Since budgets and cost-saving measures are always on top-of mind for small businesses, you may be asking yourself— is group disability insurance actually necessary for my team? 

To help answer this question, let’s take a look at the purpose of group disability coverage, how it works and and whether or not it’s worth the investment. 

Jump To:

• What is Group Disability Insurance?

• How Does it Work? 

• What Does it Cover? 

• Is Group Disability Insurance Required by Law for Businesses?

• Why Group Disability Insurance Matters for Small Businesses

• How To Get Group Disability Insurance

What is Group Disability Insurance? 

Group disability insurance coverage works by replacing a portion of an employee’s income who isn’t able to work due to a non-work-related injury or sickness. Hence the name “Group Disability Insurance,” like group health or group life insurance, it’s typically offered by employers and covers multiple employees under a single policy. All in all, these policies provide workers with much needed financial support while they are recovering, so they can pay for medical bills, and support their families and lifestyle. 

Types of Group Disability Insurance

There are two main types of disability insurance that employers can offer, or employers can choose to offer both. These include:

• Short-Term Disability Insurance (STD): Coverage usually lasts for as little as a few weeks, up to 3 or 6 months on the higher end. The specific length of coverage that short-term disability offers depends on the policy. 
• Long-Term Disability Insurance (LTD): If offered, long-term disability works by kicking in after the short-term benefits end. The coverage for long-term policies can last for multiple years, or up until retirement age. Again, the specific length of coverage depends on the policy at hand. 

While both types of policy serve their own purpose, it’s important to note that more employers offering group disability insurance more commonly provide short-term coverage. Long-term disability is usually purchased on an individual basis to supplement short-term group coverage, and tends to be more expensive.   

How Does it Work?

If an employee suffers a qualifying disability, they first need to submit a claim to the insurance provider. After the claim is submitted, there is typically a “waiting period” that lasts anywhere from a few days to a few weeks. 

Once the waiting period is over, the disability plan starts to pay the affected employee a percentage of their salary. This percentage generally ranges from between 40% to 70%, and is paid until they recover and return to work, or until the benefit period ends (whichever occurs first). 

While the premium costs of providing group disability insurance are usually paid by employers, businesses can also offer it as a voluntary benefit. In the case of voluntary benefits, employees can choose to opt in if they wish, and the cost is deducted from their pay. 

What Does it Cover? 

Group disability insurance generally covers a wide-range of non-work-related illnesses and injuries. These include: 

• Illnesses: Including cancer, chronic conditions, complications from surgery and more. 
• Injuries: Including accidents and musculoskeletal disorders.
• Pregnancy and Childbirth Recovery: While these aren’t considered disabilities, some policies provide pay to women who experience complications or need extended recovery time after delivery. 

While the above are simply general outlines of what is typically covered, to get a full list of covered illnesses and injuries consult the Social Security Administration’s (SSA) “Listing of Impairments” also known as the “Blue Book.”

Lastly, it’s important to note that group disability does not provide employees with pay for injuries or illnesses that occur due to work-related causes. For work-related injuries and illnesses, a workers’ compensation policy is necessary to provide employees with payment during their time off. To fully understand the difference between the two types of coverage read, our article, “Workers’ Compensation vs. Disability Insurance.”

Is Group Disability Insurance Required by Law for Businesses?

Generally speaking, businesses are not required by law to provide disability insurance to their employees, but there are some exceptions. There are a handful of states that require employers to provide short-term disability benefits. These states are: 

• California
• Hawaii
• New Jersey
• New York
• Rhode Island

Why Group Disability Insurance Matters for Small Businesses

Without our employees, our companies wouldn’t be able to operate efficiently. While paying employees fair wages for the duties they perform is an important motivating and recruiting factor, it may not be enough if they are forced to take time off due to an unforeseen injury or illness. 

Providing group disability insurance not only shows your employees that you care about their well-being, but it also provides peace of mind that they won’t have to worry if they get hurt or sick outside of the workplace. 

If you’re still up in the air about providing group disability benefits for your team, consider the following:

• A policy enhances your overall benefits package at a low cost (most employers pay only $.15 per employee, per hour worked). 
• Employee morale and satisfaction is increased when offering disability insurance. 
• Employees are less likely to leave a company that offers a well-rounded benefits package that includes disability. 
• If an employee with disability insurance is injured, they’ll likely be able to return to work faster, since they can afford better care. 
• Offering disability insurance levels the playing field with larger organizations who usually always provide it. 

How To Get Group Disability Insurance

The decision whether or not to provide your team with group disability insurance may depend on several factors like your business size, budget and overall goals. While it’s ultimately up to you to determine if your business needs group disability or not, one thing’s for certain— it’s a smart move, and usually very affordable. 

