Beyond Medical: How Supplemental Benefits Help Attract and Retain Talent

How Supplemental Benefits Can Help Attract and Retain Talent

In an increasingly competitive job market, employee benefits elevate companies in the minds of their current employees, as well as prospective workers. Below are some of the most important and sought after benefits. Content here was provided to the Council for Disability Awareness blog by benefits expert Phil Bruen, VP, Group Life and Disability Products at MetLife.

1. Disability Insurance and Income Replacement
Just one in four of today’s 20 year-olds will become disabled 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 complement 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.

1 Disability Statistics, The Council for Disability Awareness accessed
September 2018:

2 Chances of a Disability, Ibid, The Council for Disability Awareness 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.

Employee Benefits 101 for Freelancers and Entrepreneurs

Carol Harnett: Hello and welcome to the Financial Health and Income Network radio program. My name is Carol Harnett, and I am the president of the Council for Disability Awareness, a non-profit organization dedicated to helping working Americans understand their employee benefits and insurance options, as well as ways to make certain they still have an income stream if they’re temporarily out of work due to an injury or illness.

Today on our podcast, I’m pleased to be joined by Jennifer Fitzgerald and Mary Beth Storjohann. Jennifer is the CEO and co-founder of Policygenius, which is a company with a simple mission: to get people the insurance coverage they need and make them feel good about it, which I just love.

And [our other guest,] Mary Beth Storjohann, is the founder of Workable Wealth, which is a business specializing in financial planning for Gen Y or the Millennials, depending on what you like to call them.

She works as a writer, speaker, and a financial coach with individuals and couples in their 20s and 30s across the country to help them make educated decisions with their money. Mary Beth is also a paid spokesperson for the Council for Disability Awareness. We’re really pleased to be working with her and particularly in helping us reach out to the Gen Y generation.

So all of our companies really are based on the concept of providing unbiased advice to consumers about how to navigate the insurance and the benefits process. All three of us interestingly enough– because our topic today is specifically on freelancers and entrepreneurs and how they might want to start thinking about their benefits– fall into one or both of those categories, so we’ll be able to provide some personal perspective.

You can hear the full podcast or if you’d rather read than listen, we captured the transcript from the conversation below.

Welcome to the show Jennifer and Mary Beth.

Jennifer Fitzgerald: [00:02:23] Thanks so much for having us.

Mary Beth Storjohann: [00:02:25] Thank you Carol.

Carol Harnett: [00:02:27] You’re very welcome. Let’s get started as I have a question that’s for both of you, but I’m going to put it to Mary Beth first. When you think about– particularly as being somebody who’s in this space, Mary Beth, how should entrepreneurs and freelancers think about protecting their health, their income, and their savings?

Mary Beth Storjohann: [00:02:51] I think the first thing as a freelancer/ entrepreneur, you have to understand that there is no big brother and no employer looking out for you; you alone are responsible for taking care of and educating yourself in those areas in terms of risk protection – that’s one of the biggest things I see.

It’s actually really an overlooked topic. People think, “oh, no.” When I mention it to a lot of my clients, it’s like a deer in headlights, “I hadn’t thought about that.” So I think the biggest thing is recognizing that you are responsible for taking action in these areas.

And then from there you really need to step back and take a look at your lifestyle and your family. What would happen to your family’s lifestyle, to your income, in the case of a sickness or death or injury? Consider what your current goals are for yourself or your current situation and for the future.

What if something happened to you? Where would those goals end up? If you want to send your kid to college, would you still be able to do that? If you wanted to buy that new home? Those are all things to think about when it comes to protecting your health and income and savings. It is basically just figuring out if it is worth the risk of not having the protection or is this something that you should take action to buy some products that are out there to protect yourself.

Carol Harnett: [00:04:02] Great. Now, Jennifer, I’m going to follow-up the same question to you. You’re in a unique space in that you actually have employees, and we’ve never talked about this, but are you the type of employer who provides your employees with benefits or do you encourage them to go out on their own to do this?

Jennifer Fitzgerald: [00:04:26] It’s a great question, Carol. Given the mission of our company, we believe in providing benefits to our employees, but that might not be the case for other entrepreneurs, particularly small business owners when you have a smaller workforce. My advice to other small business owners and entrepreneurs is to consider a couple of things:

  • One is your budget and what you can sustainably afford. The last thing you want to do is offer, or entice employees with the rich benefit offering that you have to pull back later. It’s better to start modestly and then build up over time as your budget can afford it.

  • The second thing is consider the needs of your employees. If you have younger, single, healthy employees, their needs are going to be different than employees who have families, mortgages, things like that.

So, consider your employee mix, and consider your budget. Consider that employees do look to their employer to provide these types of benefits, and manage those expectations accordingly.

Carol Harnett: [00:05:25] Thank you. You know I am going to actually go off the cuff for a minute because you both inspired me a little bit.

Now, all three of us have made decisions to be in our own businesses. And I know for myself– and I think part of it is frankly my background; although originally a physiologist, I have worked in and around insurance and consulting for a good number of years– so when I went into my own business, I actually was really conscious about making sure that I had some particular types of coverage. I absolutely wanted to have health insurance. Obviously, I worked in healthcare so I know that’s important, and obviously,s now it’s the law because I started five years ago.

But then I did– in my case, frankly – I spent a lot of time in the disability insurance industry–  I wanted to make sure I continued to protect my income. As you both went out on your own, are there some conscious decisions you made to make sure that you had some really basic benefits that were important to you?

Why don’t we have Mary Beth start because Jennifer just spoke?

Mary Beth Storjohann: [00:06:30] As an entrepreneur and a financial planner, I think I’m the most risk averse person. So I always err on the side of conservatism, and therefore I was very conservative myself. When I made the transition from employee to founding Workable Wealth, I had already thought out some private forms of disability insurance and some life insurance for myself as well.

