What happens when a health event causes your income stream to run dry?

By Fred Schott, Director of Operations, Council for Disability Awareness

If you’re one of the millions of working Americans currently making decisions about your employee benefits choices for the coming year, you’ve probably put most of your focus on the health-plan options, including what is or isn’t covered, which providers are or aren’t in-network, and how much will you have to pay out of your own pocket to satisfy the plan’s deductible and co-pay/co-insurance requirements.

And that makes sense. Health insurance is your employer’s highest-cost benefit (other than legally required benefits such as Social Security, Medicare, unemployment insurance, and workers’ compensation). It’s also the benefit that probably was most important to you when you were looking for a job and the one that has the biggest impact on your current job satisfaction.

One important thing health insurance doesn’t cover

But health insurance has one important shortcoming – it doesn’t make up for the income you’ll lose if a health event like an illness, injury, accident or pregnancy keeps you from temporarily (or permanently) being able to do your job.

You shouldn’t underestimate the likelihood of something happening to you. A recent study using data from the National Health Interview Survey estimated that just over 10 percent of the working-age population has a health problem that keeps them from working or limits the kind and amount of work they can do (in other words, a work disability). A different research study estimated that more than half of US household heads will self-report some kind of work disability between the ages of 25 and 60 (your prime working years).

Dealing with a six-week disability

So let’s say you broke your ankle after slipping on a patch of ice, or you broke your leg in a car accident, making you one of the 5.2 to 6.6 million people who experience a lower-limb fracture each year. Your job requires you to do a lot of standing, walking around, and carrying—and that means you won’t be able to work while you’re recovering. Your doctor says you can expect to be laid up for six weeks, which isn’t at all unusual.[i]

You’re going to lose six weeks’ worth of income—and your health plan doesn’t cover that. What will you do?

Protections available through Family Medical Leave Act (FMLA)

First of all, here’s a bit of good news: If you work for a firm that has at least 50 employees, and you’ve been working there for more than 1,250 hours over the past 12 months, you almost certainly are covered by the federal Family and Medical Leave Act. And — as long as you can get proper certification that your fracture qualifies as a “serious health condition”[ii] under the provisions of the Act — that means two things:

  • All your benefits will remain in force while you’re out (although you might still have to make any required premium payments), and
  • When you’re ready to go back to work, you should be able to return to your old job or one nearly identical to it.

See the US Department of Labor’s publication The Employee’s Guide to the Family and Medical Leave Act for more information on FMLA. Also, there are 11 states—including California, New Jersey, and Connecticut—that, along with the District of Columbia, have enacted their own FML acts that go beyond federal provisions. Check with your human resources contact to see what’s the case where you work.

But as helpful as FMLA is when it comes to giving you peace of mind about your benefits and job status while you’re recovering from a work disability, it doesn’t require your employer to pay you while you’re out. You’ll have to look elsewhere in your benefits ecosystem for an alternate income source to compensate for the one that’s run dry.

Paid sick leave: helpful, but limited

In recent years, a growing number of states and local jurisdictions enacted laws requiring paid sick leave. One of those laws may apply to your workplace. There’s variation regarding who’s covered, how much sick time employees are entitled to, when and how it can be used, and other legal fine points. (For more details on various paid sick leave laws, check out this comprehensive guide.)

Keep in mind a number of employers provide paid sick leave benefits even in the absence of a legal mandate. That number is expected to grow given the tax credit for employers providing paid family and medical leave that was included in the 2017 tax act. Your employer may be one of them.

But here’s something important to keep in mind about various paid sick leave provisions. Rarely, if ever, do they provide enough time to cover an all-too-common situation like your six weeks of recovery from a lower-limb fracture. In most cases, you’ll be able to count on a week’s worth of pay—or maybe two weeks, if you’ve been savvy about carrying over unused days from the previous year. What will you do for the rest of your time away from work?

Short-term disability: a useful benefit

At this point, you’ll need to press further into your benefits ecosystem to locate an income stream that will last longer than just a week or two. That’s where a short-term disability (or salary-continuation) plan becomes a helpful benefit.

Statutory disability

If you work in California, New York, New Jersey, Rhode Island, Hawaii, or Puerto Rico, you’ll have what’s known as statutory disability coverage. The purpose is to provide you with some income while you’re unable to work because of a qualifying disability. (Here’s a detailed matrix outlining provisions of these various statutory plans.) What they have in common is this:

  • They kick in only after you’ve been out for a certain period of time (usually a week). That time is usually referred to as the “elimination period.”
  • They’ll pay you for a limited period of time (“maximum payable period” or “maximum benefit period” or some other terminological variation)—typically six months, although in California, it goes up to a year.
  • You’ll get paid a percentage of your pre-disability income (usually ranges 50 percent to 70 percent) with a cap on the amount you get in any week. (California has the highest capped amount at $1,216. New York, on the other hand, caps at $170, and Puerto Rico’s maximum of $113 is even lower.)

In these statutory jurisdictions, employers can provide supplementary or “enriched” plans that provide additional benefits above and beyond what’s mandated by law. You may want to find out if that’s the case where you work.

Employer-provided short-term disability

What about other states, where the statutory requirement doesn’t apply? Employers may provide their own plans. They’ll usually do so in partnership with an insurance company. The insurer will usually take care of approving claims, processing payments, and they will often provide services to facilitate claimants’ safe and timely return to work. The employer can fully fund the plan’s cost or, in return for a premium payment, hand off the financial risk to the insurer.

