Disability Insurance Can Be An Important Part of a Pregnancy—But It’s Much More

Pregnant woman holding a baby

Disability insurance — also known as income protection coverage — is one of the most important and overlooked pillars of financial planning.

Think about it. The average person is so dependent on their ability to earn a living, they couldn’t continue their lifestyle if they missed even a single paycheck.

The Federal Reserve asked adults in 2016 how they would pay for a hypothetical emergency expense that would cost $400. This amount is approximately the cost of an unexpected car repair, appliance replacement, or medical bill. Forty-four percent of people said this kind of bill would be hard to handle, and that they either could not pay the expense or would borrow or sell something to do so.

When people buy insurance, most choose some form of health, life, car, and homeowners’ or renters’ insurance. All of these purchases have one common denominator; the premiums are paid with your income. When you think about it, it seems foolish to forget to insure the one thing that lets you pay for everything else — your paycheck.

The connection between pregnancy and short-term disability

There are many types of accidents and illnesses that prevent people from working for a period of time: back pain, depression, heart disease, cancer, auto accidents, and so on. Yet many people don’t think of having a baby when they think of “disability.” Yet pregnancy is the most common cause of short-term disability claims.

Women are typically paid eight to 10 weeks of disability benefits when they take time off to have their child (two weeks before their due date and six weeks afterward). The duration can vary based on cesarean-section deliveries or other conditions that may require the claimant to limit work activities or work exposure.

One of the major differences between pregnancy and other types of disability claims is predictability. The timing of pregnancy for many can be the result of planning. For a healthy woman, purchasing coverage through their workplace in anticipation of a planned pregnancy can be a fairly easy transaction. The key is that you buy coverage before you become pregnant. This way there is little risk of underwriting issues or denial of your claim due to a pre-existing condition limitation.

Pregnancy and long-term disability insurance

Most long-term disability insurance offered through your workplace will also pay benefits for pregnancy-related complications if you can’t work for more than 90 days.

If you purchase individual disability coverage through a broker or agent, most insurance carriers will cover complications of pregnancy if your policy has a waiting period of longer than 90 days. (The waiting period — also called the elimination period — is how long you have to wait to receive benefits after you become disabled from work.)

The advantages of continuous coverage

Some consumers will purchase disability insurance in anticipation of a pregnancy and cancel the coverage after delivery. It’s also not uncommon to see ex-participants re-apply while planning a subsequent pregnancy. While this purchasing pattern is not illegal or unethical, it’s a risky approach to insuring your income, and it’s certainly not a pattern that disability insurance coverage was designed to endure.

So, what is a win/win for the carrier and policyholder? Maintaining continuous coverage.

It’s important to remember that disability insurance is designed to protect you against the unexpected loss of your work capabilities due to an accident or illness. While pregnancy is a common reason to file a claim, you always have additional risk for many unexpected events.

It’s also important to remember that voluntary coverage that you buy at work is often subject to underwriting guidelines. Your ability to obtain coverage could change at any time if you have an accident or develop a newly-diagnosed health condition. Trying to time when you have disability coverage is similar to trying to time when you invest in the stock market, and could easily leave you uncovered at an inopportune time.

None of us are immune to accidents or illnesses. They can strike at any time. It’s important to make sure that you’re covered. And once you’re covered, it’s important that you stay covered, regardless of the original reason you applied for your disability insurance. Get it, keep it, and rest easy knowing that you planned ahead.




Why Disability Insurance Should Be Part of Your Paid Leave Strategy

Benefits are becoming a key differentiator in the job market. A 2017 report by the Society for Human Resource Management (SHRM) reports that nearly one third of organizations increased their benefit offerings over the past 12 months. The leading reason? To remain competitive in the talent marketplace.

Amid all the benefits being offered today, from pet insurance to unlimited time off, disability insurance remains one of the most critical forms of protection that employers can offer. Disability insurance protects someone’s ability to earn an income should illness or injury arise. At a time when emergency savings are shrinking and medical costs are rising, that safety net is becoming vital to an employee’s financial wellness.

Here are five reasons to consider offering this benefit to your workforce:

It’s the foundation of your employees’ financial security.

Without income protection the effects of not having an income become very real, very fast. An employee may not be able to pay their mortgage, their phone bill or contribute to their health insurance or retirement plans should a pregnancy, illness, or injury take them out of work for a few weeks or more.