When I made that transition, what I thought about was my husband and what my income will look like going forward, and then again ensure that we are protected in all of those areas in terms of healthcare disability and life insurance because we’re a unique situation. We don’t have kids yet. But those are things that might be on the horizon. So making sure that we’re planning for today and also for the future because that’s kind of what you do. I work with Gen Y Millennials and in this age group you have to kind of balance. So those were definitely boxes I checked off.

Carol Harnett: [00:07:21] Interesting. How about you, Jennifer?

Jennifer Fitzgerald: [00:07:23] Like Mary Beth, I was also conscious of that when I was starting out as an entrepreneur particularly because I was leaving a corporate job at an employer that provided a very generous benefits package; great health insurance, disability, and life insurance.

I wanted to make sure I could afford to be on my own and what the options were to continue those benefits. It so happens that it was easy to convert disability and life insurance to an individual policy that I could afford for myself. The health insurance, comparing what I would be paying with COBRA versus getting my own plan on the marketplace, I decided to get my own plan because that was a more cost-effective option for me, but it’s definitely something that I considered.

And it’s advice for several other friends. The startup scene is hot. A lot of people want to be entrepreneurs and start their own company. The biggest piece of advice I give them is, make sure that, if there are any benefits that you have at work and that you want, to continue to do that because it can be difficult to get disability insurance in particular if you’re a brand new entrepreneur or a freelancer. The options are more limited, so consider those carefully before you leave a job where you have benefits coverage.

Carol Harnett: [00:08:41] Yeah, that’s actually a really good point. I already had two disability policies in addition to the one. I also was in a very rich corporate benefits package before I left and struck out on my own. But I had two policies: an individual policy that was an association policy, it’s a group technically, and then I also had a voluntary policy. And to your point when you want to supplement that with an individual policy, you have to show proof of income for a period of time so it can become difficult to do that. It’s very important to think through that.

Mary Beth Storjohann: [00:09:20] I was just going to say the same thing. My policy’s actually an association policy as well, so it is a group policy. I was able to get that through one of the organizations I participate in as an independent financial planner.

For freelancers and entrepreneurs out there, I would encourage you to look at that route too. If an individual policy is not an option, look to the group policies for any organizations you’re a part of  because that can be a more affordable option.

Carol Harnett: [00:09:44] That’s a great point. And I will want to get back to you at some point Mary Beth because I remember when I went out on my own, I was maxing out my 401k. And that is the one thing I will admit I did let go. I knew I was doing better when I got back on track with the future, but I wasn’t thinking about retirement at the time I was starting a business.

So I’m going to ask Jennifer a question specific to the most important employee benefit — whether we’re working for  somebody or working for ourselves– I think we’d all agree is health insurance. In some ways we can also argue it it does protect your income because we do know the connection with medical bankruptcy.

What option should entrepreneurs and freelancers consider, Jennifer, starting with health insurance, but then looking at the broader pieces around benefits?

Jennifer Fitzgerald: [00:10:36] Sure, for health insurance, there are a few options now, thankfully more than there were a few years ago.

The first is if you’re leaving a job with coverage, you know COBRA’s there, so talk to your HR person about what it would cost to extend your health insurance coverage with your group on COBRA. That’s particularly important if you have a doctor that accepts your current plan that you’d like to keep seeing.

The second place to go are the Affordable Care Act exchanges or your state health insurance marketplace. Loss of a job or or leaving your job is an event that allows you to enroll in health insurance outside of open enrollment. And particularly for freelancers or entrepreneurs starting out, your income most likely is going to decline from your full-time job, meaning you might be eligible for a subsidy to help you pay for the monthly premium. And if that’s the case definitely go to the state marketplace, which is where you have to shop to get that subsidy.

A separate option for entrepreneurs is the all-in-one options services that provide HR, payroll, benefits. They often will have access to to health insurance plans that aren’t available on the exchange to small businesses. Definitely worth a look there, too, if you have employees that you’re needing to cover.

Carol Harnett: [00:11:55] You know, that’s a really good point, and it’s one I often forget to tell people, that there are those services out there and they seem to be picking up steam given the number of small businesses that are being started. So a lot of us would argue it’s important at some point to have some HR assistance and I think that’s good for people to consider.

Another question for both of you, but we’ll start with Mary Beth this time: how should people think about protecting their income through insurance?

One of the places we default is disability insurance. But when we think about it, particularly when you’re new in your own business, it can become an expensive insurance sometimes, particularly on the individual side, depending on your age and the provisions that you want.

So we’re trying to expand some of the conversations to things like critical illness and accident insurance as a cheaper alternative to disability insurance and as a way to maybe make up the deductible for a high deductible health plan.

So how should people think about protecting their income Mary Beth?  

Mary Beth Storjohann: [00:12:56] First, I think they actually have to start thinking about it. A lot of the clients I work with in terms of education perspective think “it won’t happen to me,” but in reality it could and it might. According to the Social Security Administration– this is a stat that I quote to a lot of my clients– is that 1 in 4 of today’s 20 year olds will end up disabled before retirement age, experiencing some sort of a disability.

The average disability actually lasts up to like almost three years, and that’s definitely long enough to do some serious damage to your finances and also long enough to fully wipe out your emergency fund because in my personal finance realm we recommend typically a 3 to 6 month cushion for your lifestyle expenses in your emergency funds. If you’re disabled for three years and have no income that’s going to definitely do some damage.

I bring it back there right away to kind of make that relationship stickier and then the thing you have to think about is first, what will happen if you’re out of work for an extended period of time, where will your income come from? You know, what if you can’t go to work and how will you pay your bills? Do you have credit cards and student loans and mortgages that still need to be paid.

