Month: November 2017

People are natural optimists. For most unthinkable situations the general response is: “it can’t happen to me”. In truth, disabilities can affect anyone ranging from mild to debilitating. Disability insurance is a type of protection paying a portion of income in case of disability. The majority of American workers lack disability insurance and many are unaware the coverage is available. LIMRA, a group of financial and insurance professionals conducted a recent survey on employee insurance protection. 65% of respondents recommended disability insurance for employees, yet only 48% felt a personal need. Of those, a mere 20% actually carried disability insurance leaving the vast majority at-risk in case of the unexpected.

The annual benefits open season is here. Disability insurance may be something to think about adding to benefits packages to add a safety net to coverage. As companies become more competitive with recruitment, this may be an automatic enrollment for many employees. Check with a human resources representative to see about automatic coverage; there may be new additions to benefits packages this season. Disability insurance may be less-glamorous than some other benefits out there yet the payoffs may far outweigh them. Disability insurance is a safety net for truly, often compensating up to 50-60% of annual revenue while disabled.

Individual policy protection will vary depending on the insurance carrier and company options. Many long-term disability insurance policies have a waiting period before taking effect, in some cases up to six months. For protection during this period, short-term disability policies fill the gap. A broken arm or illness can affect weeks or months of work and income yet cancers and musculoskeletal afflictions can last years. Most people lack the savings to support the lost income through this time.

According to the Social Security Administration, 25% of those entering the workforce will be disabled prior to reaching retirement. At one-in-four odds, chances are high enough to consider adding a layer of protection. A 2015 survey by the Federal Reserve Board found nearly half of Americans lack emergency savings. Asked about a hypothetical $400 emergency expense, 46% of those surveyed claimed inability to match that amount. Months or years of lost income due to serious illness or disability would likely cripple them.

A growing number of companies include disability insurance as part of employee packages. LIMRA states 41% of companies offer disability insurance with larger companies leading the way. Depending on the organization, this may be a voluntary option or paid incentive. For employees paying their own premium, the cost is generally affordable with annual costs as low as $250-$300. Employees paying a premium with post-tax income may have more coming in the future if a claim is filed. Employees paying policy premiums may qualify for tax-free benefit payouts in case of a claim.

The benefits of paying for a policy come with a catch, says Carol Harnett, president of the Council for Disability Awareness. She worries employees, when faced with a long list of insurance options, tend to skip disability coverage in favor of more-attractive or less-expensive options. The solution may lie in auto-enrollment into voluntary programs. Leaving it to the employee to opt-out increases participation up to 45% more than opt-in disability insurance programs. Enrolling early is recommended as more companies include health evaluations for coverage. Pre-existing health conditions may affect qualification for long-term disability insurance. Speak to an agent for more information on disability insurance and create a safety net for the future.

We’re always looking for new information on improving health and saving money. For more information on insurance options and protection contact an agent today.

The last two years have been a virtual health insurance battleground. The political fiasco surrounding the Affordable Care Act (ACA, or “Obamacare”) has many employees irked and asking where to look for health insurance protection. Entrepreneur Walt Rowen knows this all too well. Rowen owns a company engraving glass with over 70 employees and once switched from offering benefits, to referring employees to the health insurance exchange. Increasing premiums and an uncertain future lead Rowen to reclaim control, once again offering benefits through an umbrella program.

Employer-sponsored insurance protection is becoming once again popular. Health benefits are in high demand by the American worker even with the political turmoil surrounding them. Good employees are worth attracting. In a workforce where good talent is in high demand, companies aren’t willing to leave it up to the government. More companies are offering health benefits on their terms. In 2016 the Kaiser Family Members Foundation stated almost 96% of businesses with 50 or more employees offered coverage in 2014. By choice, almost 35% of businesses with less than 50 did as well.

In Rowen’s opinion, companies are unlikely to abandon health coverage completely. This would, in his opinion, likely lead to mass exits as employees find better alternatives; this is especially so in states with a weak Affordable Care Act market. Since the future of the ACA remains uncertain, the government is likely to continue enforcing companies with 50 or more employees to offer health insurance coverage.

The Trump administration pledged to continue working with Congress to write effective health care legislation. White House spokesperson Sarah Huckabee Sanders said the ACA mandated many people pay for services they were unable to afford. At present, the White House is considering continuing cost-sharing aid, a premium-reducing benefit. Take it away and it’s estimated premiums will increase and insurance firms will leave markets completely.

A poll by The Associated Press-NORC Center for Public Affairs Research found 61% of those surveyed opposed revoking the ruling, including 58% who identify as Republicans. Since World War Two, when Congress granted tax exemption to benefits, health coverage has been the national standard. Today nearly 90% of employees work for companies with health and wellness benefits, according to the Kaiser Family study in 2016. When dependents are included in that figure, nearly half of Americans are covered under employer programs.

William Kramer, executive director for national health policy for the Pacific Business Group on Health, agrees with Rowen that large companies must keep workers happy and would be unwise to cut benefits. This finding has many thinking it’s likely businesses will continue to. On top of that, reduced unemployment and a competitive workforce drive companies to offer benefits far beyond the ACA requirements. Even if the mandate to offer coverage is removed, experts suspect many companies will carry on offering benefits.

Glass company owner Walt Rowen said his decision to reinstate on medical insurance had less to do requirements. For Rowen, the decision to bring benefits back has more to do with staff retention and overhead expenses. There was a time when it made more sense to pay the fine, rather than pay for benefits. Packages are more affordable today, and the competition for good talent is strong. The turmoil and fallout from the ACA make it more affordable to offer benefits today than in previous years. For Rowen, the expenses involved are a worthy investment. He is sure if employees found a less-expensive plan, or a company offering health insurance where he wasn’t, staff would understandably take the offer.

We’re always looking for interesting information that may affect health and happiness. Call an agent today for any insurance-related questions.