As with statutory plans, you can expect that:

  • Coverage will kick in after an elimination period. Usually, that’s a week, but in many cases, it can be more (two weeks or, more rarely, 30 days). In some cases, it can be less (zero days, which means coverage starts the first day of your absence from work). I used to work for two different disability insurance carriers, and when I consulted with client companies, I noticed most of them also provided sick banks or general paid-time-off banks that employees were expected to tap to get them through the elimination period with an income stream.
  • You’ll be covered for a relatively short period of time—usually three or six months. I’ve noticed that employers in the education and healthcare industries tend to frequently have shorter periods of coverage. And there are some instances where coverage can go for up to a year. My experience is that most of the time, the maximum payable period for the short-term disability plan is set up to track with the elimination period for the employer’s long-term disability plan (if there is one).
  • You’ll probably be paid a benefit amount that’s less than 100 percent of your pre-disability pay. I’ve seen salary-continuation plans (basically, the same thing as short-term disability, except the money comes out of the payroll budget instead of a separate fund) that pay you 100 percent of your salary, if you have more than a certain number of years of service with the employer.

But those are the exception. The usual payment is 60 percent to 70 percent of salary (and sometimes lower). And, in addition to the “benefit rate,” there’s probably also a maximum weekly payment amount. So, the amount of weekly income you can expect from your employer’s short-term disability plan is actually going to be the lesser of your weekly pay times the benefit rate, or the maximum weekly payment amount.

Key questions to ask about your employer’s short-term disability plan

So, there are three key questions you should ask about your employer’s short-term disability plan:

  1. How long do I have to be out of work before I can collect benefits?
  2. Once I start receiving benefits, how long can I count on them before they’ll stop?
  3. Given the benefit percent and maximum weekly payment amount, how much replacement income can I count on?

And now, let me add one more for you:

  1. Who’s paying for the coverage—my employer or me?

Here’s why that’s important to know. If your employer is picking up the tab for the cost of disability coverage, any benefits you receive under the plan are taxable to you. But if you’re the one who’s paying, then your benefits come to you tax-free. That can make a big difference in the amount of money you actually bring in while you’re unable to work.

This distinction between taxable and non-taxable benefits also comes into play in what are called core/buy-up plans. This is where an employer offers a core benefit (let’s say, a benefit rate of 40 percent) at no cost, and the employee has an opportunity to purchase additional coverage (for example, to bring the benefit rate from 40 percent to 70 percent). In this situation, any benefits stemming from the core coverage are taxable, but the buy-up benefits are tax-free. (Keeping track of what is and isn’t taxable and making proper withholding is another valuable service that insurance companies provide.)

Now that I’ve given you four questions to ask about your employer’s short-term disability plan, I’ll give you a fifth and final one:

  1. How do I sign up for the plan?

A lot of times—especially for plans where the employer pays the entire cost (including core coverage in core/buy-up situations)—you are automatically enrolled once you’ve met the criteria (usually involving hours worked and length of service) to become “benefits-eligible.”

But a growing number of employers are offering disability plans as an optional benefit. That means, you’ll have to make a specific benefits selection at the time of initial eligibility or at annual open enrollment to be covered. You’ll have to pay for the coverage (either with pre- or post-tax dollars), and you may have to answer some questions about your health and medical history (and those answers may affect your eligibility for the plan).

Bottom line: Find out what applies in your workplace.

Another way to get short-term disability coverage

You may also be able to get short-term disability coverage through an insurance company specializing in what’s sometimes referred to as worksite or voluntary coverage. In the past, these companies would send representatives to your workplace where they meet with you and, if you agreed to buy what they had to offer, enroll you for coverage. They still do that, but increasingly, you can interact with the company by using web-based technology. You can pay your premiums directly to the carrier or take advantage of arrangements the carrier made with your employer to allow for payroll deduction of premiums.

If you go this route, keep in mind because you’re paying for coverage with after-tax dollars, any benefits you receive will be tax-free.

What happens if you’re sidelined for a longer period?

Let’s say you’re one of the six million people with a work disability due to a back or neck problem. One out of every four people in your situation is likely to be out of work for more than three months (see Table 2 of this study). What if you’re in the top 25 percent?

That’s where long-term disability insurance becomes important. I’m not going to get into that topic here, because it merits in-depth consideration on its own, but you should at least check out what one of our guest bloggers has previously written about long-term disability coverage.

And, here’s something else to think about. When I worked for insurance carriers, the vast majority of employer clients had a policy of terminating people after they had been out of work due to disability for six months. Fortunately, in most cases, those terminated employees had long-term disability coverage. But, unfortunately, they no longer had health coverage through their employer (although they did have the option of COBRA coverage—an expensive option, and one that’s available for only 18 months after termination of employment).

My final words to you

If there’s just one thing you take away from what I’ve written here, I hope it’s this: If you become sick or injured (or leave work related to your pregnancy), your health insurance will help pay the medical bills. But if you’re unable to work because of an illness or injury, medical coverage won’t pay you. That’s why you need to become savvy about available resources—especially your employee benefits—that you can draw upon to provide replacement income. Remember that being out of work doesn’t have to mean out of money.

 

[i] You don’t just take my word for it. See the disability durations in Table 2 of this study. Also, check out the “Lost calendar days per closed claim, excluding pregnancy” metric on the short-term disability report in the Integrated Benefits Institute’s most recent set of health and productivity benchmarking reports.)

[ii] This is a good time to point out that the Family and Medical Leave Act addresses two different situations that might cause you to miss work: your own health, or a family member’s need for you to provide care for them. And that distinction pretty much applies to the various state and local leave laws (as well as individual employer policies and programs) relating to “family and medical leave” situations that have spring up over the past quarter-century. In this post, I’m addressing only leaves for “your own health.”