You have to really step back and a lot of people just don’t even consider those questions. They think they have the emergency fund in place, and they don’t consider the longevity of what a disability will look like.

And then, understanding, what disability insurance does. So it’s when it will kick in, how much of your income will it replace, and then obviously, I think, disability insurance will cover up to 66 and 2/3 [percent] of your income, so understanding that’s definitely a better replacement ratio than zero.

And so the thing you have to consider is for example, their short-term versus long-term disability and there’s elimination periods there, so when it comes to cost effectiveness, as I mentioned before, are there any trade association policies that you can take a part in. Is it perhaps the way that you can self-insure against the short-term disability, you know for that maybe 90 day period and then purchase a long-term disability policy and save yourself some money there.

So I think there’s ways to get creative with it, but it’s understanding, It’s really going back to understanding your personal financial situation and what it what it looks like now, what it could look like if you didn’t have your income any longer, and being able to fill in those gaps.  

Carol Harnett: [00:15:09] Great, and I’m sure Jennifer you have some places to fill in the gaps because for people who haven’t had a chance to look at policies {audio garbled}. I think your algorithms are really interesting. So I’ll let you explain them, but, you know, how does somebody who’s trying to sort through this idea of protecting their income, how do they start to make some choices? Is there an income threshold they should be thinking about, and what are their alternatives if they don’t have a lot of excess cash?

Jennifer Fitzgerald: [00:15:37] Sure, that’s it’s a great question and one that we see a lot, particularly for people who are self-employed. I completely agree with Mary Beth’s analysis in terms of you know, trying to self-insure for the short-term and looking at the cost-effective options for long term disability insurance beyond that. Association policies are a great place to start.

I’d add on two other pieces of advice. One is if you don’t belong to an association and you can get long term disability insurance, work with a broker who can help you tweak and design a policy that’ll get it, will likely get it down to a monthly cost that you can afford, particularly if you’re younger, you can typically get a policy that you can’t afford it might require some belt-tightening in some other instances, but I think all of us would agree that it’s really really important in terms of protecting yourself, not just your income but your savings, your assets, and what you put away from retirement.

If you live in a state where these policies are available, critical illness insurance and accident Insurance can be cost-effective alternatives if you can’t find disability insurance. And what those policies do is they pay a  cash benefit if you suffer an accidental injury, or if you get diagnosed with a critical illness. That cash you can use either to meet a deductible on your health plan or to cover living expenses because if you get diagnosed with cancer or you suffer a heart attack, odds are you’re going to be out of work for some time.

So those policies can help cover the “beyond the health” cost of those conditions. So if you live in a state where those policies are available, we  highly recommend them as a short-term and often cost effective alternative to disability insurance if you can’t get it.

Carol Harnett: [00:17:29] Yeah, I don’t….  I had the great privilege of meeting. Dr. Marius Barnard who is Christiaan Barnard’s brother. And he, the two of them, were actually involved in the surgery that did the first human heart transplant in South Africa many years ago.

And most people don’t know that Dr. Marius Barnard actually created the concept of critical illness insurance. Because he used to have patients that always died. And once they developed heart transplants, he had patients who survived but were wiped out financially and so that was his reason for creating critical Illness, but I think it’s interesting at the end of his own life– and he passed away last week– he developed a very unique cancer. And he used– he had critical illness insurance– he used the lump sum payment to pay for the experimental treatment that his carrier wouldn’t. So it was an interesting application of critical illness insurance. So sometimes we don’t always realize there’s a way you can unanticipatedly benefit from having that kind of insurance.

So Jennifer I’m going to actually take a question back to you again and say are there are other products beyond health insurance and. disability insurance and even the cheaper alternatives of critical illness and accident when available. Are there other products that entrepreneurs and freelancers should consider, could consider perhaps maybe as their income flow gets a little bit better?

Jennifer Fitzgerald: [00:18:59] Definitely. So, you know the first thing that we look at beyond those needs that you mentioned is do you have a need for life insurance. And not everybody does, but if you have a dependent spouse or children or even if you have a business partner that you are part of so a lot of a lot of entrepreneurs would get life and disability insurance not only to protect themselves, but to protect the business and their business partner is going concerns.

And beyond that, you know, it’s often overlooked, but protecting yourself against business risks. So, your laptop that you use as a freelancer, you know, sometimes there’s liability that you could be on the hook for, as an entrepreneur, as a freelancer, but we always advise folks don’t overlook the business risks involved in your day-to-day as an entrepreneur or a freelancer. So, you know, there are some very affordable policies out there for property protection, liability protection, and to definitely not forget about that as as part of your overall risk management tool box.

Carol Harnett: [00:20:00] You know, I think you bring up an interesting point. My sister is also an entrepreneur and she didn’t go the VC route, but she did have private individual investors and their requirement was for her to have key man insurance, which she was able to address via a disability policy that protected the company.

So I think sometimes entrepreneurs don’t forget, you know, they don’t, they just are looking at their immediate situation and sometimes they aren’t looking at growth and what you might need to attract additional money or in cash sometimes when you want to advance the business. So that’s a really good point.

Mary Beth, is there other things that that you find either for yourself or people you counsel who are freelancer entrepreneurs that they should consider?

Mary Beth Storjohann: [00:20:44] You know, I think Jennifer checked all the boxes there. Errors and Omissions insurance, liability insurance and life insurance if you need  it.

I think for me – working with a lot of entrepreneurs and freelancers, life insurance is a big one. I work with a lot of younger couples and people who are starting their own businesses. And so it’s more than just telling them hey, you need to get life insurance, and understanding the questions to ask themselves around that. It’s important to understand what the values and goals are for your family.

