Where do Voluntary or Worksite Products Fit into an Employee’s Benefit Package?
No one enters the workforce thinking about how to prepare for an unexpected leave of absence or disability. But the odds of such an event are higher than you think.
Over a quarter of today’s 20-year-olds will experience a disability before they retire. That should be a wake-up call.
If not prepared for, a leave of absence can put American workers in a difficult financial position. According to a recent survey in Forbes, more than half (56%) of American adults say that they have less than $2,000 is savings while one-fifth (20%) claim to have zero in savings. So how can workers be more prepared?
Open enrollment – the period when employees can choose their benefit elections – presents an annual opportunity for employees with or without savings to think ahead and prepare for an unexpected life event. This includes short- and long-term disability coverage.
One issue holding employees back from selecting disability coverage during open enrollment appears to be a lack of awareness and understanding of how their benefits work. Inclusive of those with and without disability insurance, over half (55%) of employees say that they don’t fully understand their benefits, according to MetLife’s 2024 Employee Benefit Trends Study. This gap in knowledge presents a challenge for those looking for security in the event of injury or illness.
Once employees fully comprehend their benefits and coverage options, their outlook improves.
According to data from MetLife, 78% of workers say that because of the benefits they receive from their employer they are less worried about unexpected health or financial issues. Further, 71% of workers who own disability insurance say that their benefits package provides value for their money.
Those that might argue against disability insurance could see some short-term savings, but it represents a massive risk. For those that take a shortsighted view, the result could mean missing mortgage or credit card payments due to a lack of income during an absence from work, leading to long-term financial consequences.
In reality, it’s important for both employees and employers to have a thoughtful conversation around benefits, especially those benefits that protect employees when they can’t work.
Most employees expect this type of support from their employer. According to MetLife research, 64% of employees say their organization has a responsibility to support them with personal matters outside of work.
This presents an opportunity and a challenge for employers.
Here’s where employers and HR leaders can help: by being proactive and communicating with employees about the benefits of disability and long-term absence and the financial security that it can help provide.
Open enrollment represents an ideal time for employees and employers to address and mitigate unexpected financial risks posed by a long-term absence.
When employees are insured against disability, they put themselves and their families in a better financial position for whatever may come.
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