But understand that there’s often an interplay between the different leave types.

For example, if you’ve had a baby, the first six weeks after delivery are a period of medical recovery for you, so that time away from work would be considered as medical leave (your own health). But after that, you might need (and in fact be eligible for) additional parental or caregiving leave (for your newest family member). Be aware of your employer’s policies on this kind of leave (as well as any applicable state or local laws). And by the way, there’s a growing trend towards parental leave for the “secondary parent” (in most cases—but not always!—that means the father).

For a deeper dive on what kinds of family/medical leave programs are currently on offer, check out the first section of the Paid Leave Project’s Playbook resource.




How disability insurance can be part of your paid leave and absence management strategy

By Marjory Robertson, AVP & Senior Counsel and Abigail O’Connell, Senior Counsel, Sun Life Financial

When employees need to step away from work — whether to welcome a new child, care for a family member, or another life event — protecting their jobs and benefits, understanding their rights, knowing whether their employers will pay part or all of their absences, and meeting paperwork deadlines and other obligations is often overwhelming. If they work for an employer without a consolidated absence approach, they also will be required to contact separate entities for different benefits and entitlements. Workers may be calling their HR team to file their Family & Medical Leave Act requests, and contacting their insurance carriers to file claims for short-term disability benefits.

Absence can also be overwhelming for employers

Legal requirements regarding leaves of absence (paid and unpaid) and workplace accommodations are changing at breathtaking speed. Employers’ human resources staff do not have the time, personnel, or expertise to ensure they are complying with the various requirements of the FMLA, the Americans with Disabilities Act, and the increasing variety of federal, state, and local paid and unpaid leave laws.

Further, the consequences of noncompliance for employers are very serious, ranging from government investigations by the Equal Employment Opportunity Commission or the Department of Labor to individual lawsuits by employees.

More employers are choosing to outsource their leave management to their disability provider. In fact, according to a 2017 leave management survey by the Disability Management Employers Coalition, 88 percent of employers who outsource their leave management do so with their disability insurers. They have expert legal and compliance personnel and systems who help employers ensure compliance with this myriad of changing leave and accommodation laws. Moreover, insurance companies want to partner with employers to evaluate and handle complex leave and accommodation issues and challenges. Their knowledge, skills, systems, and staff help employees receive the benefits they need quickly, and prevent FMLA and ADA abuse, including the challenging management of intermittent FMLA leave.

Using one vendor for absence and disability can simplify absence for employees and employers

To streamline the employee and employer experience, many companies select one vendor to administer paid and unpaid leave, absence, and disability benefits. A consolidated approach enables both employees and HR managers to contact one entity for information about their rights and obligations concerning multiple benefits and entitlements, like short-term disability, FMLA, and ADA/ADAAA accommodations.

In many situations, both the FMLA and the employer’s STD policy may cover an employee’s absence, enabling the disability carrier to make determinations based on a single employee claim form. Employers and managers receive consolidated reporting showing the status, dates, and timelines for employee absence to support workforce planning.

A vendor can promote company offerings in a targeted manner to drive usage

With one vendor, employers can incorporate and administer company paid (and unpaid) leave plans and programs alongside absence management programs and disability insurance. For example, the vendor may highlight an aspect of the employer’s employee assistance program based upon the employee’s particular absence reason, or remind the employee of a duty to report to his or her supervisor based on the employer’s usual and customary call-out requirements. More and more employers are offering paid paternal and/or family leaves. Insurers can administer these leaves along with the unpaid statutory leaves and also ensure that employer-sponsored paid leaves are coordinated with the increasing number of state paid family and medical leave laws.

Consolidated administration drives efficiency

Through their disability insurance provider, the employer may gain efficiency by setting up a single-file feed and vendor agreement. The employer’s staff may also become more efficient by outsourcing absence administration. Additionally, using an outside administrator limits risk of exposure to employee personal health information Employees will appreciate not having to provide sensitive medical information to their manager or HR. The provider can become a trusted partner to provide collaborative and consultative guidance on a range of complex compliance and administrative issues.

Help is available

Disability insurance carriers have decades of experience in managing absences, accommodations, and claims related to an employee’s own medical conditions, and for other leave reasons authorized by law or by an employer-sponsored leave plan.

Insurance carriers hire expert claims, vocational, and legal staff who can properly evaluate eligibility for leave and benefits, and administer the claims and accommodations in a seamless and integrated manner that best serves employers and employees alike.

Disability carriers offer client-friendly services, including timely processing of claims for leave and/or disability, integrated management of leave and disability claims, detailed reporting on leave and disability incidence rate, and timely and helpful communications with both the employer and affected employees.

Insurers have made – and will continue to make – substantial investments in legally-compliant claims and leave technology to meet evolving needs. They also maintain strict data privacy and cyber security standards.

Engage your disability provider for help with your absence and leave management policies. From providing support tools to navigating the nuances of leave protocols and maintaining compliance, your insurer can support you and your employees throughout their leave duration.

For more on paid leave and your paid leave strategy, tune into the CDA podcast, with Carol Harnett, Abigail O’Connell and Marjory Robertson.




Selecting benefits and insurance products that make sense for you

By Carol Harnett, President, Council for Disability Awareness

Note: An earlier version of this post appeared in Carol Harnett’s employee benefits column for Human Resource Executive.

You don’t know me, but I’m someone people have come to trust when they want to have a conversation about employee benefits. I stand to neither gain nor lose anything based on the choices you will make during your annual benefits enrollment period. Except for this: Based upon my life experiences, I’d like to see you make the best choices you can.