One of the big things people will get is a couple hundred thousand dollar policy and they think they’re good to go. Ultimately, what it comes down to is whether your family is fully dependent on your income or another person’s income. Having that conversation and if you have small children at home, what happens if something happens to one of the spouses and you pass away and there’s one of you left? Would your significant other want to go back to work full time, or is there going to be a reduction in income there as well? It goes back to if you have a mortgage and if you want that debt wiped out so there’s no stress and you know your partner has the home fully paid off and can stay there without concern.

There’s a lot of questions you have to ask in terms of understanding how much coverage you actually need. That’s the one I really focus on with clients is disability and life insurance. There’s a lot of questions there because if something did happen, it will obviously come to a lot of changes in your life, and understanding what you would want to happen if unfortunately something did happen to you.

Carol Harnett: [00:22:15] Thank you. You both inspired a thought I actually didn’t consider asking you until now, which is that a lot of us, when we think about entrepreneurs and freelancing, we think about people early in their careers or maybe people who’ve worked for, you know, about 10 years or so and we’re seeing them make a break.

But in 2008, we saw a different trend with entrepreneurs, and that was — in some industries, massive– layoffs that we saw people in their late forties, fifties, and even early sixties becoming entrepreneurs and freelancers. Would you give different advice to someone who– let’s pick an age– let’s say is 52 years old? Would you give them different advice that you would give to somebody who’s earlier in their career? Let’s say late twenties or early thirties.

And it can be either one of you by the way.

Mary Beth Storjohann: [00:23:10] I’ll go first on that one. I know for me my financial planner answer is: It really depends on their situation. So if they’re in their fifties and they’re still going to be working for the next twenty years because they’re playing catch-up with retirement, that’s a different look than if they’re in their fifties and they have a short timeframe and they have the retirement cushion and their self insured by then.

As you get older it definitely gets into more of a detailed specific answer. You know, a twenty- and thirty-year-old, you can typically throw  out a general number that can give a bigger protection for the long term, but as you get older, I think we need more details, more specifics.

So I was going to give you the generic “it depends,” but I truly believe it. You know, I think as you get older too and your net worth grows, you get more into the types of policies that might make more sense in terms of, life insurance, term versus whole life. It really depends on your net worth and where you’re at in terms of retirement.

Carol Harnett: [00:24:05] Great.

Jennifer Fitzgerald: [00:24:06] I would agree with Mary Beth that it does get more complicated if you were in your fifties and you’re either working to catch up with retirement assets or you’re stringing together some freelance or part-time jobs because of a layoff. The complexity is that insurance is definitely more expensive whether it’s health insurance or disability insurance– and you might have other needs such as long-term care start to surface.

So it’s definitely a more complicated situation and the advice is going to be different. In some cases, disability insurance might not be available if there’s been some adverse health conditions in which case self-insurance is going to be possibly your only option. The landscape definitely changes and it’s one of the reasons why for young people in their twenties and thirties, that we we encourage them to get the policies that you need early, lock them in with a non-cancelable policy if you can, because you never know, what’s going to happen twenty or thirty years down the road.

Mary Beth Storjohann: [00:25:07] Exactly. That’s exactly what I tell my clients.

Carol Harnett: [00:25:10] You know and it makes me want to close with a question, that I tipped my hand at earlier in the show, and that is when I was going in my own business, I had Mac. I was one of those people when I first entered my career my Dad’s and Mom’s counsel to me was, “You know, we don’t care, how much money you’re making, we don’t need to know, but even if you’re not making a lot at least put something in savings for retirement – even though you’re 24 years old, 25 years old.” Often when people start their own businesses, retirement isn’t something people think about. I knew I was finally doing better in my business when I was confident to start developing vehicles to enhance my retirement future.

What is your advice as an entrepreneur for when you should start paying attention to it particularly if you start when you’re younger – because actually, it can be smaller amounts of money and a little bit easier.

Mary Beth Storjohann: [00:26:13] The earlier you start the better, and that’s always my aim with clients, starting small and putting something away. I work with twenty and thirty year-olds, you know, different, varying incomes, but most of the time especially with the variable income, I think it’s really hard.

That’s the biggest thing for an entrepreneur, the biggest thing to tackle, especially when you’re starting off, is the huge swings that you’re experiencing and actually trying to manage those. There’s lot of cash flow work that comes into helping my clients understand how to actually set up a budget and not minding setting up the emergency fund. First we need to set up your lifestyle cushion fund to pull from in those lean months, so you’re not constantly playing catch-up and feeling like you’re on that hamster wheel.

One of the first things is understanding how to manage your cash flow. Once you have that under control, you should be able to get yourself on some sort of ongoing budget, where you’re treating your retirement savings like you’re treating it as a bill. It’s something that you have to pay each month. Basically you’re making it manageable. The earlier you start the better, I always say whether it’s $25 or it’s $100 my goal is at least to be putting $100 away into an account and taking advantage of those things. Obviously, if you have a kind of debt, you want to tackle those things first. You want to make sure you’re building up the cushion, emergency cushion, and tackling the debt. And then retirement comes after those things, which is really hard as an entrepreneur.

That’s one of the big things too, I will say, is a lot of entrepreneurs who are starting their own businesses take on a ton of debt. And it’s kind of like that. There’s some sort of mindset that’s out there right now with personal development. You’re throwing money at the business; it’s okay because you might fail, but eventually it’ll catch back up and you’ll be rich or whatever that is. Breaking that debt mindset is also a big thing.

From there take advantage of the retirement plans that are out there for you. For solo entrepreneurs, there’s a solo 401K, there’s a SEP IRA, and there’s a solo IRA. Those are the ones that are going to allow you to shelter some of your income and basically save on taxes.