Without it, the effects can be devastating.

By offering disability insurance, employers can avoid having the heartbreaking conversation about what to do after paid leave or sick leave ends (if it is even available). A 2017 CareerBuilder survey showed that nearly eight out of ten Americans are living paycheck to paycheck. Data from the Federal Reserve in 2016 showed that nearly half of consumers said they couldn’t pay an unexpected $400 bill without having to take out a loan or sell something. 

It retains talent.

Not only does short- and long-term disability insurance help people feel more secure in their jobs, your employees are also more likely to return to work if they have this coverage. SHRM estimates that replacing an employee can cost 60 percent of their annual salary — so retention has a major impact on the bottom line.

It’s affordable.

Data from the Bureau of Labor Statistics shows the average cost of providing both long-term and short-term disability coverage in 2016 was approximately 10 cents per hours worked, or $205 per year. In contrast, the average employer contribution to health insurance averaged $2.86 per hour worked, or $5,725 per year. 

It’s a family-friendly benefit.

Short-term plans typically cover two weeks before and six weeks after a routine pregnancy. Unless you’re one of the few employers who offer paid family leave, disability insurance is a critical financial benefit for women in the workforce. 

To learn more about how disability insurance works, visit www.RealityCheckup.org




Genetic Testing at Work

DNA strandsDo the rewards of genetic testing of employees outweigh the possible risks it presents to their financial stability?

This article by Carol Harnett, president of The Council for Disability Awareness, was recently published in Human Resource Executive.

I became intrigued with genetics in sixth grade. I still recall being fascinated when Mrs. D’Amato described Gregor Mendel’s work with pea plants that allowed him to unravel the fundamental laws of inheritance. Her introduction of the Punnett square, with its dominant and recessive alleles, and monohybrid and dihybrid crosses had me running home to decipher the keys to my ancestry with my parents.

Over time, I discovered that the MC1R gene was responsible for my red hair and freckles, and those traits, in combination with my blue eyes, placed me in the rarest of the ginger categories: a tribe that makes up less than 2 percent of the world’s population.

Genetics continued to grab my interest over the years, but that curiosity started to package itself with concern as more became known about human DNA. The first big pause I took to contemplate the impact of genetic information came when 23andme—one of the first direct-to-consumer genetic-testing companies—invited me to participate in a beta test.

It was 2008 and I was about to attend my first TED conference. The company invited the 1,000 participants to learn about their genetic profiles. I let the 23andme package sit on my desk for about a week. My internal debate revolved around whether I wanted to know if I had a genetic susceptibility for which there was currently no treatment. I finally caved in to my scientific interest, spit in the tube, sealed the envelope and overnighted my DNA to the company.

The results were anti-climactic. It turns out I have a remarkably solid set of inherited “wellness” characteristics. Or, at least I think I do.

The other traits the initial report listed (and still lists over the 10 years of updates) were laughingly off, including that I most likely don’t have freckles or red hair. And this gives me some pause as to whether my reported wellness variables are, indeed, correct.

I began to consider writing a column about genetic testing when someone passed me a copy of a survey of 14 disability carriers regarding whether they would pay the claims of women who underwent procedures associated with testing positive for inherited mutations of the BRCA1 or BRCA2 genes. (Approximately 72 percent of women who inherit a BRCA1 mutation and about 69 percent of women who inherit a BRCA2 mutation will develop breast cancer by the age of 80, while about 44 percent of women who inherit a BRCA1 mutation and approximately 17 percent of women who inherit a BRCA2 mutation will develop ovarian cancer by the age of 80.) Experts often recommend that women who carry these mutations consider both preventive bilateral mastectomies and removal of their ovaries and fallopian tubes by their mid-30s to early 40s.

There was wide disparity in the carriers’ responses to how they would process claims. Some considered bilateral mastectomies associated with a positive genetic test to be related to a pre-existing condition and, therefore, not payable. Others believed that preventive mastectomies related to a mutation of BRCA12 were elective procedures. As a result, the disability claim was not compensable under the elective-procedure provision. Still others would deny disability associated with subsequent breast-reconstruction surgeries under the elective-surgery and/or cosmetic-surgery provisions.

The range of answers and the logic applied by some providers regarding BRCA12 mutation carriers were shocking to me. But, there was a moment of hope when I reviewed a similar question asked about disability claims related to organ donation.

