U.S. Bureau of Labor Statistics<\/a> (BLS). Employers who integrate their health and disability benefits can improve their workforce\u2019s overall health by coordinating employees\u2019 care, allowing earlier interventions and decreasing workplace absenteeism.<\/p>\nTypes of Disability Benefits<\/h2>\n
Disability benefits can take many forms. While STD and LTD insurance are the most common, long-term care insurance, critical illness insurance, and paid leave programs are also types of disability benefits. Understanding the different types of disability benefits can help employers evaluate and determine which benefits to offer their employees.<\/p>\n
Short-term Disability Insurance<\/h3>\n
STD insurance replaces all or a portion of an employee\u2019s income due to a temporary disability. Under STD plans, employees receive a percentage of their income, typically 40 to 70 percent of their base pay, but employers can allow employees to supplement their STD benefits with paid sick leave or other benefits. An STD insurance policy is paid either fully or partially by the employer, and the median length of STD insurance coverage is 26 weeks, according to the BLS.<\/p>\n
To qualify for STD insurance, an employee files a claim under their insurance policy. The employee must prove their illness or injury qualifies as a disability under the plan\u2019s terms. STD insurance generally requires employees to wait for a short time period \u2013 on average, seven days \u2013 before they start receiving benefits to discourage abuse and because many employers\u2019 paid-time-off benefits cover shorter absences than those covered by STD insurance. While STD insurance plans do not guarantee job protection, employees may be entitled to it through their employers\u2019 policies or under state and federal laws, such as the Family and Medical Leave Act (FMLA).<\/p>\n
Employers who offer STD insurance benefit because it helps employees to remain financially stable while recovering from an illness or injury, allowing them to stay productive and focused when they\u2019re physically able to return to work. Since the income employees receive under STD insurance is paid by insurance companies, employers have the financial resources and flexibility to hire temporary or contract workers to fill workforce gaps without experiencing high labor costs. In states that don\u2019t require employers to participate in disability income plans, employers can offer fully, partially, or noncontributor STD insurance plans.<\/p>\n
Long-term Disability Insurance<\/h3>\n
LTD insurance provides employees with income for long-term illnesses and injuries. Employees generally receive 60% to 80% of their base pay; however, some employers\u2019 LTD plans offer more limited income replacement benefits. Similar to STD, employees receive income benefits until they\u2019re able to return to work or have exhausted policy limits. LTD benefits requirements tend to be more rigorous than STD because workers need to demonstrate they\u2019re unable to perform any job, not just the job they were working prior to the illness or injury.<\/p>\n
These plans often work together with STD, so when an employee exhausts their STD benefits, LTD benefits continue to provide the employee with income. As with STD benefits, LTD does not provide workers with job protection. Employees who become permanently disabled may continue to receive LTD benefits through their retirement date or until they\u2019re eligible for Social Security disability benefits.<\/p>\n
Long-term Care Insurance<\/h3>\n
Long-term care insurance provides employees with coverage to treat chronic illnesses and disabilities outside of a hospital when individuals can no longer care for themselves. These policies cover services such as home health care, nursing home care, hospice care, assisted living facilities care, and respite care. Long-term care insurance can help employees safeguard their financial futures. Employers tend to offer this benefit to help their aging workforce.<\/p>\n
Critical Illness Insurance<\/h3>\n
Critical illness insurance gives employees a fixed lump-sum payment after being diagnosed with an illness that\u2019s covered under the policy. These policies may cover conditions such as kidney disease, stroke, heart attack, and cancer. Payments are made directly to the employee and can be used to cover deductibles, co-payments, household expenses, and other costs. Critical illness insurance premiums are typically paid by employees.<\/p>\n
State and Federal Disability Benefits<\/h3>\n
In some instances, employees may be entitled to disability benefits under state or federal law. For example, the FMLA provides eligible employees of covered employers with up to 12 weeks of unpaid, job-protected leave for certain family and medical reasons. Under the Americans with Disabilities Act, employers must consider providing disabled employees with reasonable accommodations. Leave from work may be an accommodation as long as it\u2019s reasonable and doesn\u2019t create an undue hardship for the employer. Employees who experience work-related injuries and illnesses resulting in a disability may be entitled to workers\u2019 compensation benefits. Such benefits are mandated in most states and provide employees with wage replacement and medical benefits. Additionally, the SSA provides disability benefits to workers as long as their disability will last for at least 12 months.<\/p>\n
Several states have enacted their own leave-related laws, many of which provide injured or disabled workers with job-protected leave. Employers should consult with local legal counsel to discuss any state-specific disability or leave requirements.<\/p>\n
Summary<\/h2>\n
Disability benefits can provide sick and injured workers with financial stability and peace of mind when they\u2019re unable to work. Understanding the different types of disability benefits \u2013 and their value \u2013 can help employers decide which benefits their employees need and desire. Offering these benefits can be a powerful tool to improve an organization\u2019s attraction and retention efforts.<\/p>\n
\u00a9 2023 Zywave, Inc. All rights reserved.<\/em><\/p>\nHelp with Your Benefits Administration<\/h2>\n
No matter what type of benefits you offer your employees, you need a streamlined, integrated way to manage them efficiently. The benefits administration module from isolved<\/a>, GTM’s human capital management platform, makes planning and decision-making easier for your employees. Set up your benefit plans once, driving enrollment and deductions throughout the system. Plus our solution offers powerful tools that provide you with reliable reporting, robust analytics, and customizable workflows. Request a free quote<\/a> to learn more.<\/p>\n","protected":false},"excerpt":{"rendered":"Offering disability benefits can be a powerful tool to improve an organization\u2019s attraction and retention efforts.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[232],"tags":[324,20,101,284],"post_folder":[],"class_list":["post-13674","post","type-post","status-publish","format-standard","hentry","category-gtm-biz-blog-isolved","tag-disability-insurance","tag-employee-benefits","tag-retention","tag-voluntary-benefits"],"_links":{"self":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts\/13674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/comments?post=13674"}],"version-history":[{"count":3,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts\/13674\/revisions"}],"predecessor-version":[{"id":13679,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/posts\/13674\/revisions\/13679"}],"wp:attachment":[{"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/media?parent=13674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/categories?post=13674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/tags?post=13674"},{"taxonomy":"post_folder","embeddable":true,"href":"https:\/\/gtm.com\/business\/wp-json\/wp\/v2\/post_folder?post=13674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"disability](\"https:\/\/gtm.com\/business\/wp-content\/uploads\/2023\/03\/pexels-yan-krukau-7693756-1024x683.jpg\")
Over the last few years, employers have been expanding their voluntary benefits offerings as a way to address their employees\u2019 needs and improve overall attraction and retention efforts. While voluntary benefits have become increasingly important to employees as they deal with challenges and increased financial pressures due to record-high inflation and the lingering impacts of the COVID-19 pandemic, knowing what benefits to offer can be difficult. Understanding the various types of disability benefits and why employees value them can help employers decide whether to include them in their voluntary benefits offerings.<\/p>\n