It’s challenging for your employer to provide you with the types of suggestions I’m going to make. This is largely based on the fact your human resource leaders can’t give you direct advice.

There is one key assessment I believe is important to make when choosing your benefits, and that is how to understand risk.

I spent the first 10 years of my career training elite athletes who “sneer at risk.” They push themselves to the edge of what their bodies can do and return every day to do that again and again – even after experiencing major injuries. They, their significant others or their parents also go to considerable expense to make certain they receive the best training, medical care and rehabilitation available.

The rest of my career has revolved around how to get people to the best quality healthcare – both to treat and prevent injuries, illnesses, accidents, temporary and permanent disabilities, and more minor health conditions such as pregnancies, bad backs and torn-up knees. As a result, I’ve developed a contact list of medical specialists who make a difference in helping people recover in a way that, sometimes, makes a life-altering difference.

Here’s one of the things that’s been frustrating the heck out of me the last few years. I’ll receive a phone call from a friend or acquaintance seeking a referral to a physician or healthcare provider. Very often I know someone who could help them – and here’s where the “but” comes in. This person can’t see this individual because they selected a health plan that limited their provider and medical center choices. At the time, it seemed like a good call. Limited network –and high-deductible – plans are more affordable.

I’d suggest that the first question you need to answer when assessing your health plan benefit selection is, if you or your loved ones needed to see the best healthcare provider, would you want that choice available to you? There is no shame in saying “no.” You might have to travel to see this person or go to that center of excellence, and it’s simply something you know you couldn’t or wouldn’t do. Understand that part of yourself now, before you select your health plan.

The other thing that worries me when people are making their benefits choices is they don’t think about if they can afford to be out of work for a period of time. The reason? It comes down again to how we assess our risks. Most of us don’t think anything will happen to us, so we don’t worry that we won’t be able to work for a period of time. Or, we believe we’ll have enough vacation time to cover an unpaid absence. Or, we think our parents or friends will loan us money.

Let me give you a snippet from my own life. During my working years, I’ve had two mountain-biking accidents that placed me on the disabled list, plus two concussions, two stress fractures, two broken toes, three episodes of back pain and a torn MCL. You may call me unlucky; I will tell you I live life off the sidelines. And so do most of you – whether you realize it or not.

So, first, make certain you understand your employer’s paid-time-off or vacation/sick time policies. This will give you good information about how vulnerable you might be financially if you leave work to have a child, or to repair your bunions, or take care of a sprained back, knee or shoulder – never mind if something more complicated happens.

My recommendation to you will always be to take advantage of your employer’s short- and/or long-term disability insurance policies. They are inexpensive and cost-effective ways to make certain you can afford to be out of work (and help you pay for associated costs such as money toward your high-deductible, co-pay or co-insurance).

Once you’ve consciously checked the boxes on the two things people who work tell me are most important to them – their health and their income – take a serious look at other benefits associated with an income stream such as your retirement plan. Make certain you know if and when you are eligible to receive retirement income from your employer, and how you can contribute the most money possible toward retirement programs such as 401(k) and 403(b) programs. Just as none of us think we’ll ever become ill, injured or experience an accident, we also think retirement is a far-away concept. Make certain to at least make a start with contributions.

What about the rest of your employee benefits options? Trust me, there are some wonderful benefits out there. If you have children, dental and vision insurance may be high on your priority list. But, before making those selections before the ones described above, make certain you understand the benefits and limitations to these policies. You may find there is an annual or a lifetime cap on benefits that doesn’t make these choices a good investment for you.

The bottom line for me every year? I consciously make certain I have the best help available to me through my benefits selections if something were to happen to my health or my income. And then I make sure I can retire from this part of my working life at a point of my choosing. I wish you the same.




Beyond medical: How supplemental benefits help attract and retain talent

By Phil Bruen, Vice President, Group Life and Disability Products, MetLife

As the annual enrollment period takes place in workplaces around the United States, human resources teams and employees have benefits on their minds. During this time, it’s important for employers to educate their workforces on how the benefits they provide can help workers achieve their short- and long-term financial goals.

To do this, employees should use the information their company provides related to benefits and also seek guidance from those they trust most. Doing so, even more so than a major life event, can cause individuals to not just evaluate, but act on benefits that meet their needs.

Employers who are competing for the best talent find that providing benefits to support the financial well-being of their workforce is necessary. According to MetLife’s 16th Annual Employee Benefit Trends Study (EBTS), less than half of workers believe their employer understands their personal financial pressures.

The benefits offered to employees during their annual enrollment period go well beyond basic health insurance. Products such as dental and vision insurance, accident and critical illness coverage, and disability insurance provide additional financial support for costs beyond what medical insurance covers. Workers need to view all employee benefits as a critically important part of their health and financial wellbeing. Their benefits package is necessary to protect employees’ life goals, such as purchasing a home or sending children to college.

Why peace of mind matters

The recent MetLife study revealed that employees use their benefits to fulfill a need greater than a visit to the dentist or a more affordable way to get glasses. On the whole, today’s workforce relies on their benefits as a financial safety net—benefits give them peace of mind.

For example, 71 percent of employees say their benefits help them worry less about unexpected financial or health issues. Additionally, 65 percent say their non-medical benefits help limit their out of pocket medical expenses. Understanding these deeper advantages of benefits helps HR leaders serve employees better. It also pays off for companies as well as our research shows that benefits increase employee loyalty, engagement and even productivity.

