11 minute read
Why Offering DI Can Transform An Employee Benefit Package
COVID-19 led employers and their workers to have new priorities in their workplace benefits packages.
By Scott Towers
Employers began rethinking their benefits packages after COVID-19 and related illnesses left many Americans too sick to work and loss of income became a reality for many workers. The pandemic threatened the financial security of these individuals and their families, leaving them uncertain how they would be able to afford the cost of living and medical expenses.
Both employers and their workers realized just how valuable disability benefits are for protecting financial wellness. In fact, a recent Harvard Business Review survey found 98% of employers plan to expand or offer new benefits, including disability benefits, based on the priorities of their employees.
Although the Integrated Benefits Institute reported employers and insurance carriers have paid nearly $11 billion in disability benefits related to COVID-19, employee access to disability insurance remains low. The U.S. Bureau of Labor Statistics reported that as of March 2020, only 40% of American workers had access to short-term disability through their employer and only 35% had access to long-term disability. In addition, the availability of these benefits greatly varied by wage group.
Considering that about 33 million Americans are COVID-19 survivors, and more than one in four have developed some form of long-haul COVID-19, disability claims are expected to skyrocket in the coming months and years.
Benefits brokers can help employers implement a comprehensive disability insurance plan and proactively relay the value of enrolling to all their workers. Offering quality disability benefits helps employers better support workers’ overall well-being by protecting them against lost income if they become disabled due to long-term implications of COVID-19 or another illness or injury. It also can help employers attract and retain talent.
As health and wellness became a focal point for many people following the events of 2020-21, workers now have higher expectations for their workplace benefits packages to better support their overall well-being. Randstand reported this year that nearly one in five workers changed jobs during the pandemic, and 30% of those who switched jobs did so for better benefits. These employees need to be aware of the preexisting condition limitation of disability benefits, which usually precludes coverage of disabilities resulting from preexisting illnesses that started anywhere from three to 24 months before the disability began.
As more individuals continue to navigate the long-term impact of COVID-19 on the future of their health, both physical and mental, having access to disability benefits can give workers peace of mind by providing a source of income replacement to help cover living expenses and health care costs if they become unable to work due to a qualifying disability.
Employers can also help control health care costs and make their disability benefits go the extra mile for workers by choosing a disability plan that integrates benefits with their medical plan. This improves the disability experience for workers by connecting them to care in simpler, more effective and more affordable ways. In addition to accelerating the disability claims process, an integrated plan gets benefit payouts to workers more quickly for qualifying disabilities. Integrated disability benefits ensure workers receive more personalized guidance and comprehensive care by allowing meaningful connections with both disability claims managers and health coaches. The close collaboration between case managers and care management teams ensures a worker who experiences a qualifying disabling illness or injury receives the right care, at the right time, and that all benefit programs included in the plans are connected for a truly transformative impact.
This collaborative expertise offers a faster, more reliable way to identify and manage chronic conditions that could lead to a qualifying disability, especially as it relates to the COVID-19 long-haulers or those with chronic conditions that were made more serious by COVID-19. The care coordination offered through integrated disability benefits can help workers proactively monitor and manage their chronic health conditions at all stages and moments of their unique personal health journey, enabling them to resume their regular daily life sooner and go back to work as safely and quickly as possible.
Supporting Total Person Care
Beyond protecting workers’ financial security, comprehensive group disability insurance can also support their behavioral and mental health through valueadded benefits that can be used without a claim, including counseling services, financial consultations and legal services.
These value-added benefits can make a huge difference for employees, especially considering the Kaiser Family Foundation reported 47% of adults are experiencing mental health issues as a result of the pandemic. As part of these additional benefits, employees can connect with licensed mental health counselors via phone or video chat or in person to help them cope with the long-term mental health impact of the pandemic and any ongoing stressors in their work or
Workers Are Going WITHOUT Disability Coverage
• 51 million working adults in the U.S. are without disability insurance. • 33% of workers in the U.S. have access to longterm disability insurance through their employer. • Around 41% of employers offer long-term disability insurance to their workers.
SOURCE: Council for Disability Awareness
personal lives. These solutions can help bridge gaps in care brought on by their new qualifying disability and help them adjust to changes in their everyday lives, which can help prevent burnout and improve productivity.
Options For Employers
When choosing a disability plan, it’s important for employers to be aware of the options available and select the one that best meets workers’ needs. Short-term disability insurance can replace a certain percentage of an employee’s income during a qualifying illness or injury of a few weeks or months, while long-term disability insurance provides income benefits for an extended period of time; many plans offer benefits until retirement.
Offering both short- and long-term disability coverage provides the best protection and peace of mind for employees, especially those who may be COVID-19 long-haulers and can experience qualifying debilitating symptoms for months. However, that’s not always realistic for all employers based on their budget, but there are still options for employers to offer a quality disability insurance plan without spreading themselves too thin.