For younger clients who are in their twenties and thirties, one of the best things to do is still take advantage of that Roth IRA if you can. Once you get your income above above that, then you want to take advantage of the SEP IRA or solo 401K. But I say doing Roth IRA when you’re young, and again, just starting with those automatic contributions and treating it like it’s part of your bill payment, is going to be a huge thing to do.

Carol Harnett: [00:28:34] That’s great advice. Do you have anything to add to that, Jennifer?

Jennifer Fitzgerald: [00:28:38] No. Mary Beth is the expert here and she’s absolutely right that as an entrepreneur who is struggling with a variable income and doesn’t know what six months will look like, let alone what retirement thirty, forty years, down the road looks like, it’s definitely something that’s easy to put off. The way that I found that I can do it is also just treating it like a bill and then it’s something that you don’t touch or or think about.

Carol Harnett: [00:29:05] Exactly, and that’s exactly how I wound up handling it, but to both of your points, I didn’t start thinking about it until there was less variability in my income flow and kind of more money saved away.

The one thing that all of us have talked about is– but it’s because the nature of the variability of the business– that sometimes we take too much on at points because we’re afraid for the periods when we’re going to be lower than we were hoping we would be in. And that’s sometimes both the thrill and the challenge of being an entrepreneur and a freelancer.

I want to say thank you to both of you. We did this exactly in the time frame we planned. In 30 minutes, for our audience, for people who either are entrepreneurs or freelancers or considering becoming one, this is terrific advice, from people who are experts in the area and are also entrepreneurs and freelancers, to take in mind as you move forward.

Obviously health insurance is a requirement for most of us by law right now, so you want to make sure you do that. But you also do want to take a look at some other things, particularly protecting your income flow, because we are all sensitive to what a small change in your health can do to your income flow. We want people to consider that and cost compare life insurance, and as you’re doing better, to start thinking about putting away at least some money toward retirement and taking advantage of some of the vehicles that are out there.

Thank you everyone. Thank you Jennifer and Mary Beth for your participation. Please check out their companies. They’re wonderful companies, Policygenius and Workable Wealth, and until next time we’ll talk about finance and health.

Thank you everybody.  

Mary Beth Storjohann: [00:31:03] Thanks.

Jennifer Fitzgerald: [00:31:04] Thank you

Being Out of Work Doesn’t Mean Being Out of Money

Helping Employees Understand What’s at Stake
When a Health Event Keeps Them from Working

Employers in America offer health insurance benefits to attract and retain employees, and the open enrollment period is a chance for employees to review and/or change their coverage. However, health insurance does not cover income lost due to a health event that prevents an employee from working.  

Below, Fred Schott, Director of Operations for the Council for Disability Awareness, provides a list of considerations for income protection in the case of disability due to illness, injury, or pregnancy.

1. Know What is Protected Under FMLA

(FMLA), which requires up to 12 weeks unpaid, but job and benefits protected leave in any 12-month period for employees who are unable to work because of their own serious health condition and have worked for their employer for at least 1,250 hours in the 12 months before taking leave. State and local variations exist; click here for more information.

2. Paid Sick Leave is Helpful, But Limited

A growing number of states (and municipalities) have enacted laws requiring paid sick leave. One of those laws may apply to your workplace. If that’s the case, it’s possible your existing paid time off (PTO) program may satisfy the requirements. Click here for more information. But remember: paid sick leave rarely covers more than one or two weeks, and that usually is not enough time for full recovery from serious illness or injury.

3. Protections Under Short-Term Disability

If employees are out of work for more than a week or two because of a serious health condition (and this can include pregnancy complications or postpartum recovery), short-term disability insurance (STD) can provide income replacement, typically at 50% to 66⅔% of pre-disability earnings, for up to 3 – 6 months. Many employers provide the equivalent of STD coverage as part of their salary-continuation plan. Some states have mandated (statutory) STD coverage, but benefit levels are typically lower than under private plans, so in those states employers often provide supplemental coverage. Who pays for the coverage—employer or employee—is an important consideration: Benefits payable to employees are tax-free to the extent they’ve paid for the coverage and vice-versa.

4. Protections Under Long-Term Disability

Long-term disability (LTD) insurance is designed to kick in when STD coverage ends. As with STD, taxability of benefits depends on who pays for coverage. Most group LTD plans have two stages: For the first 2 – 3 years, people are covered if their disability prevents them from performing the duties of their own occupation. After that a more stringent definition of disability applies; it’s closer to what’s used by the Social Security Disability Insurance (SSDI) program. People who qualify for the second stage continue receiving benefits for a specific length of time or until normal retirement age, and payments are reduced by any SSDI benefits received. Individual LTD plans, on the other hand, usually provide “own occupation” coverage until normal retirement age and do not offset for SSDI benefits—but not all employees will qualify for individual coverage.

Click here for more information on paid family/medical leave programs.

Click here to read Fred’s full article, “What Happens When a Health Event Causes Your Income Stream to Run Dry?”

For more resources from The Council for Disability Awareness check out DisabilityCanHappen.Org.

How Employers Can Influence the Move to Value-Based Healthcare

Steven Schutzer, M.D., president of the Connecticut Joint Replacement Institute, and Carol Harnett, president of The Council for Disability Awareness, share a discussion on this CDA podcast about value-based healthcare — a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.

The discussion covers a wide variety of topics with a focus on helping employers understand the positive impact VBHC can have on employee health and productivity and health plan performance.

Topics discussed include centers of excellence, why this movement is important and relevant to the entire population, challenges and obstacles in using a VBHC approach and how to overcome them, and how employers can measure results. 

Carol Harnett: Hello everyone. This is Carol Harnett. I’m the president of The Council for Disability Awareness, a non-profit whose role it is to educate employers, employees, and financial advisors and consultants about employee benefits in general and specifically about disability and income protection whenever we can.