But for many companies, the big question is how to offer more benefits without incurring outsized expenses. The answer rests in creating options for employees to customize their benefit offerings. The good news? Employees are ready to help, since 60 percent said they’d like their employer to offer a wider array of benefits that they can choose to purchase.

Getting beyond medical

When you think outside of the traditional health insurance box, some of the most important and sought after benefits fall into these three categories:

1. Disability insurance and income replacement. More than one in four adults who are currently 20-years-old can expect to be out of work for at least a year because of a disabling condition before they retire.[1] And yet less than half of Americans report they have enough savings to cover even three months of their living expenses.[2] Providing an option for short- and long-term disability insurance offers employees a simple way to keep unexpected events from turning into financial disasters.

2. Supplemental health benefits. Today’s employees want and need a solid health insurance plan. But for most individuals and families, that’s only a component of their overall healthcare. For example, 53 percent of employees consider dental insurance a “must-have,” and 37 percent say the same about vision care. Other key offerings that employers can consider include hospital indemnity, critical illness, and accident insurance, all of which supplement health plans, and provide employees with additional financial resources when they may need them most.

3. Retirement and financial wellness. Nearly three-quarters of employees report that saving for retirement is a priority—and nearly half say they’re already concerned about outliving their savings, according to the 2018 MetLife research. Traditional employer-sponsored retirement plans certainly provide the financial security and savings that employees want. But additional benefits such as lifetime income solutions, life insurance products and financial planning, and education services work to strengthen overall benefit plans and give workers additional ways to prepare for retirement.

In an increasingly competitive job market, employee benefits truly help elevate companies in the minds of their current employees—as well as the people businesses want to attract and retain. As HR executives find creative ways to build out their benefits, they also prepare their businesses and workforce for a better future.

[1] Disability Statistics, The Council for Disability Awareness, http://disabilitycanhappen.org/overview/ accessed September, 2018

[2] Chances of a Disability, Ibid, The Council for Disability Awareness, http://disabilitycanhappen.org/disability-statistic/ updated March 28, 2018

Looking for more information on supplemental benefits? Join Phil Bruen and Carol Harnett as they discuss consumer strategies this open enrollment season on the CDA’s BlogTalkRadio.




The basics of the Social Security Disability Income Program

By Ted Norwood, General Counsel and Director of Representation, Integrated Benefits, Inc.

The United States Social Security Administration offers two programs—confusingly named Social Security Disability Income and Supplemental Security Income—aimed at providing or supplementing the income of people who are unable to work.

SSDI (also called Title II benefits) provides disability coverage for individuals who have paid enough Social Security taxes. The second program, SSI or Title XVI, provides a smaller benefit for people who haven’t worked long enough to qualify for Title II benefits and established a financial need.

SSDI and SSI require the same medical requirements to receive benefits. However, SSI also requires claimants to pass a stringent means, or income, test that establishes the applicant’s need.

For the purposes of this post, I’m going to focus on the SSDI program. This benefit has greater relevance than SSI to the majority of employers and workers. In addition, this program frequently interacts with employee benefits, especially long-term disability policies.

But before I proceed, it’s important to remind you that I’m presenting basic information. If you have specific legal questions about SSDI, you should reach out to a lawyer. SSDI is a huge program with many regulations and significant administrative entities. My goal in this article is to focus on a few key elements that are important to employers and employees.

I find that most people know something about the SSDI program and many hold opinions on it already, but there is an abundance of misinformation. Before you can understand SSDI’s role in workplace absences, you must understand the program’s basics.

In many ways SSDI is like a private long-term disability policy that you have through the government. Like any insurance policy, the terms are important.

You must have worked to qualify

To receive SSDI benefits, you must have worked and paid the SSA’s taxes. If you are an independent contractor and don’t pay FICA taxes, you may not be covered. There are boring rules that you can access here if you want more information.

If you want to know if you are covered, you can simply contact SSA and they can tell you if you are insured and when your insured status would end if you stopped working.

You must qualify medically and vocationally

If you are covered, you may qualify medically for SSDI if you are:

  1. Not working
  2. Have limitations caused by medical conditions expected to last at least a year, and
  3. You are unable to sustain substantial gainful activity due to your limitations.

The SSA will deny benefits if they believe you can still perform a significant number of jobs that exist in the national economy or if you can perform past work (from the last 15 years).

Many Issues are surprisingly irrelevant to the SSA

Social Security does not consider income in its evaluation of disability. If a person who made a high salary can still perform lower income work, they are not disabled under SSDI. Likewise, a person who worked in labor, such as construction or manufacturing, may not be disabled if they are still capable of performing less demanding jobs.

SSDI also does not consider whether jobs are available or if an individual may or may not be hired for a job. The SSA only evaluates whether an individual could perform the functions of a job that exists.

The SSA considers problems finding employment to be addressed by unemployment insurance. But, to that end, applying for both unemployment and SSDI will usually have detrimental effects on the SSDI application. The SSA sees the receipt of both benefits as generally incompatible (with exceptions).

The SSDI Application Process

Individuals may apply for SSDI on the SSA’s website or at a Social Security office. A state agency will evaluate the application, review medical records and determine if the claimant is disabled under SSA’s rules. This usually takes three to six months with a 34 percent award rate.

If denied, a claimant can request reconsideration by the state agency. This essentially repeats the process, with a 13 percent approval rate.

If denied again, the claimant may request a hearing before an administrative law judge. There is a nine- to 27-month wait from hearing request to hearing with a national average wait of 17.3 months. The ALJ’s decision takes about another 60-90 days and ALJs awarded 47 percent of cases last year.

