Long-term disability insurance remains a widespread employee benefit
09/18/2013 9:34 PM
09/18/2013 9:34 PM
More than eight out of 10 employers offer group long-term disability plans to at least some of their employees.
The insurance, which provides a replacement income over an extended time for disabled workers, is fully paid for by three-fourths of the employers that offer such coverage.
Those findings come from a random survey of Society of Human Resource Management members taken this summer by Mass Mutual Financial Group.
At a time when employment-based changes to health care insurance are rampant, long-term disability plans appear to be a fairly constant benefits option. Only 15 percent of the employers surveyed said they were considering changes to their long-term disability plans.
For those who said they were contemplating changes, the most frequent possibility was increasing the benefit amount.
Eighty-three percent of the organizations said they believed they were providing an adequate maximum benefit amount to recipients. Those who said the amount was inadequate generally said that concerned their most highly compensated employees.
In the survey, answered by human resource professionals, long-term disability benefits were described as “extremely important” or “very important” by six out of 10 respondents. The human resource professionals generally thought that fewer than half of their employees placed a similar value on the benefit.
The survey also asked what percentage of base salary was replaced by the employer’s long-term disability coverage, plus any buy-up option offered to employees. The most common response was 60 to 69 percent of base salary, answered by 44 percent of the respondents.
The majority of organizations require their employees to wait 60 days before receiving benefits under the group long-term disability plan.