Our show is called the Financial Health and Income Network, and today I am pleased to host a very special guest Dr. Steve Schutzer. Dr. Schutzer is the president of the Connecticut Joint Replacement Surgeons, the physician executive for the orthopedic service line at Saint Francis Hospital and Medical Center in Hartford, Connecticut, which is where I’m located as well. He’s also the physician director of the Connecticut Joint Replacement Institute at Saint Francis Hospital and Medical Center. I have had the pleasure of knowing Dr. Schutzer for about a year, although I knew of him for many years because he is listed in Connecticut magazine as one of the best physicians in the state, particularly for joint replacement.

Thank you for joining us, Steve. We’re so glad to have you here with us today.

Steve Schutzer, MD: Thank you so much, Carol, for having me. It’s a pleasure to spend the time with you.

CH: Anyone listening to this show can benefit from our conversation, but our targeted audience today is employers. The goal we have for the show is to help employers understand a concept that’s been around for a little while called value-based healthcare.

Some employers may have heard this phrase within the context of something called “value-based insurance design.” Today we wanted to walk you through some of the basics of what value-based healthcare is, ground you in it, and give you enough information that you can talk about this concept with your employee benefits broker or consultant, or with an insurance carrier.

Steve, the place I want to start is with the basics of value-based healthcare, and why you choose to get involved in this initiative?

SS: So let me start with the second part of that question, Carol. As you mentioned, I’m an orthopedic surgeon with a special interest in arthroplasty — total hip and total knee replacement. And I became dissatisfied, disgruntled and even say, embarrassed at the state of our healthcare system about 12 or 15 years ago and I felt that there was a moral imperative to try to improve it. I read some books about value-based healthcare written by Professor Michael Porter on redefining healthcare and was smitten and overcome with a passion for trying to move our system to value.

Now, what is value-based healthcare? Fundamentally it is very simple. It’s a delivery model in which we as providers to hospitals and physicians are paid based on our outcomes. I mean, it’s not unlike any other sector of our economy. We are rewarded for outcomes. And this would replace the decades-old entrenched system known as fee-for-service, where providers are paid for their volume irrespective of the outcome.

Put another way, Carol, if you have a bad outcome and you got to repeat it. Well, guess what? You get paid again. And this just incentivizes more and more care delivery without any respect in terms of the outcomes that are anticipated.

You know, I love that explanation because at its core it makes so much sense. I started my career on the healthcare side focused in sports medicine and then in the larger circle of rehabilitative medicine and industrial medicine. And I think what always took me back when I talked with people from the general population, or even relatives, was they would say: Well, I saw an orthopedist for my knee pain and he or she said there’s really nothing I have to worry about. And I said: Ok, can you tell me more about that? And you’d hear some pretty significant symptoms. And you’d ask if they’d ever had physical therapy and sometimes they had and sometimes they hadn’t. I even find in the general population in these conversations a lack of knowledge that there can be a difference in quality, that there can be a different outcome. That they paint all orthopedic surgeons with a similar brush; all physical therapists with a similar brush.

CH: How would you tell an employer who is also a person first, who doesn’t have a background in medicine, why value and outcomes are important even though that seems like such a basic question?

SS: You actually have articulated the question and the answer. It is extremely important and there is great variation. The problem is, Carol, that I can go on Consumer Reports and learn more about a toaster oven than I can about my surgeon who’s about to take my hip or knee. And that’s just unconscionable and unacceptable.

I’m a simple-minded guy from the Bronx as you know, and there’s something called the health care value equation, and it’s  very simple. The numerator are the outcomes that matter to a given patient for their particular problem. If it’s prostate cancer and maybe impotence or bladder control, that’s what the patient really cares about over the true cost — not the charge — but the true cost of delivering that care, and that becomes a mathematical equation upon which providers can be rated and judged.

The problem is finding information about real outcomes, even if you were a very sophisticated healthcare shopper. Even YOU would have trouble. Correct, Carol?

CH: That’s absolutely correct. I have spent a lot of my career in healthcare and then insurance and then to consulting, and I’ve had the good fortune of getting to know people like you and others. Frankly, if I ever had a non-orthopedic problem, I’d probably call you and say:  Okay, this is the problem I have. Out of all the physicians you know, who is it that you would go to if you had this situation. But most people don’t have access to that kind of a network. And it’s really, really frustrating. I think most people, including our employer listeners, don’t think about it until they’re in a situation that’s a little more challenging or a little scary, and they start to realize that, perhaps, staying even in their local community may not be the best decision for them, and that’s the first time you ever think about it.

I knew you from the original rankings at Connecticut Magazine listed once a year on the best physicians. Originally the list was created by surveying other physicians and asking them the physicians they considered to be the best in their respective specialties. I spent my time in healthcare in the greater New York and New Jersey area, so I didn’t know anybody here when I moved into the area.  So, Connecticut Magazine became my way of looking and finding even a good primary care physician. So, that’s one of the challenges. You can imagine employers who are listening thinking: Okay, so I want to get my employees value; I want to get them good care, good outcomes. What do I do?

I will tell those employers — because I spent a lot of time in the health and productivity space — you want your employees to go to a good physician because you almost always see your employees come back to work sooner, be more productive when they return, and if they haven’t left the workplace, which is the ideal situation, they also tend to be more productive while they’re being treated. They tend to be at work more often.

What we’re both sort of foreshadowing is something that can go beyond physicians, and that is if you do need a procedure.  You would either have to go to a hospital or an outpatient surgery center or something along those lines, so there is a concept of value called a center of excellence.

Can you help audiences understand what that is about?  What is a center of excellence?

