Experts: Don’t Overlook Disability Benefits

Rising health care costs and a tough economy can make health care benefits a primary focus for employees during benefit enrollment time. But experts advise that income-protecting benefits, such as life and disability insurance, deserve some attention, as well.

According to a new report by Prudential, workers are expressing interest in life (83 percent), disability (66 percent) and long-term care insurance (21 percent) this enrollment season.

“While the life insurance enrollment rate is reassuring, many Americans are not electing sufficient coverage to maintain their families’ standard of living in the event of an untimely death, or taking the time to really think through their benefit elections,” said Lori High, president of Prudential Group Insurance, in a report by insurancenewsnet.com.

Disability can be a particularly hard sell for employers because many workers think they’ll never need it, experts say. A disabling condition, however, can spring from more than a fall at work, Barry Lundquist, president of the Council for Disability Awareness (CDA), told Kaiser Health News. While many people assume accidents are the main cause of disability claims, 90 percent of all claims actually stem from illnesses, including musculoskeletal conditions and cancer, Lundquist said.

The CDA noted in a 2010 poll that 30 percent of Americans entering the workforce today will become disabled before they reach retirement. Only about a third of American workers have some sort of disability insurance, Lundquist said.

Unfortunately, fewer employers these days are offering the benefit, according to a LIMRA study published by KHN. Only 47 percent of employers offer long-term disability benefits, the study found. Of those companies that offered coverage in 2010, only 37 percent paid the entire premium, a decrease from 49 percent in 2002. When employers don’t pay any of the premium, only 40 percent of workers elect the benefit, Lundquist said.

The need for disability coverage will continue to grow as the U.S. workforce ages, experts say. By 2050, people over the age of 60 will outnumber those in younger generations, according to a news report by the Society for Human Resource Management.

“Workplaces must be ready to accommodate these employees, or there will be more disability claims,” said Susanne M. Bruyere of Cornell University in a recent webinar.

While Bruyere said companies shouldn’t make broad assumptions about the health and productivity of older workers, she noted that statistically the rates of disability increase with age.

Bruyere called for better education of employers about how they can make accommodations for the disabled and aging. She also suggested that employers examine their policies and procedures to ensure that they can accommodate these workers.

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