When I first joined the disability-insurance industry in the late 1990s, an organ donor’s disability claim was denied under the elective-procedure provision. Almost 20 years later, all but one carrier stated they would approve an organ donor’s claim—and the one carrier that wouldn’t pay the claim indicated it often made an administrative decision to approve the claim despite the contract.

As genetic testing becomes more common, I believe the carriers will rethink their positions (at least as it relates to women who learn they have genetic mutations after they enroll in disability coverage), or employers self-insured for short- and long-term disability will instruct the carriers or third-party administrators to pay these disability claims.

But here’s the catch that is up for debate: If people find out they carry a genetic mutation before they sign up for life, disability or long-term-care insurance, are they subject to denial of coverage due to a pre-existing condition, even though the genetic mutation may never “express itself?” The answer may be a qualified yes, depending upon the carrier and/or the state in which the person lives.

The Genetic Information and Nondiscrimination Act of 2008 prohibits employers and health-insurance companies from discriminating against people due to genetic information. However, when the act was passed, life, disability and long-term-care insurance were consciously omitted. This omission allows life and disability insurers to legally discriminate against people with genetic conditions or risk factors that predispose them to diseases—which brings me back to direct-to-consumer genetic testing.

There is a new trend among D2C companies such as Color Genomics, which wants employers and HR leaders to offer genetic testing to employees as an employee benefit. And while I, like many with my background, see the power of genetics as it relates to precision (or personalized) medicine, I’m incredibly concerned about how employers could inadvertently destabilize their employees’ financial wellness.

If employees do not currently carry individual life, disability or long-term-care insurance prior to participating in genetic testing, and they find out they possess a genetic abnormality, they may never be able to enroll in this coverage in the future. Even if you provide employer-paid life and disability coverage to your workers, if they leave your employment, they may not take their life insurance with them—and their disability coverage is not portable…

To read the rest of this post, please click here. 




What To Do When an Employee is Diagnosed With Cancer

Two business people meeting.The first week of April is National Young Adult Cancer Awareness Week. This is a good time to review your company’s policies toward accommodating both young and older employees alike who are being treated for cancer.

There is a high probability that someone in your organization will receive a cancer diagnosis this year. According to data from the National Cancer Institute, almost 40 percent of men and women will manage living with cancer at some point during their lifetime. Other studies show that some forms, such as colorectal cancer, are increasing for millennials and Gen Xers.

It’s critical that businesses develop a clear approach for these employees that balances workplace accommodation and business continuity with empathy.

Here are five key steps to keep in mind:

Explain the Benefits They’ll Receive

Receiving a cancer diagnosis can be stressful. If an employee you manage discusses their situation with you, guide them to HR first. They’ll need to know the benefits they can access such as health insurance, disability insurance, and flexible work options — as well as the steps they’ll need to take.

If you offer disability insurance, you will be providing a tremendous service to your employees by helping them receive a paycheck if they need to take time off work. The Health and Productivity Benchmarking survey for 2016 from the Integrated Benefits Institute shows that cancer is the second most common cause of long-term disability claims and the fifth most common cause of short-term disability claims.

There are also protections for workers that your business needs to honor. The Americans with Disabilities Act (ADA) requires employers to make reasonable accommodations for workers who have disabilities such as cancer and are able to work.

An employee may also qualify for family and medical leave protection under federal, state, county and/or city statutes, which can offer eligible workers up to three months of job-protected, unpaid leave per year. (The employee can request this leave on full-time, part-time, or intermittent basis.) And some employers go a step further and provide paid leave to employees for their own serious medical conditions.

Let the Employee Lead the Conversation About Disclosure

Employees will vary greatly in how — and whether — they want to share their diagnosis with you or their coworkers. (Workers are only required to give detail to the designated person in your company — or a third-party administrator — about why they need workplace accommodations.) Some people will appreciate having everyone know, while others will prefer to keep things confidential. This is a personal issue; it’s also a legal one. Employers need to protect medical privacy as outlined in the Health Insurance Portability and Accountability Act.

The manager should check what the employee would prefer, and help to facilitate the conversation. If they send out a memo on behalf of the employee, let them approve it first. If the employee prefers to not mention the diagnosis, have clear procedures in place so that everyone can be on the same page.

