You hoped it would never come to this. In 10 years of business, you have never had to face this problem. And now that you’re here, you’re unsure what to do. You’ve just learned that one of your star employees is hospitalized after a skiing accident. They won’t be able to come into the office for several weeks. In fact, they won’t be going anywhere anytime soon.
Without the ability to work, they’re left without income—and you’re left with a gap in your team and a morale problem. Everyone loses.
If you had just sprung for the disability insurance, you could have prevented this scenario from spiraling out of control. You feel bad you can’t support your employees when they need it most and worry about what this might do to your business.
If you’ve never considered offering disability insurance as part of your benefits package, now is the time to rethink your strategy. Let us explain.
What Is Disability Insurance?
Think of disability insurance as a financial backup plan for your employees. If an illness or injury stops them from working, this coverage replaces a portion of their income. It acts as a financial safety net for employees who can’t work due to illness or injury. It covers essentials like rent, groceries, and medical bills while they recover. For employees, it is a lifeline during times of distress.
For businesses, it’s protection against employee turnover and productivity loss. It also helps you stand out in a competitive hiring market.
Disability comes in two flavors: short and long-term.
- Short-term disability insurance covers employees for temporary conditions, typically lasting up to six months. It’s about keeping the lights on, the fridge stocked, and your peace of mind intact. Think maternity leave, recovery from surgery, or a short-term illness.
- Long-term disability insurance kicks in after short-term coverage ends, providing income for employees experiencing severe conditions. It covers employees diagnosed with cancer, mental health conditions, stroke, or chronic pain who may be unable to work for months or years.
Why Should Employers Prioritize Disability Insurance?
Offering disability insurance isn’t just about being a good employer (though that’s important too). It’s a strategic business decision that can have lasting benefits for your company.
To Attract and Retain Top Talent
Today’s job market is competitive, and candidates pay close attention to benefits packages. Your disability insurance offers employees stability and security, knowing that no matter what curveballs life throws, they’ll have a paycheck. Showing potential hires that you’re invested in their well-being long-term can set you apart from the competition. It also fosters loyalty and job satisfaction, which can help you retain talented employees you have.
To Boost Employee Productivity
When employees know they’re supported in the face of life’s unexpected challenges, they’re less likely to worry about the “what ifs” and more likely to focus on their work. Providing disability insurance creates peace of mind that translates into higher engagement and productivity.
To Reduce Turnover Costs
Replacing an employee is expensive when you factor in the cost of recruiting, training, and onboarding. Not to mention the effect it can have on the rest of the team. By offering comprehensive benefits, including disability insurance, you can reduce the risk of losing valued team players to competitors with better packages.
To Demonstrate Company Values
Including disability insurance in your benefits package reinforces your company’s commitment to employee well-being. It strengthens your reputation as an ethical, caring employer and fosters a positive workplace culture.
What About the Cost?
Yes, everything comes at a cost. However, many disability insurance plans are surprisingly affordable. The amount you pay in premiums will depend on factors like the age, health, and coverage needs of individuals in your organization. When compared to the potential losses you expose your business to by not having insurance, the cost is minimal. Think of it as investing in your company’s future and peace of mind for your employees.
Companies that choose not to offer disability insurance can face expensive legal liabilities, too. Imagine the fallout if an employee were injured on the job and sued the company. Sure, you could take a hit financially. But it could also tarnish your reputation, leading other employees to reconsider their choice of employers.
What Should Companies Consider When Choosing a Plan?
While all disability insurance fills the same need, you have many plan options, and none are one-size-fits-all. When choosing a disability insurance plan, it’s essential to think about your company’s goals and budget. Here are some key considerations:
- Elimination Period: Decide how long employees must wait before benefits begin. Shorter elimination periods mean higher premiums but faster support for employees in need.
- Coverage Levels: Determine the percentage of an employee’s salary the plan will replace. Common options range from 50% to 70%.
- Plan Add-Ons: Consider riders like cost-of-living adjustments or supplemental coverage for high-income earners.
If you are unsure how to balance employee needs with plan costs or whether the plan you are considering is competitive, contact a benefits broker. They can help you navigate these decisions and find a plan to meet your organization’s unique needs.
The Bottom Line
Disability insurance isn’t just about preparing for the worst—it’s about protecting your best. By protecting your team, you create a more stable, productive, and engaged team. You also make a statement that you’re a company that values employees. Even if you don’t use it, disability insurance can pay dividends in recruitment, retention, and overall performance.
Ready to take the next step? The Benefit Doctor can help. We pride ourselves in helping companies design custom benefits packages that are beneficial. We build benefits packages on a solid, sturdy foundation of insurance that protects an employee’s paycheck first and foremost. Let us help you explore disability insurance options and choose the best plan for your business. It’s time to invest in your employees and your company’s future.