodations, a disability insurance provider can be a valuable partner with a business in getting a productive, invaluable employee back on the job as quickly as possible.
In some cases, your case manager can help you design a solution so that an injured employee can work at home – minimizing time lost. This can also be important to protect a worker whose immune system has been compromised by chemotherapy, for example.
Disability vs. Workers Compensation
Remember, disability insurance and workers compensation insurance are different things. Workers compensation covers injuries incurred on the job, or as a direct result of work. Anything else is not protected by workers compensation. Your employees are vulnerable to all manner of illnesses and injuries on their own time – and small businesses frequently suffer when these workers do get hurt.
Buy Quality. The most successful disability insurance programs have been robust. Invest in quality benefits to build and maintain employee morale. Once one employee benefits, the others in the workplace will hear about it. Get the best benefits you can afford.
Educate Workers. Employees can’t value what they don’t know they have. Make a disability presentation part of your company orientation. And go over their benefits in regular training sessions and reviews.
Model Healthy Living. You can’t control what employees do in their off time. But you can point them in the right direction. Get good, healthy options in vending machines. Make healthy lunch options available. Have leadership model good eating habits. Provide access to one or more wellness programs, such as a gym membership.
Provide Incentives to meet healthy living goals. A paid day off for meeting a weight loss goal, for example, or gift cards. Provide a bonus to employees who maintain tobacco and drug-free status, or maintain a healthy weight. This can help you control your overall health insurance premiums.