Ask Them What Support They’ll Need

An incisive article by executive coach Anne Sugar in Harvard Business Review encourages managers to take the lead in forming a work plan for the employee. Managers can do this themselves or identify a small team to work with the employee on the plan, so the workload is evenly distributed.

Cancer treatment often includes visits to treatment facilities and health care providers, so you will need to accommodate their time away from the workplace as well as time the worker might request to recover from procedures. Be realistic about this work plan. The HBR article points out that Anne Sugar expected to be out of work for six to eight weeks, but ended up being out for 12 weeks. She recommends creating a “Plan B,” so in the event that a more long-term recovery is needed, action steps are clear.

Establish a Point Person for Communication

If the employee takes time off on a full-time, part-time, or intermittent basis, identify who will be their main “point person.” This individual will funnel requests and communications, and ensure that your company is not taxing your employee with too much information. Bear in mind, however, that if an employee takes time under their FML leave, the employer should not check in on them regularly with the exception of letting the worker know when their leave will end.

Be Empathetic

Finally, in all of these encounters, lead with empathy and clarity. Garth Callaghan, an IT recruiter for a division of ManpowerGroup who went through various diagnoses within his job told the Society for Human Resource Management, “Don’t forget that this person is scared for their life. Be empathetic. Use words that show that you’re on the same side as the employee.”

By following these steps and planning a comprehensive action plan, your preparation will directly benefit the employee. It will also create a culture that is compassionate and well-informed.




5 Frequently Asked Questions About Disability Insurance

Woman with crutches sitting on a sofaDisability insurance provides critical financial protection to American workers. Yet it’s a highly misunderstood form of insurance. You probably have health insurance, home or renter’s insurance, and car insurance. But what about your need for income protection insurance?

Disability insurance pays you a portion of your income when an injury or illness takes you out of work for an extended period of time. It’s a critical form of insurance for most working Americans — because it means if you have to miss work for weeks or months at a time, you will have a financial safety net in place to help cover the bills.

Here are six frequently asked questions about disability insurance:

1. Do I really need it?

Most people hear the word “disability” and assume this form of insurance only applies to very serious injuries and illnesses — yet many common injuries (like fractures) or chronic conditions (like back, hip, or knee problems) can result in your not being able to do your job and earn a paycheck.

According to the U.S. Social Security Administration, more than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of some disabling condition before they reach age 67 (the normal retirement age). Will you have an ability to pay your bills if you need to miss work for several months? If you don’t have access to that much in emergency savings, or friends or family that can help pay your bills when you need to take time off work, disability insurance makes a lot of sense.

2. What’s the difference between short term and long-term disability insurance?

Short-term disability (STD) insurance plans generally protect your income for up to three or more commonly six months. Some plans can run even longer than that. Short-term plans typically cover between 60 and 70 percent of your pay, depending on the policy.

Long-term disability (LTD) insurance protects your income if you need to miss work for longer than three to six months. It usually covers 40 to 70 percent of your income. It costs more than short-term disability insurance because it’s a policy that will protect you for a significantly longer time. The time your coverage pays benefits will range depending on your policy. It can be for a specific period — ranging from two to five or ten years — or until your Social Security retirement age. The waiting period for most LTD policies is three or six months — so you’ll need a plan to cover costs before the payments begin (usually this time is covered by your STD plan or your savings.)

3. Does disability insurance cover all disabilities?

Every plan will have its own definition of disability, so you’ll need to review the definition in your particular policy. In general, many policies do not include the following disabilities:

  • A disability resulting from participation in a riot
  • Injuries which are intentional and a result of self-infliction
  • War or any act of war
  • Any period of disability during incarceration
  • A disability resulting from a crime in which the individual has been convicted
  • Pre-existing conditions (definition varies by policy)
  • For short-term disability: occupational sickness or injury (as this is generally covered by Worker’s Compensation)

4. Can I work part-time and still collect benefits?

Your insurance contract will specify if you can receive benefits while working part-time. Many policies allow you to work, but take the amount you earn and subtract it from your benefit. If your policy has a lifetime benefit cap, working part-time may extend the life of your benefits.

5. How much disability insurance should I get?

Insurance companies typically do not sell disability insurance policies which replace all of your income. But, they do sell policies which can replace up to 70 percent of your income. If your employer does not offer a disability plan with 70 percent coverage, you may want to look for supplemental insurance coverage to offset the difference.