There is one more level of appeal within SSA – the Appeals Council – but the success rate is only 10 percent. After that, a claimant must file a civil case in federal court.

Obviously, it is a long process. This wait has a huge impact on the claimants. Waiting 30 months to get a payment is not uncommon. The SSA makes retroactive payments in a lump sum, but that is often cold comfort for claimants. The average wait time for all claimants is about 15 months before they receive a payment.

When Awarded SSDI

Disabled claimants receive an average monthly benefit of about $1300. There is a five-to-six month elimination period at the beginning of the period of disability.[The SSA provides annul adjustments for cost of living.

Two years after the end of the claimant’s elimination period, they will begin receiving Medicare.

There are some programs in place to support attempts to return to work, with mixed results. The SSA generally schedules continuing disability reviews (CDRs) every three to five years.

SSDI certainly has some warts, but overall American workers benefit tremendously from this program.

 




Why do some insurance policies still use pre-existing conditions?

 

By Larry Alkire, Senior Vice President, Chief Marketing Officer, American Fidelity Assurance Company

When Congress passed the Affordable Care Act (also known as Obamacare), the term—”pre-existing conditions”—became a household word. The ACA prevented health insurance carriers from denying you coverage, charging you more money, or refusing to pay for essential health benefits for any condition you had before your insurance coverage started. It also prohibited health insurers from denying you coverage or raising your rates once you’re enrolled in a plan based only on the health claims you filed.

No doubt, the ACA was a game changer for health care coverage. The legislated ban on healthcare “pre-ex” limitations opened the possibility for many people to get immediate coverage that they previously could not.

Health insurance, particularly employer-provided healthcare plans, typically have a larger enrollment of healthy people when compared to other employee-paid insurance. This is because employer-provided health insurance covers most employees and the company pays a portion of the insurance premiums. With high participation levels, the likelihood of anti-selection (a higher concentration of unhealthy participants) is reduced significantly—especially when compared to supplemental and voluntary insurance products.

Although pre-existing condition limitations are considered to be a negative for consumers, employee-paid supplemental coverage has a unique structure that features complex consumer/carrier tradeoffs.

Voluntary benefits that are commonly purchased by employees at work can include disability, life, long-term care, critical illness, and cancer coverage. Depending upon the type of insurance you select, the plan may ask no health questions when you apply (guarantee issue—typically for new hires and during open enrollment periods), limited health questions (sometimes referred to as simplified or express issue coverage), or a lot of health questions (full underwriting sometimes accompanied with verification).

The trend over the last few years is for applications for voluntary insurance to require less underwriting. However, with less underwriting comes a greater need for carriers to use pre-existing condition limitations. But is that a bad thing?

Actually, there’s a benefit to most consumers when insurers use pre-existing condition limitations. The “pre-ex” limitation allows carriers, particularly group insurance carriers, to bring insurance plans to many employers and their employees. It allows people to obtain coverage (on a guaranteed issue basis in many cases) by limiting insurance during the first year or two after they initially make the purchase to conditions that didn’t exist at the time of application, or people weren’t actively being treated for. This is usually true, even if you have serious pre-existing conditions.

Consider the alternative. Not having a “pre-ex” limitation could force insurance carriers to screen out people at a much more intensive level. Having less people in the plan makes the premiums more expensive.

Consider the following points when you’re thinking about “pre-ex:”

  1. Applicants usually know they have a condition that an insurance carrier would say makes them “uninsurable.”
  2. It is best to identify whether or not you have a pre-existing condition before you apply for insurance coverage. If you have a pre-ex condition, open enrollment is a golden opportunity to obtain coverage. You will not be covered for your pre-existing condition for the first year or two, but you will be for anything else that happens to you. (Keep in mind that you could be covered for your pre-ex condition one you are treatment-free for that condition for one to two years.)
  3. New applicants should always understand how the coverage works—and ask questions—before they buy it, and review their policy certificate again when they receive it.

The bottom line is that a pre-existing condition limitation often allows consumers with health issues to still buy supplemental and voluntary insurance. The limitation only applies to your specific condition and not all other conditions or injuries. And an open-enrollment-eligible plan is a great opportunity for an employee to take care of the needs they and their families have—even if they have serious health issues.




How to upgrade your workplace on-boarding for Gen Z employees

A smooth on-boarding process is a must for today’s employees; after all, you want their first days to be inviting, and you want them to understand the ins and outs of your workplace. That’s because you have to make sure your employees are engaged right from the start, given today’s often fickle workforce.

Although most on-boarding best practices work for all generations, there are some specific actions you might want to take to reach your newest Gen Z employees that will capture their attention and underscore the importance of your programs, from benefits to corporate best practices.

Start wooing them from the day you extend the offer.

There’s an unfortunate new trend going on in workplaces, and that’s candidates “ghosting” their new employer. In other words, they’ve gone through all the trouble of interviewing and being hired, and then they just don’t show up on the first day…leaving you with a void and that sinking feeling you have to go back to the drawing board. One way to avoid this is to stay in close touch from the minute you extend the offer, even if there’s a brief lag until their start day. Send them emails with some details on the company culture or to introduce them to team members – anything that will help ensure they feel the love right up until they show up for the first day.

Create “snackable content.”

Gen Z is much maligned for their short attention span, but it’s not entirely their fault. After all the world has sped up, and they have always been used to a quicker pace – their TV shows have even been faster-paced. But the truth is, they are less likely to read through lengthy, fact-packed documents. If you truly want to retain their interest, make the content short and sweet so that they can digest it in short sessions as their time allows.

Focus on culture and transparency.

