The Council For Disability Awareness (CDA) and Life Happens nominated May as Disability Insurance Awareness Month in order to raise awareness about the importance of income protection. Statistics reveal that one in four of today’s 20 year-olds will become disabled before reaching age 67.

In the face of such an ominous statistic, why aren’t more Americans covered under some type of disability insurance protection? While the majority of large employers do offer some type of long-term care protection, why are employees not electing to protect one of their most valuable assets—the ability to work and earn an income?

The CDA’s 2014 Disability Awareness Study reports that the majority of working adults are aware of their disability risks, yet 57 percent of Americans remain without disability insurance and are vulnerable to losing their income due to a disability.

Although employers are not completely responsible for the low rates of U.S. consumers’ election in disability insurance, employers should be accountable for offering disability insurance to their employees, communicating to them their plan options, and one could argue, subsidizing the cost of a certain amount of coverage.

Employer’s responsibility

Offering disability insurance as a part of a comprehensive employee benefits package is a key method to attract and retain top talent. Currently, over 80 percent of large employers (with 100 employees or more) offer disability insurance as a part of their employee benefits offerings.

Not only is disability insurance almost expected to be a part of a reputable employer’s benefit package, it is also a family-friendly benefit, as short-term disability plans typically cover up to six weeks for routine pregnancy. Furthermore, should a permanent, essential employee become disabled, having disability insurance to support their medical care and finances during their recovery increases the likelihood that they will return to work. When dedicated employees work hard for their employers, it is almost a duty for employers to contribute finances to assist employees in their time of need. Offering employer sponsored disability insurance is an easy way for employers to achieve this aim and to show employees they are valued. Plus, it is an inexpensive use of benefits dollars in comparison to other lines of coverage.

Uneducated leads to under-covered

Failure to truly understand the costs associated with disability insurance, the different levels of coverage and plans, and the general awareness of the implications of not protecting one’s income with disability insurance are among the top cited reasons as to why Americans do not purchase disability insurance.

Employers who do not offer disability insurance to their employees, whether subsidized or not, should seriously consider adding it to their comprehensive benefits package, as it can boost employee retention, employee-loyalty, and help contribute to employees’ financial security—all investments in the human capital of the company.

Employers who do offer disability insurance have a responsibility to communicate to their employees their disability plan options, the short-term and long-term income replacement percentages, and the factors used to assess premium amounts in order for more employees to purchase coverage and make knowledgeable decisions about how much they should purchase.

While the 2014 Long Term Disability Claims Review reveals that more employers are including disability insurance plans in their benefits offerings, fewer employees are actually electing to purchase coverage.

Technology breaks barriers

Even though disability insurance may be a part of an employer’s product offerings, with so many employee classifications, open enrollment and qualifying life event elections to manage, and, of course, reporting, printing, and mailing of compliance and notification documents, it becomes nearly impossible for HR staff to provide personalized, employee-specific information and correspondence.

Clearly, employees are simply not receiving the information or instructions required to make the correct disability insurance elections.

Brokers, agents, insurance providers, and employers should take into account which sources of information consumers trust. The CDA reports that 90 percent of wage earners trust their employer for financial and insurance information.

Understanding the critical nature of offering a comprehensive benefits package and delivering necessary employee communications, and given the ever-changing government regulations (think ACA), employers are quickly implementing robust technology solutions that automate multiple HR benefits transactions, as well as enable them to provide a unique employee enrollment experience where communication and education are top initiatives.

Benefits administration technologies not only provide chief advantages to employers, but simultaneously resolve numerous, complex human resources issues surrounding employee benefits packages and administration.

Employers are able to customize their product offerings, select their carriers, and even differentiate an unlimited number of employee classifications that allow employees to select from an a la carte benefits plan. Employees make their elections online through a corporate-branded website and can even print out their benefits confirmation statement (BCS) immediately upon completing the enrollment process.

The true power of benefits administration technology is in the administrative features. HR departments are able to customize and send both employee-specific emails and bulk emails regarding enrollment instructions, plan types, coverage amounts, or anything they feel will help an employee to make knowledgeable benefits elections that are right for them.

Some vendors are going a bit further to offer a full-service benefits administration technology outsourcing solution. For example, some offer COBRA Administration and ACA reporting integration, along with a full contact centers and telephonic enrollment so clients’ employees can call with questions, make or change benefits elections, and receive expert advice on their benefits options.

When the onus is on employers to not only offer competitive benefits packages, but provide employees with rich benefits communication and manage numerous benefits administrative transactions, the only solution is technology that integrates multiple benefits administration services.

As employers lead employees to purchasing income protection, like disability insurance, through robust, innovative employee benefits administration technology, more Americans will be better protected with supplemental income and more prepared for sustainable independent living should they need it.

Instant Insights /

Disability Awareness Month helps promote communication between brokers and employers

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