One major benefit of owning your policy: When you pay premiums yourself, you are paying with after-tax dollars. Therefore, any benefits will likely be tax-free. Tax-free benefits paying 70 percent of your income comes close to being 100 percent of your take-home pay. If your employer pays the premiums and the cost is not included in your taxable income, then benefits will likely be subject to taxation.

A good rule of thumb is 70 percent coverage, but, as with all insurance needs, it depends on your circumstances and what you can afford. Regardless, seek out a qualified advisor if you need help crunching the numbers.

Disability insurance is a good idea

Just think how devastating the loss of income would be for you and your dependents. Then think how much worse it would be to lose the ability to earn an income. This is a circumstance you can avoid with proper planning and an action plan.




Why Small Business Owners Need Income Protection

Business owner outside his shopfront.Let’s face it, as a business owner, you’ve got enough to worry about. According to a recent survey by Paychex, 42 percent of professionals experience moderate stress levels on a regular basis — and money and work are key contributors to that stress. The Bank of America Business Advantage Small Business Owner Report in 2017 reveals that running a business is four times more stressful than raising children — and that one in five business owners have had a nightmare about their business failing.

One of the best steps you can take to decrease the stress levels, is to have a plan in place for the unexpected. Income protection does just that. Whether it’s disability insurance or business income insurance, it’s a way of mitigating risk and having a safety net for when life throws you and your business a curveball. 

Here are five reasons to get income protection:

Your Bills Don’t Stop When You Do

Accidents can happen at any time and illnesses both mild and serious can materialize out of nowhere. Your health insurance may cover the medical bills in the event of illness or injury, but how will you pay your bills if you need to take time off work for an extended period of time? Disability insurance helps you do this by offering insurance for your income. There are specific steps small business owners can take when signing up for disability insurance, such as having several years of proof of income at hand.

Beyond your own bills, you’ll also likely be responsible for the salaries of your employees and the costs of daily operations. Business overhead expense (BOE) disability insurance is a separate form of insurance that covers these needs. It’s typically a short-term form of insurance, lasting up to two years. Policygenius explains the essentials on how this works well as a complementary form of protection to long-term disability insurance.

Loss of Income Doesn’t Just Arise from Illness or Injury

You may experience a breach of either physical or digital property, such as a cyber security threat or a traditional break-in scenario. Or your physical location may suffer damages from a natural disaster such as a fire or flood. Business income insurance helps to offer protection for these types of challenges.  

Income Protection Is Affordable

Long-term disability insurance generally costs between one and three percent of your annual salary. When you break this down into a weekly premium, it’s may just be the cost of one business lunch a week. Yet the benefits, in terms of keeping your life on track should a challenge strike, are far-reaching.

It Allows You to Focus on Recovery

The key issue with income protection is that if you do become sick, injured, or find yourself dealing with a physical or digital challenge, getting back on track is that much easier when you’re able to pay all your bills during the recovery process. You can focus your time and energy on bouncing back from the challenge.

By protecting your income, you’ll be able to rest in the knowledge that operations will be able to continue and your own bills will be paid, even if you need to take some time out. It’ll give you peace of mind and help you grow a more resilient and adaptive business. 




The Impact of Chronic Pain in the Workplace

Woman holding her wrist.Chronic pain is affecting more and more Americans. A 2015 study by the National Institutes of Health’s National Center for Complementary and Integrative Health revealed that chronic or severe pain affects nearly 50 million American adults on a consistent basis. What impact does chronic pain have on the workforce, and how can your HR team better support these individuals? 

An Invisible Disability

Chronic pain is typically defined as pain which lasts for three to six months or longer. It is very often an invisible disability, which makes it very difficult for people to live with. They may need to take more sick days, or go through periods of time where their productivity takes a hit — and their fellow colleagues may not understand why. This absenteeism also has a financial cost. A 2013 survey by Gallup revealed that approximately $24.2 billion is lost annually in the professional sector as a result of absenteeism from poor health.

When someone needs to miss work due to illness or injury, impacts are felt throughout the organization. Other people may step in to take on the work, or a new hire may be trained up if their time off work is more substantial. At first your financial statements may not seem impacted, yet the Integrated Benefits Institute estimates that opportunity costs of disability can amount to an additional 38 percent of absent workers’ wages for the U.S. workforce. 