Gen Z cares about the culture of the workplace they are joining; but it’s not just about Ping-Pong tables and the other trappings that many “cool” workplaces try to assume. They want to be sure that their employer is walking the talk in regards to corporate social responsibility. Companies can help cultivate their loyalty through letting Gen Z employees know from the start what your company does to embrace a culture that is good for the environment, both the working environment they encounter every day and the larger global environment that they care about.

As consulting firm Deloitte explains in its report “Generation Z Enters the Workforce,” “Major consumer brands have found they are better able to build customer loyalty through transparency. For example, Patagonia, an outdoor clothing company, has made its supply chain more transparent via the Footprint Chronicles to demonstrate alignment with its core values of sustainability and environmental stewardship. As employees begin to expect similar norms for their employment brands, the need for transparency will likely only increase.”

Cater to their information on-demand expectation.

Remember that this is the generation that has always had a “computer” in their pocket where they can immediately get the answer to any question. Make sure your intranet is intuitive so that new employees can easily find the answers to questions they have about benefits like disability insurance or retirement plans via a simple search that they can access from any device.

Use images to explain more involved concepts.

Gen Z is very visually oriented, so a picture can be worth even more than 1,000 words. Redeploy your employee training manuals into more visual options, from short videos to infographics that Gen Z workers can understand at a glance. If there is a more involved step in a process, such as how to sign up for benefits, create a short video tutorial. This is the YouTube generation after all.

Try gamification as a strategy.

Turning employee onboarding into a game isn’t just a smart strategy to keep them entertained – it helps with retention, too. And while it works for every generation – most of us tend to zone out when faced with too many words on a page — it’s especially important for Gen Z, who were raised on video games and appreciate being rewarded when they master something. Create quizzes that unlock fun secret games or allow them to level up by answering questions correctly.

As you incorporate multiple generations into the workplace, it’s smart to consider how all your communications strategies can be upgraded. Reaching Gen Z through engaging onboarding is one of the best ways to start off on the right foot.

 




What makes a millennial-friendly workplace?

Move over, foosball table and bean bag chairs. If your organization’s goal is to attract the next generation of workers – and it better be, given the fact that millennials are the largest generation in the workforce today, reports the Pew Research Center – you want to make sure you’ve designed a workplace that features the attributes they covet.

Of course, the good news is that the elements that make a workplace friendly to millennials actually will attract all generations; after all at our core most of us want the same things.

But the millennial generation isn’t shy about expressing their preferences, so here are some research-backed suggestions for creating the ultimate millennial-friendly workplace.

Millennials want: Training and development

The skills shortage is real, and millennials want to make sure that their abilities are keeping pace with today’s new workplace and its focus on ever-evolving expectations. In fact, nearly 90 percent of millennials say that “professional or career growth and development opportunities” is a key factor in their job satisfaction, finds a Gallup poll – and that’s surely one reason why more than three-quarters of companies are offering professional development opportunities as a way to retain employees, finds a survey by Challenger, Gray & Christmas.

Millennials want: Feedback

Forget the annual review. “Why look in the rear-view mirror when you can be looking toward the future?” millennials wonder. In fact, nearly three-quarters of those under age 30 said they that would prefer feedback either weekly or monthly, finds a PwC survey. And that’s a bonus for everyone because it allows employees to make small tweaks to their performance on an ongoing basis, rather than waiting for a deluge of information, many of which refers to incidents or behaviors that may have happened a long time ago.

Millennials want: Top-notch technology

You better ditch those balky workstations and outdated pagers: Close to half (42 percent) of millennials say they would quit a job if they had to work with substandard tech, and an overwhelming 81 percent said that the available workplace technology was a consideration when contemplating a job offer, finds “The Future Workforce” study.

Millennial want: A workplace that lives its values

In one study reported by Glassdoor, employees named “culture and values” as the No. 1 workplace factor that matters to them most. Today’s younger generations are finely tuned into corporate social responsibility (CSR), and how companies behave, but the important thing to remember anymore is that they won’t just take your word for it: They are going to rely on their own research to find the facts. In fact, the Cone Communications CSR study finds that more than three-quarters of millennials do research to make sure a company is authentic in what it claims about environmental or social issues. While the study primarily pertained to consumers’ purchasing behavior, it stands to reason they will be equally diligent about sussing out the facts before taking a job.

Millennials want: Work/life balance

It’s almost become a cliché, but millennials crave their free time. In fact, flexibility is incredibly important to them as they create a balance that works for them. And while that mean ducking out for a spin class at noon or leaving early to take advantage of great weather for a hike, it also probably means they are answering emails on the weekend. Offering them the flexibility to make their own hours (within reason, of course, if it fits with your industry) can make a huge difference in their happiness in the workplace: An environment of flexibility encourages a positive impact on overall wellbeing, health and happiness, say 82 percent, and 81 percent also said it made them more productive, finds the 2017 Deloitte Millennial Survey.

Millennials want: A cool workplace

Ah, yes, back to those foosball tables and beanbags. Because, as it happens, millennials do care about their work environment. Turns out that 70 percent of millennials choose their jobs based on the office space, finds the Capital One’s Work Environment Survey. The good news? The most-desired workplace design element is natural light. So let the sunshine in.




Study shows LGBTQ Americans in need of retirement strategy guidance

A recent study from Massachusetts Mutual Life Insurance Co. (MassMutual) revealed lesbian, gay, bisexual, transgender, queer or questioning (LGBTQ) Americans say they want to preserve their retirement savings but tend to take bigger risks when it comes to investing.

Forty-two percent of LGBTQ retirees and pre-retirees said the should become more conservative with their money as they come closer to retirement, as opposed to 28 percent who said they prefer a more aggressive investment approach.

