Long-Term Disability insurance (LTD) has been making headlines lately. According to The Wall Street Journal, although only 0.5% of federal disability recipients return to work, nearly 20% of workers with employer-paid LTD do. So with a success rate 40 times higher than that that of the government program, why is it that nearly 100 million workers don’t carry this benefit?
“There’s a coverage gap when it comes to disability, and educating [employees] is going to be important,” says Andrew Sullivan, SVP of Disability and Small Market Business at Prudential Group Insurance. He adds that worker awareness of their vulnerability to illness and accidents, and the availability of LTD will become increasingly widespread as more employers shift to 100% voluntary coverage.
The trend toward sharing the cost of coverage between employers and employees or having it paid entirely by employees depends on the quality of the enrollment support provided. One way of getting the younger generation of workers enrolled is to shorten the length of coverage, by letting employees choose how long they want to be eligible, say for two years, instead of until age 65. This approach can be especially effective because younger people often don’t believe that they’re going to get sick or have any accidents happen to them.
More and more employers are looking for reports and analysis of productivity and wellness programs to provide guidelines on how they can minimize or to prevent workplace-related disabilities.
According to insurance experts, widespread implementation of the Affordable Care Act over the next 18 months will have a significant impact on LTD and other voluntary benefits products.
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