Helping Those with Chronic Pain

For HR directors or managers, it can feel like there is no clear approach to dealing with chronic pain in an effective manner. However, there are various ways to manage chronic pain in the workplace, and the importance of incorporating compassion into the process cannot be overstated.

Here are several ways you can support your workers:

Break Down the Stigma: One of the major barriers that people with chronic pain endure is the fact that it’s so often an invisible disability. People may not look like they have anything wrong with them, yet they are battling a very real illness. Be proactive in building a wellness culture in your organizaton. Take steps to eliminate barriers that might cause people to not seek help or explain what they’re dealing with, whether through educational meetings, personal sit-downs, or proactively checking in with someone whose productivity is dipping, to see whether there is a bigger issue at play.

Enhance Awareness of Treatment Options: Many people who suffer from chronic pain do so without knowing where to turn. By providing employees with information about effective treatment options, they can find the best plan for dealing with the pain. You can adapt the office environment such as incorporating ergonomic stations where people can work — and make sure that employees are taking their breaks. 

Offer Benefits Like Disability Insurance: The chances of someone having an illness or injury that puts them out of work for several months is higher than most people realize. According to the U.S. Social Security Administration, one in four of today’s 20-year olds will experience a disability before retirement age. Disability insurance is an affordable benefit that helps to protect an employee’s income if they do need to take time off the job — reducing the financial pressure while they recover. 

Chronic pain isn’t something that’s going to disappear from the professional landscape, but its impacts can be lessened with the right approach. By building a workplace culture that is open and inclusive, you’ll be able to support employees and boost morale across the organization. 




Best Disability Insurance Companies for Startup Employees

Startup team

Many people dream of starting a company or joining a startup. It’s your chance to make something of your own or to start on the ground floor of something important and potentially world-changing. It also offers the flexibility and culture many people value.

But there’s high risk with that reward. Startup founders and early employees often come from corporate jobs. They sacrifice pay and benefits for the prospect of building something great. One thing they need to focus on building? Their benefits package, including long-term disability insurance.

Why startup employees need disability insurance

It’s hard to get an exact count of how many startups there are, but it’s safe to say the answer is, “A lot.” AngelList, a company that helps connect startups to funding and talent, has more than 35,600 startups in its database.

As startups become a more popular form of employment, more people will find themselves with jobs that may not provide the financial safety net they need. One in four workers will become disabled before they retire. If you don’t have disability insurance, whether you’re a company founder or employee, you’re putting yourself at risk of not being able to make ends meet and potentially forcing yourself to have to go back to the corporate grind to get yourself on stable ground.

Startup founders

Founders are the lifeblood of any startup. They often set the vision and tone for the company, and take a position of power as the chief executive officer, chief technology officer, chief operating officer, chief financial officer or chief marketing officer. But they often don’t have the salary or benefits those positions come with at a more established company. Every bit of income and protection counts when a company is just getting off the ground.

If a startup founder becomes injured or ill, it becomes hard to keep up with bills. If that happens, they might need to find a job that’s more stable or has higher pay — that means giving up on their dream. With disability insurance, a founder has a financial safety net that will allow them to return to their company when they recover instead of working elsewhere just for a paycheck.

Startup employees

Most early startup employees have invested a lot in their education and development, whether they’re software engineers, product managers or operations managers. They need to protect their future income potential, especially when benefits are at a minimum.

Most startups choose health insurance as their priority benefit, for good reason. That still leaves employees to fend for themselves when it comes to retirement contributions, life insurance and disability insurance.

Startup employees may not be able to get the full disability benefit amount due to lower startup incomes. But if you work with an independent broker (like Policygenius), there may be discounts available if multiple employees sign up for disability policies.

 

Table

These sample rates are based on a male non-smoker from New York with a degree and income of $100,000. Your exact coverage will vary by your state, income, (or past income, which we’ll get to below) and other factors. You should talk to a licensed broker or agent to find the policy you need.

These policies are also based on a $5,000 monthly benefit, a 90-day elimination period and a benefit period to age 65. They are own-occupation, partial benefit, non-cancelable policies with a future purchase option and automatic increase benefit.

What startup employees need to know about disability insurance

As a startup employee, your income might be lower than what it was at a more established job, but it could also be higher in a few years if your company finds its footing. Still, there are ways to get affordable, comprehensive coverage.