If employers are not able to fully cover the premium, they can partially cover the premium and have the workers cover the rest through payroll deductions, or they can offer voluntary disability insurance and have the workers cover the full premium, also through payroll deductions. These options allow employers to choose a plan best suited to their budget while still offering disability benefits to protect workers. This also allows workers to choose the coverage that best supports their families’ financial wellness strategy.
Demonstrating The Value Of Disability Benefits
With the rise of chronic conditions among COVID-19 survivors both young and old, disability benefits are even more relevant to workers of all ages. The coverage and resources provided through integrated disability benefits are and will continue to be very attractive to workers as many individuals are still experiencing financial hardships brought on by the events of the past year. A qualifying disabling injury or illness could be devastating to employees and their families.
Offering integrated disability insurance and encouraging workers to enroll is a great opportunity for employers to show workers that their overall well-being is a priority to employers and help workers feel supported should they become not able to work due to a qualifying disability. Additionally, integrating disability and medical benefits can help control health care costs for both employers and employees, increase value and improve health outcomes for employees, reduce time out of the office, and serve as an effective retention and recruitment tool by showing current and future employees that they are valued and covered for every moment of health.
Scott Towers is president, specialty products, Anthem Blue Cross and Blue Shield. Scott may be contacted at scott.towers@innfeedback.com.
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Financial facts and figures powered by AdvisorNews.com
COVID-19 Shifts Retirement Plans For Many The COVID-19 pandemic forced many Americans to reexamine their financial, professional and personal lives. As a result, more
than one-third (35%) said the pandemic either moved up or pushed back their
target retirement age. Almost a quarter (24%) plan to retire later than previously expected, while 11% plan to retire earlier. That’s according to a Northwestern Mutual survey.
The youngest adults in the workforce — millennials and Generation Z — were most likely to expect an early retirement, with nearly 60% of that age group saying they plan to exit the workforce prior to reaching age 60. Overall, the average age people expect to retire is 62.6, down slightly from 63.4 last year.
For those who said the pandemic prompted them to delay retirement, 39% said they will wait three to five years to retire. But more than a third (35%) say their timeline for retirement has shifted back more than a decade. For those planning to retire earlier than expected, almost half (48%) say they are moving up their timeline by three to five years. WHY DELAY RETIREMENT? 55% want to work and save more money. 50% are concerned about health care costs. 24% are concerned about dipping into retirement savings. SOURCE: Northwestern Mutual
UHNW Investors Show Optimism
Citi Private Bank’s Private Capital Group surveyed family offices and ultra-high-net-worth investors and found what it called cautious optimism looking ahead to 2022.
Four predominant themes emerged: 1) concern on rising inflation, 2) the prominence of high cash levels in the face of a low-yield environment, 3) continued growth in portfolio allocation to direct investing opportunities and 4) a marked comeback in portfolio values year over year, despite a prevalent degree of macroeconomic uncertainty.
Although more than three-quarters of all respondents seek returns of 5% or more over the next 12 months, the outlook is more optimistic for family offices with AUM over $500 million, with 30% seeking over 10% returns versus 19% of family offices with AUM under $500 million.
Americans’ Investable Assets Up Nearly 50% From 2018
Americans have a whopping $67 trillion of investable assets, meaning advisors are fishing in a well-stocked lake. In fact, that figure is nearly 50% higher than three years ago, said Chip Roame, managing partner of Tiburon Strategic Advisors, in his annual research report on consumer wealth.
Unsurprisingly, retirement plan assets have grown nearly as well, doubling in 13 years to $29.9 trillion. Advisors and insurers are eager to take advantage of changes in the law that will make it easier to sell life insurance and annuities into these plans.
The shift to defined contribution plans is reflected in the assets, with $9.6 trillion now held in defined contribution plans. That figure was $3.4 trillion in 2008.
Consumer Households Investable Assets By Generation ($ Trillions)
Silent Generation
$11.4 $10.4 $8.4
Baby Boomers
$26.2 $34.3 $40.7
Source: Tiburon Research & Analysis
$34.6
Gen X
$9.2 $18.7
Millennials $1.6 $4.5 $10.5 and Gen Z 2017 2022 2027
Worries Over Future Market Crash Reach Highest Levels In 2021
Not everyone is optimistic about their financial future. After a summer of relative calm, Americans are increasingly worried about retirement risks related to market volatility, inflation and COVID-19, according to a study from Allianz Life.
DID YOU KNOW?
72% of survey respondents say they are concerned the rising cost of living will impact their retirement plans.
The study found that 54% of those surveyed in the third quarter are worried that a
big market crash is on the horizon. Compare that percentage with 45% in the second quarter and 52% in the first quarter.
As a result, more than one-third (36%) say volatility is making them nervous about their nest egg, and more than two-thirds (67%) say they are keeping some money out of the market to protect it from loss.
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