However, 65 percent of those respondents say their investment strategy is actually more mixed, rather than conservative, compared to 52 percent of the general population — 31 percent of respondents admitted they could be taking more risks than they should be, compared to 22 percent of other retirees and pre-retirees.

“MassMutual’s study shows that many LGBTQ retirees and pre-retirees may benefit from consulting a financial advisor about their retirement investment goals, something less than half currently do, and may benefit from help leading into retirement and securing their finances through retirement,” said Catherine Cannon, Head of Personal Markets at MassMutual.

“Of those respondents in our study who do work with a financial advisor, six in 10 say their advisor has encouraged them to change their investment mix and 87 percent of those folks were advised to become more conservative as they enter retirement.”

Both the general population and LGBTQ retirees expect their retirement savings to last 25 years, however overall, LGBTQ retirees plan to retire later than the general population. In addition, the same respondents said they expect their retirement income will last as long as they need, which is two years fewer than the general population.

LGBTQ retirees also expressed more confidence than the general population that they will be financially prepared for retirement. However, despite this confidence, stock market volatility and downturn in the stick market are worrisome for the community as they approach retirement. About 75 percent of respondents expressed this concern, with 27 percent say they are “very concerned.”

72 percent of the general population expressed concern with regard to market volatility, while 21 percent said they are “very concerned.”

According to the study, LGBTQ respondents show greater comfort in taking investment risk, with just 20 percent willing to accept “below average” or “low investment returns” in exchange for greater safety. Overall, respondents seem to seek a balance between growth and preservation.

“One strategy that may help some LGBTQ retirement savers balance investment goals such as growth and safety is the use of target date funds (TDFs) when available through their employer’s 401(k) or other retirement savings plan,” Cannon said.

“TDFs automatically reallocate retirement savings between equities and fixed-income, gradually growing more conservative as the investor approaches and enters retirement. Some newer TDFs also are more personalized to investor’s individual needs, including a greater focus on managing assets in accordance with an investor’s individual risk tolerance.”




Team-Building Activities Your Team Will Actually Love

Trust falls. Ropes courses. Bowling or mini golf. Many offices plan a summer team-building activity designed for camaraderie, but forced group fun can cause anxiety in many. Maybe your office mates don’t know each other particularly well, or there are people of so many ages and ability levels that anything too physical can be a non-starter. The great news is that there are still a wide variety of team-building activities you can plan that everyone will love. Here are six to consider.

 

Throw a board game competition.

 

Not everyone’s great at kickball or golf but almost anyone can find the fun in a round of Monopoly or Sorry. Board games are having a resurgence, and it’s easy to see why. Everyone takes turns, works cooperatively and has a blast. Consider classics from everyone’s childhood or find a new one where everyone can learn the rules together. Depending on the size of your office, you can allow people to choose from among several or rotate every 45 minutes or so. Keep the competition level light and the snacks heavy.

 

Host a scavenger hunt.

This is another cooperative game that can be fun for all ages and abilities. Compile a list of offbeat items both inside the office and outside – if you’re close to a city, head downtown for even more fun. Have the gang take photos of the items they find, and gather back at the office after an hour or two to share wild stories and enjoy a snack.

 

Trade jobs.

What does Annette in accounting or Sam in sales do anyway? Sometimes walking a mile in another employee’s shoes can help promote better understanding – and possibly a renewed sense of appreciation and even patience. Work out a schedule where employees visit other departments to experience what others do; have each department offer a brief overview and then let the group loose to do a sample project — for example, working up a new client sales presentation or troubleshooting cybersecurity threats, just for fun, of course. After a couple of rotations, meet back and have the group share some observations or surprising insights about what they learned about other teams’ roles and challenges.

 

Plan a family day.

Often work activities fail because your employees may not want to give up precious free time to socialize with colleagues. That’s where a family fun day can serve triple duty –allowing them to be with their family, but also showing their family their workplace AND allowing coworkers to get to know each other better through their families.

Make sure there are suitable activities for all ages, from a bouncy house for the younger set, to games for older kids and a photo booth and plenty of food for everyone. If your budget allows, splurge on some sort of entertainment, maybe a music group or a family-friendly comedian. Make sure you have name tags on hand so everyone knows who belongs to who and plenty of action to encourage mingling.

 

Have a reading club.

If you don’t want to devote an entire afternoon or day to the team-building activity, or sense that this type of mixing wouldn’t be well-received by your staff, consider having a Book Club instead. Ask everyone to read the same book (you might provide copies so they don’t have to finance it) and give the team ample time to read the book and then hold a discussion to get everyone’s thoughts on it.

Not sure where to start? Here’s a list of recent business books that have gotten attention, or you might consider something by Malcolm Gladwell, who writes books full of engaging stories that have applications both for business and personal growth. Another option might be a book written by someone in your industry, such as “Shoe Dog” if you’re in retail or a creative field.

 

Volunteer together.

Believe it or not, almost half of respondents to one survey said their employer’s volunteer policies played a role in accepting an offer. While an ongoing volunteer program can be a powerful perk, even a one-day stint working as a group at a food bank, cooking a meal at a homeless shelter or assisting another non-profit that’s important to your team can help increase their bonds – and also give them the “helper’s high” that accompanies volunteering.

Not sure what project might resonate? Just ask! Maybe offer a couple of choices and either split up or let the group vote on which one might receive your collective power this time. Volunteering can be a huge win-win for your team and everyone whose lives they touch. And who knows…you might just spark an ongoing commitment for several of your team members.