  • Know how much coverage you can get: Your disability coverage is typically based on your income. But if you’re working at a bootstrapped startup, you might not be getting paid that much. How do you get enough protection? Some insurance carriers base the maximum coverage for startup founders on the founders’ previous job or their industry. That means you don’t need to necessarily base your coverage on what you’re actually making when you apply.
  • Have the right documentation ready: Keeping that in mind, it’s important to have the right paperwork to make things easy. To prove your benefit needs, you should have past tax returns or signed contracts ready. This will help carriers know you’re not over- or underinsured.
  • Look for discounts: Getting protected doesn’t need to be expensive. If three or more employees set up policies with the same carrier, you may be able to tap into discounts. This isn’t the same as a group disability policy offered by many employers. Those typically don’t provide adequate coverage, and they’re tied to your job so you lose the policy if you go elsewhere. In this case each person owns their own policy, but a broker can help you save on cost if there are multiple applicants. Think of it like buying in bulk at the grocery store.
  • Choose a future purchase option rider: Long-term disability insurance riders allow you to customize your disability policy so it fits your specific needs. Some come default on policies while others cost extra. An agent can help you figure out which ones you might need. One rider startup employees should consider is the future purchase option. This lets you increase your coverage amount down the line without needing to go through the underwriting process again, “locking in” your insurability. This is especially important for someone working at a startup, since growth can be faster than at established companies, allowing your coverage to keep pace with the potential increase in income.

This article originally appeared on Policygenius. The Council for Disability Awareness is an affiliate partner of Policygenius. 




4 Things to Know About Family Leave and Your Income

Mother holding a baby. Becoming a parent is an extraordinary and, at times, stressful endeavor. Your life is about to fundamentally change. And as you plan the myriad dimensions of this new reality, you may be wondering how you’ll cover all the bills while you take time off work.

Family leave is a complex issue and it requires a good amount of research. Begin by reading your employer handbook or asking a co-worker how they dealt with family leave and what they were offered. Consider what will work best for you, in terms of the time you’d prefer to take off work. If you do become pregnant, make sure you let your boss know before anyone else. Embrace it enthusiastically as an opportunity for growth. As Carol Walker, president of the consulting firm Prepared to Lead tells the Harvard Business Review: “Planning for your maternity leave is an opportunity to demonstrate to everyone that you’re in the game.” 

Here are a few ways you can replace your income during family leave: 

Paid Family Leave

This is the ideal situation of course, but don’t hold your hopes up too high. The National Compensation Survey (NCS) conducted by the Bureau of Labor Statistics, revealed that just 14 percent of civilian workers had access to paid family leave in 2016. There are a few states who are pioneering paid leave: These include California, New Jersey, and Rhode Island, and New York joined the group in January 2018. If you work in the tech industry, you could also be in luck: Tech companies offer some of the best family leave out there. Ask your HR team or boss if they offer this benefit. 

Short-Term Disability Insurance

Short-term disability insurance is another way to protect your income when you cannot work due to an illness or injury. This includes pregnancies — and it’s very commonly used for this purpose by employers. Short-term disability insurance plans often cover six weeks post-partum. It covers a portion of your income — normally around 60 percent. Several states such as New York, New Jersey, Hawaii and Rhode Island have short term disability laws in place. You can also purchase this form of insurance as an individual. 

Unpaid Family Leave

The vast majority of American workers don’t have access to paid family leave (88 percent according to the NCS study). So your next step is to see if you qualify for unpaid family leave — which keeps your job intact although it doesn’t offer a salary. The federal Family and Medical Leave Act (FMLA) was signed into law in 1993 and it guarantees eligible workers up to 12 weeks of job-protected, unpaid leave per year. FMLA does have its limitations though: it only applies to companies that have more than 50 employees within 75 miles of your workplace. You also need to have worked there for at least a year and put in a minimum of 1,250 hours. Laws around this also vary from state-to-state so you’ll need to research your local situation. FMLA applies to giving birth, adopting a child, or fostering a child — and it can also be used in the cases of caring for a spouse or parent with a serious health condition. There are ways of making it work while on unpaid leave—you just need to plan well.  

Paid Time Off (PTO)

Many people will use some of their PTO to cover their income for part of their leave. Your workplace may require you to use up your accumulated PTO before benefits can kick in. Others will allow the benefits to begin immediately, which may allow you to use some of your PTO to extend the length of time you can stay at home. 