Every employer wants to instill a positive company culture, but it shouldn’t just be in the office, it should extend into the personal lives of employees, and offering group disability coverage is a great way to do just that.

If you’re interested in finding out how much a disability insurance plan might cost for your team, or simply want to learn more, Group-Health-Quotes (GHQ) is here to help! Our user-friendly platform makes it easy to compare plans side by side, receive free, no-obligation quotes, and talk to trusted insurance agents at your convenience. 

To get started, just enter your ZIP code in the box to the right, or give us a call at (888)-571-0291 today!

The post Do Small Businesses Need Group Disability Insurance? appeared first on Group Health Quotes.

In this post, we’ll discuss what group disability insurance is, why you should consider offering it to your employees, and how much it costs. We’ll also provide tips for choosing a policy that fits your needs. So read on to learn more about the value this benefit can add to your existing package.

What is Group Disability Insurance?

Group disability insurance is a great way to attract and retain employees. This type of plan can cover a portion of income for you or your staff members in the event of serious injuries that prevent one from working. 

Group disability plans offer a safety net for employees who become totally disabled by providing up to 60% of their pre-disability income, up to $10,000 monthly. These resources can help ease the financial burden associated with an injury or illness and preserve business overhead expenses.

Jobseekers look for this benefit as peace-of-mind because no one plans on a life-altering injury. Many of your employees might be in serious financial insecurity if they get injured or sick unexpectedly, but disability insurance can help cover bills while they’d be able to focus on getting well enough to return to work.

How Does Group Disability Insurance Work?

Employees can opt in to your policy during your annual benefits enrollment period, or following a major life event such as just starting the job or getting married. Most commonly, employees decide to utilize this coverage for medical conditions like pregnancy, recovery from an injury, mental health conditions or serious illness. 

Group disability policies do not cover work-related disabilities. Note that receipt of other forms of disability income (e.g., workers’ compensation) may result in reduced payment from this policy type should one qualify to receive them both at the same time.

Long-term vs. Short-term Disability Insurance

Plans can be offered as short or long term coverage and some employers choose to offer both. After an elimination period, the time between a disability and when benefits start, pay benefits begin.

• Short-term disability insurance (STD) has an elimination period of 0 to 30 days, and employees can receive benefits for 3-6 months that are paid out weekly.
• Long-term disability insurance (LTD) has a much longer elimination period, 90 days or more and monthly payments can last for two to 10 years, or until retirement.

With both types of coverage, your employees can receive a maximum benefit up to 60% of their salary – with the exact percentage depending on the plan. Short-term disability kicks in at first while long-term benefits are designed to come into play if returning to work isn’t possible. Collectively these disability plans form an advantageous arrangement that offers financial protection to staff against illness and injury.

These plans can also be portable so employees can transfer coverage with them if they leave the company. Many employers choose to offer this benefit to their employees for free, but it’s important to remember the amount of the benefit received will be considered taxable income for them.

How Can Employees Qualify For Group Disability Insurance Benefits?

Group disability coverage offers substantial financial protection, but to qualify an employee of the company must meet certain criteria. At minimum, this includes seeing a medical professional for treatment and/or being completely incapacitated, also known as totally disabled, so as not to be able to fulfill any job duties.

For one to be labeled as totally disabled depends on whether the policy has own-occupation or any-occupation coverage. Own-occupation disability insurance covers individuals with disabilities who are still able to do some form of work, while any-occupation policies only pay out benefits when an individual is unable to perform in any job. It’s important to note that certain group disability policies may begin as own-occupation protection but could later transition into any-occupation after a predetermined period has passed.

Conclusion

In conclusion, offering reliable disability benefits to your employees is a great way to show them that their wellbeing is important to you. It shows you’re investing in them as both individuals and a team and that you value their contributions. According to a 2020 survey by the Employee Benefit Research Institute, only 48% of Americans say that they have enough savings to cover three months of living expenses. Your employees want these protections for themselves and their families, knowing that if something happens like an illness or injury, they’re not left with crippling financial hardship. 

With Group Disability Insurance, you can make sure your employees are covered when it comes to lost income and have the security of knowing all their needs will be taken care of should anything happen. Investing in disability protection doesn’t just benefit your most valuable asset—your employees—it also helps create a more productive, resilient and happy workforce for you. So don’t wait any longer. Take action now and ensure your workers have access to the right benefits!

Are you unsure about which employee benefits are best for your company? Contact one of our licensed insurance agents today for more information. They can help you find the right coverage for your business. 

Call (855) 687-6975  or enter your zip code in the bar above to get started.

The post Disability Insurance appeared first on Group Health Quotes.