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Voluntary Short-Term Disability Insurance Needed Now More than Ever January 5, 2009

Posted by Austin Baker in employee benefits.
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Now more than ever as American’s are watching their pocketbooks more closely is the time to consider what would happen if no income were flowing into your pocketbook. Many employees are considering the effects of being laid off, yet ignoring the reality that a more devastating and unexpected financial blow could come first. Many American workers don’t realize how an injury or illness can put their lifestyles, assets and even their children’s education at risk. Although health insurance may cover a majority of medical expenses that occur during a short-term disability, if an employee can’t earn a paycheck for a few weeks or months, how will he or she pay the mortgage, buy groceries or pay the heating bills?
You may think that long-term disability insurance is all the coverage employees need; however, there’s also a big need to provide employees with paycheck coverage if they have a short-term disability. With many companies cutting back on paid time-off and sick leave, employees who are disabled and can’t work for a short time can experience a coverage gap between when sick leave ends and when they qualify for long-term disability benefits. Having a voluntary short-term disability plan is one way employees can help insure their paycheck.

Features to Look for in a Good Voluntary Short-Term Disability Product
Paycheck insurance is important, but the top products offer even more. Here’s what you should look for when you’re shopping for a good voluntary short-term disability product:
Guaranteed Issue: With guaranteed issue, you can offer your short-term disability coverage with no health underwriting as long as minimum participation and eligibility guidelines are met.
Portability: Employees can keep the policy if they change jobs.
Partial Disability Benefits: Voluntary short-term disability products should provide partial disability benefits when employees who are totally disabled come back to work earlier. Employers and employees like this feature because employees can ease back in to work and still receive a partial disability benefit.
Definition of “Your Job”: Some new voluntary short-term disability products define total disability in terms of “your job” for the entire benefit period. Benefits pay when the employee isn’t able to perform his or her own occupation. Other products may not pay “your job” benefits or may only pay under an “any job” benefits definition.
A Variety of Elimination and Benefit Periods. Lastly, you need to be sure that the voluntary short-term disability product you offer fits with the employer’s benefit program. The benefit period should complement any group long-term disability plan your client provides. Find a short-term disability product with a variety of elimination periods that will work with any paid-time off or sick leave program a client may have. For example, if a client provides four weeks of paid time off, it doesn’t make sense to recommend a voluntary short-term disability product that starts paying benefits after two weeks of disability.
Comprehensive Benefits Communication: Effective benefits communication plays a key part in helping answer employees’ benefits questions so they can make better benefits decisions. Employees need to understand their whole benefits package, especially where they may have coverage gaps and particularly in the area of disability coverage. Many employees think their sick leave will cover them until their long-term disability kicks in; however, that’s not always the case, and employees need to be aware of any disability coverage gaps. You may want to partner with an experienced worksite marketing benefits professional who can provide comprehensive benefits communications for you and your employees at no cost.

Help your employees protect their most valuable asset—their income. Add a strong voluntary short-term disability product to your employee benefit program.

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Benefits Solutions to Health Insurance Dilemma December 24, 2008

Posted by Austin Baker in employee benefits.
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Rapidly rising health care costs and the plight of the uninsured have reached the status of nearly daily mention in most news media. As health care costs continue to increase, many businesses are moving toward high-deductible major medical plans in an effort to better manage benefits program costs. Yet this approach can put employees at greater financial risk, forcing them to pay the expanding difference between what their health insurance covers and what their medical care costs. In addition, premiums for employer-sponsored health insurance have been rising four times faster on average than workers’ earnings since 2000.1
While that’s bad enough news for workers with health insurance, it’s a potential disaster for those who don’t have health coverage to help buffer these costs. A recent Census Bureau report estimated 47 million Americans have no health coverage.2 Still more worrisome is the fact that most uninsureds belong to a family with at least one working member. 3
The good news is employers have access to two solutions to meet this health coverage dilemma:
 A voluntary supplemental health insurance plan can help fill gaps in coverage under a high-deductible major medical plan, such as increased deductibles and out-of-pocket maximums.
 A group limited benefit hospital confinement indemnity insurance plan for employees who don’t have access to major medical insurance through their workplace or their spouse’s workplace.

Voluntary Supplemental Health Insurance
With voluntary supplemental health insurance, businesses can offer their employees a solution to help fill coverage gaps and protect employees against increasing out-of-pocket expenses. These products typically pay lump-sum benefits for medical expenses resulting from inpatient hospitalization and rehabilitation unit or outpatient services, diagnostic testing, doctor’s office visits and wellness checkups. For example, an employee who has to go into the hospital may have to pay a $1,500 deductible before health insurance kicks in — money the employee has to pay up front. With voluntary supplemental health insurance, the employee would receive a lump-sum benefit payment for the inpatient confinement and could use it to help pay for the deductible.

Group Limited Benefit Hospital Confinement Indemnity Insurance
This type of insurance is a group product that provides benefits to help insureds pay many routine, noncatastrophic health care expenses. It’s not major medical coverage, and it isn’t a replacement for major medical coverage. Offered through the workplace at group rates, this plan can meet the need for affordable, limited and clearly defined health benefits for full-time and part-time workers who don’t have access to major medical insurance and need some coverage for basic, routine medical expenses. Coverage is available for:
• Doctor’s office visits
• Outpatient diagnostic and lab tests
• Inpatient hospital stays
• Surgery
• Prescription drugs

With either plan, benefits communication plays a critical role in successful implementation. Consistent, clear communication through group and one-on-one meetings with employees helps ensure they understand what their plan covers and what it doesn’t. This leads to much greater satisfaction with the benefits plan. A quality voluntary benefits provider can deliver this service at no direct charge to the employer.
Rising health care costs and the resulting plight of the working uninsured are not likely to go away anytime soon. But innovative products like voluntary supplemental health insurance and group limited benefit hospital confinement indemnity insurance provide workable solutions for the health care cost issue.