Take the time to educate yourself on the benefits that apply to you. Know your rights and don’t be afraid to try to negotiate a better deal. If you are just starting to think about having a child, now is a great idea to build out a financial plan to help avoid the stressors down the line. With a plan in place, you can relax and enjoy the extraordinary gift of welcoming a new life into the world.




The Cost of Cancer – Planning for Survival

Jan-cancer-costs-imageNo one plans to have cancer. Aside from the shock and anxiety for the future a diagnosis brings, cancer also presents a financial situation that few people fully consider. Huge medical bills, on top of the typical expenses like college loans, mortgages, and car payments, can leave survivors concerned about their finances. Despite this, there are a variety of precautions and preparations that can be taken to limit the impact of a diagnosis from a financial perspective. The effects of cancer can certainly rear its head in many ways. However, with some additional budgeting, cancer patients can put their minds moreso at ease while heading on the road to recovery.

Types of Costs

Costs associated with cancer can present themselves in a variety of ways. A 2017 study from JAMA Oncology shows that cancer patients tend to spend upwards of a third of their income on medical expenses, in addition to their usual health insurance fees. One of the primary causes of debt is of course the presence of medical bills. From seeing primary physicians, specialists, consultants, and other healthcare professionals, each of these visits and additional tests can add up.

For relatively rare cancers like mesothelioma, finding a doctor that specializes in your specific diagnosis can mean traveling across the country regularly. While the main concern when undergoing treatment is of course seeing the specialist that is most likely to save your life, the costs associated with travel are rarely thought of. These travel expenses, from gas money to airfare, can quickly add up.

Not to mention, hefty prescription drug costs that often come out-of-pocket. As one of the fastest growing sectors of healthcare expenses, cancer patients can spend thousands of dollars for their required prescriptions. These medications come in addition to various treatment methods like chemotherapy, radiation, immunotherapy, and surgery. With often lengthy periods of treatment, these medication costs can put a definite financial strain on the patient and their family.

Debt from cancer treatment can also accumulate from a lack of income. If the treatment is aggressive, many patients are forced to leave their jobs to focus on their health and recovery. In a household that is used to having two incomes, the loss of that influx of money can certainly make an impact. If the diagnosis requires extended periods of time away from your profession, the patient may also come back from recovery to find that the work is no longer relevant or is done differently. This retraining period can be another obstacle altogether. In the case of older demographics, this can also deal a significant blow to retirement savings. As a result, cancer patients are around 25 times more likely to declare bankruptcy than those without cancer.

Even after the cancer patient has been through the final stages of treatment and is considered in remission, there are routine check ups to ensure that person stays healthy for years to come. All of the regular medications, treatments, and evaluations to keep cancer at bay will also come with a price tag. While beating cancer is clearly a blessing, this is an additional cost that many do not anticipate maintaining for the rest of their lives.

Solutions?

While it may be difficult to plan for cancer, there are some steps that can make the diagnosis less of a burden on the patient’s finances. Taking precautions with various forms of insurance and an emergency savings can go far to ensure the survivor and their family are protected. Health, life, and disability insurance are all small yet highly effective steps to take when planning for the future. It’s a great idea to establish a Health Savings Account (HSA,) which allows for contribution to a savings store for healthcare expenses directly from the person’s paycheck, before taxes. Even as a young person new to the workforce, taking out insurance and creating an account for health related expenses can be very beneficial and will keep your mind at ease for years to come.

If found in a stressful financial situation due to medical expenses, be sure to consider all of your options via financial assistance programs and debt service providers. There are a variety of professionals that specialize in debt management and refinancing that can help a patient through a difficult time as they start on the path to financial recovery. In the meantime, strict budgeting and monitoring income closely can allow for cutting down on what’s not necessary and saving where possible. Additionally, in certain cases like mesothelioma, the cancer victim may be eligible for compensation in a legal setting with the help of a specialized mesothelioma lawyer. Because this type of cancer develops due to exposure to asbestos, this may be an advisable route to explore if wrongfully exposed in the workplace.

Although talking about and planning for the future can seem daunting, taking adequate measures to prepare for the unknown can make all the difference when faced with a cancer diagnosis. Taking out insurance, saving for emergencies, and maintaining a tight financial ship will put a patient in the best position to focus on treatment and recovery. Battling cancer is difficult enough without having to worry about each added expense to save your life, but taking these precautions in advance will leave you and your loved ones prepared in case the unthinkable happens.