Benefits Basics for Employers: Understanding Disability Coverage
The words “employee disability coverage” are likely to draw some attention. For an employee, those words can be comforting. The employee feels relief in knowing that if they are injured, they will have financial help.
As an employer, you too believe in ensuring your employees have help if they are injured or ill. But you also have to ensure that your costs are reasonable. Disability coverage can account for one of the largest portions of your total benefits spend. That’s why understanding disability and disability coverage is important: it will help you make the right choices about the disability coverage for your company. It can also help you to control the costs of coverage.
So what is a disability?
Disability: a physical or mental handicap, especially one that prevents a person from living a full, normal life or from holding a gainful job.
Sometimes people become disabled on the job, and sometimes they become disabled when they are not at work. Here, we’re going to focus on non-work related disability, which is the coverage included in employee benefits plans (in Canada, every province has its own Provincial Workers’ Compensation Board for workers that are injured on the job).
There are two common types of disability coverages: short term disability (STD) and long term disability (LTD). Short term disability can last days, while long term disability can last years or even a lifetime. The difference is the timeframe of the disability.
Employee Disability Coverage
Disability coverage can be customized to suit the needs of your company. Gone are the days of having to choose cookie-cutter short term or long term disability coverage. GroupHEALTH can help you with coverage that is right for your company. Whether it’s traditional STD coverage (like Employee Insurance only or Employee Insurance top-up), GroupHEALTH’s industry-leading mid-term disability (MTD) coverage, or LTD coverage, there is coverage that is right for your company.
Long Term Disability Plans
Let’s focus on LTD plans as they can have the biggest financial impact on your employee benefits plan. First off – why is disability coverage so expensive? Well, if you make a claim, the insurance company is paying out a portion of the employee’s wage. This can last for years. That’s going to affect your rates. Or if you’re self-insured, it’s going to affect your bottom line.
As an employer, you want to look after your employees if they are disabled. But the financial aspect can be worrying – whether you’re just thinking of offering disability coverage, or if you are already providing it. Good news – there are ways that you can still provide the coverage, but also help contain the costs.
Disability Management Services
One of the best ways to support an employee on LTD and control the cost of the claim is with disability management services. That’s why we include these services with all long term disability plans. They’re from a third-party provider (Disability Management Institute or DMI) and they work.
DMI’s goal is to get the employee back to work as soon as they’re able: quickly and safely. This is the best approach for the employee, and for you, the employer.
DMI becomes involved with your ill or injured employee after just 5 days of absence. Their job is to get in contact with the employee early to help support them in their recovery and return to the workplace. The reason this is so important is that half of the employees who are absent from work for 6 months or longer never return to gainful employment. There’s no time to waste in helping the employee recover.
DMI will establish and maintain regular contact with the ill or injured employee. Because they’re an independent third party, they can also provide you with regular, non-confidential updates on the employee. This regular contact will help the employee feel connected to the workplace and know that their employer cares about them. DMI will also help with practical matters such as filling out paperwork related to claiming disability benefits or arranging medical appointments.
Return to Work
When it’s time, DMI will also create a return to work plan for your employee. The employee’s health is paramount – a return to work is only planned when it is safe for the employee. DMI will examine the workplace to determine options for modified duties or hours. Next, they’ll look at the employee’s current abilities and create a plan to marry the two. Getting an employee back to work as soon as they’re able will help reduce your claim costs; it’s also critical to helping the employee return to pre-disability health.
The longer an employee is off work, the more likely they are to develop a “disability mindset.” When this happens, the employee focuses on their disabilities, not their abilities. They may begin to falsely believe that they cannot do something because of their disability.
Making Disability Coverage Work for You and Your Employee
At GroupHEALTH we believe it is possible to provide your employees with great disability coverage while also controlling the costs for you, the employer. Helping shorten claim duration by including disability management services is one of the ways we’ll help you do it. Not only is it good for the health and wellbeing of your employees, but it’s good for you and the company you’ve worked so hard to grow. A safe and timely return to work is in everyone’s best interest.
Good Advice is Key
Would you like to explore how great disability coverage and cost control can go hand in hand?
Review your options with one of our licensed advisors on the phone or in-person or contact us for a comparison quote.