SS: Yes, and I think that is again is a great question. Unfortunately, Carol, that term — “center of excellence” — has been bastardized to some extent because anybody can claim they are a center of excellence. But with time and over time various organizations are accrediting entities as being a true center of excellence. And each has their own proprietary criteria looking at whatever metrics they can access. Unfortunately, most of this data as you know comes from CMS administrative claims databases, which are based on coding and you know there are all sorts of potential vagaries and inconsistencies and flaws. But, be that as it may, centers of excellence do make a difference.

And you know in our Forum coming up on December 6th and 7th, we’re going to be highlighting two types of centers of excellence: one being virtual with a very fascinating company called AiR Healthcare from Minneapolis — the Wainwright company — and the other one being a physical center of excellence here: the Connecticut Joint Replacement Institute.

And here’s some very simple data for the employers who are listening. This is data from another source, but it’s factual. It was from a very large employer in the United States where they referred all of their patients who were in the queue for spine operation to a spine center of excellence and 50% of them, Carol, never had a spine operation.

Now, forget the millions of dollars of savings. Just think of the human misery of those fifty percent of patients that would have had surgery that they never needed. Now that’s for spine. Spine is difficult because there is a lot of gray area, but joints to me are kind of cut and dry.

This is the way I think. If somebody has end-stage arthritis of the hip and severe pain and can’t walk, they need a joint replacement. The same source of information from a very large employer showed that 20% of the patients scheduled for joint replacement were pulled out of the surgery queue and sent to a center of excellence, and never needed a joint replacement. And that’s just striking information.

CH: I will concur with the information you’re sharing. When I worked in sports medicine and physical rehabilitation, we had a lot of people with spine complaints, including elite and Olympic athletes. And some of them — even the athletes — would often want a quick fix.

We did research at the center I was at — and I worked at a couple of world-class rehabilitation institutes, including the Kessler Institute for Rehab in New Jersey — and we’ve done research on the topic, which we’ve seen replicated in other places and that’s when people go through back surgery, in five years, they have the same outcomes as people who went through physical therapy and returned to full activity.

And I obviously know on a patient level and a one-on-one level how important that is to share this information. But since so many people receive their health care through employers, I’m really happy we are about talking about this topic.

I will add a little bit of information to the data you shared. A person who’s become a friend of mine is Tom Emerick, who was the global leader of benefits for Walmart. He’s a very dear friend. I used to consult for Walmart when Tom was the leader there. Tom really was one of the first employers who brought in a centers of excellence model. He always tells the story about contracting with Mayo and contracting with Cleveland Clinic. The first thing they offered to any covered associate in the Walmart system that who needed an organ transplant was to go to one of these two centers of excellence. Their family member could come with them. All expenses were paid; all co-pays, all the deductibles were waived. Fifty percent of the transplant patients were turned back because they didn’t need the transplant. And that to me was one of the most shocking things I ever heard. How is that even possible?

Walmart became a real leader in this field as did many others who quickly followed suit. So, I can’t emphasize enough to employers how when we think about centers of excellence, we think about big things like that, right? We think about organ transplants.

But I will tell you from having worked in the disability insurance side of the business for a while that that’s really a small percentage of what’s happening. Big dollar ticket items from a medical perspective, but a small number of people from a population perspective. That’s why things you’re talking about such arthroplasty and spine surgery and even more common become more important to find these value centers — these centers of excellence. Places where you know your employees and their family members — if you cover their family members — are going to not only get great results, they’re going to get long-lasting great results: meaning we don’t have to do things called revisions and go back in and do surgery or have complications because they’ve been in a much better place.

SS: That’s right. We’ve just covered very briefly three different procedures: organ transplant, total joints and spine. And we’re talking about 20% to 50% of unnecessary major operations. When I drill down in that data, I was really interested that this large employer on par with Walmart had saved twenty million dollars in that year. That’s a lot of money.

What I really liked about that experience was that two-thirds was saved on the quality side and only one-third was cutting a discount. In fact, for the employer — because many of these patients are travel patients — they netted out zero because they got a deal from the provider for this new volume of patients but it cost them to transport the patient and family. So that netted out zero, but the real value was going to a center of excellence and deciding: You know what? This patient doesn’t need surgery, or having surgery and reducing those risks of complications and re-admissions.

CH: Absolutely, very well said. And I do want to remind our listeners at this point about something we talked about a little bit before getting on the air, which is that not only is this movement important — and we are certainly directing our comments right now to just the employee population and their family members if they are covered. But this is relevant to the whole population. And I would imagine you see a mix of both people who are still working and people who are retired in the work that you do. And just for a brief comment because some payers by the way as you provide retiree medical care: How does this apply to the entire population?  

SS: I don’t really discriminate in terms of whether they’re employees or not employees, or their age bracket. Half of my practice is Medicare and actually half of my practice are commercially insured. So, the average age for a total hip replacement in my practice is about 58. There are not necessarily older. That’s the average, which means I’ve got some in their 40s and some in their 80s and some even in the 90s. So, I don’t really discriminate between what demographic they come from.

SS: Patients are a little more demanding today. They want to get back on their feet quicker. And, again, when you have an entity that’s focused as we are like a laser beam on arthroplasty, you just keep getting better and better: refining your outcomes, refining your processes, to drive better value for the patient.

CH: Wonderful. So well said. Now, we’re talking about all the positives that are involved in value-based healthcare and we certainly know that there can be some obstacles and there can be some challenges. Can you talk a little bit about that and what employers can do to help overcome those problems?

SS: Carol, that’s something that we’ve been thinking about here for very long time. We’ve heard interesting comments from the payer community that the providers are “tone deaf.”

And here we’re thinking as providers: Where are the employers? We’ve got an incredible product — many other people do as well — and it’s just not gaining traction. So, we’re wondering where they are. They’re wondering where we are. So, something tells me something is in the middle and not making this happen. As you learn about the complexity of the healthcare ecosystem, it becomes clear that there are many intermediaries, some of whom are not completely aligned with value. There’s nothing specifically in it for them and overcoming that takes time.

Listen. It’s a 3.2. trillion dollar a year industry of which one-third easily is waste. But that’s one trillion dollars that you’re talking about taking from somebody’s pocket and they don’t like that. And there’s all sorts of push back and political things and lobbying that that impede this movement to value.

As you know last year, we had our first annual Moving to Value forum at the Del Mar hotel in West Hartford, CT. This year, we’re having our second forum at the Marriott in Hartford. But last year we focused on obstacles: obstacles to moving to value. And we looked at it from the perspective of the provider, the payer and the employer. And each of these stakeholders have challenges.

I would say from my perspective the biggest challenge I see gets down to benefit design. If patients are not incentivized to move to centers of excellence to change their behavior, it’s just not going to occur. If it occurs it’s going so slowly that it’s not measurable. So if I want to implore employers, I would ask them to get involved at the benefit level and really start to look at this: Does this benefit design really move patients to higher value, or is it more entrenchment in old models and old designs?

You know, again, there are obstacles all along the ecosystem. For us it’s data, its position alignment. We’ve been able to make some great changes so our positions, Carol, all abide by protocols.

We have 18 clinical protocols, which we abide by so we can measure it and look how we’re doing. That’s a big challenge to get orthopedic surgeons to agree to anything, but we’ve been able to overcome that. From the employer perspective, I can tell you that if we don’t start shifting market and rewarding the providers that are spending time and resources — a lot of money — then I’m afraid it’s just going to move slowly.

There was a great piece the other day from Michael Thompson in which 60% of employers are not capitalizing on their opportunities to address the health care waste despite the fact that they all recognize there is substantial waste and inefficiency.

CH: Much like you I grew up in the New York City area except I’m a Staten Island girl. And the story you’re telling, I’ve tried to tell employers, in particular because that’s where I’ve spent the majority of the latter half of my career in working with and educating and doing design work.

I grew up on what’s called the South Shore, which means if you live on that shore, you go down to the end of the island and you can see New York City across New York City Harbor. And I can’t tell you how many people I grew up with — and when I was young, it would be more of their grandparents and sometimes their parents — who would have cardiac issues or cancer or some major health condition. And instead of driving across the Verrazano Bridge through Brooklyn to Manhattan, or taking the ferry and going into one of the world class centers of medical excellence, they would have their surgery at St. Vincent’s or Staten Island Hospital, which I’m sure are fine for average things. But you don’t give up going to world-class cardiac center when you’ve got a pretty complicated cardiac condition when you can see the place where you can get the best care. But that happens all the time.

People go to places they’re familiar with and so you have to incentivize them. I’m so glad you brought that up. Employees have to be incentivized to do it, but the employers are also going to want to incentivize physicians and reward physicians who are giving great care and producing great outcomes.

Of course my prejudice extends all the way to people when they’re out of work. So even if I were to evaluate the services that your practice does I would be like not only do you get great medical outcomes, but your patients are back to work sooner and they’re not going back into the OR because some mistake has been made or they don’t have sepsis or they have a hospital-acquired infection. Those all become important things because it gets them back to work, feeling good, and going back to their lives. And that’s really important.

There are two things I want us to talk a little bit about before we run out of time. You want to talk about the upcoming Forum because I will tell people, again, I knew Dr. Schutzer on paper.  And then I got to meet him about a year ago when I was invited to go to your first forum and was astonished.

And please don’t take that the wrong way. I was astonished by the quality of the conference and the types of people who were there. So, I want to talk a little bit about that. And I would like you to close out our talk on value-based healthcare by explaining how an employer can measure — beyond what we already discussed — that it is working for them.

SS: So, first of all, the Forum is December 6th and December 7th. We are having a Thursday evening venue at the Marriott and that’s going to focus on pharmaceutical costs: “Stop Overpaying for Pharmacy” is the title. We’ve got two fabulous speakers, and then the next day on Friday we’re going to focus on primary care modernization. and centers of excellence.

As far as measurement, I always say this: orthopedic surgeons are not historically known to be a group that’s really very concerned about spend. We use expensive trinkets. Our tools are expensive; our widgets are expensive; and we’ve never really paid attention to that because, guess what? We don’t pay for them. Someone else does.

So, how have we been able to take these 10 formerly competing orthopedic surgeons with completely different motives, bring them together 11 years ago, align their interests without any economic incentive, and pull off what we’ve done here. And it comes down to data.

We’ve got a very rich database of 30,000 patients. The data is clean, credible and actionable, and it helps change behavior. So, I would ask employers when their reviewing their contracts and when they’re in discussions with provider groups to ask to see their data. I wouldn’t even sit down with a provider without that data being available.

So they shouldn’t ask to see it. They should really demand it. Then the question is: Is the data clean? And that gets very difficult because you can manipulate data anyway you want.

A very quick case in point. I’ll point myself out, Carol. A few years ago, ProPublica came out with rankings of physicians, and I looked at myself as a hip surgeon / knee surgeon. I thought it was decent.

Well, I got I got listed as a high-risk provider for hip arthroplasty. I was upset by that and I did a little digging. It turned out that I was taking patients back to the operating room because of bleeding in a day when we were using Heparin as an anticoagulant. I was taught by my mentor to not to put a bandaid on it. Take them back and wash out that bleeding. So, I thought I was doing what I thought was best for the patient, perhaps saving infections. That very next day another ranking agency came out and gave me the only five-star hip replacement surgery in the state of Connecticut. So, am I a hero, or am I a zero? So confusing to me. You have the same data.

So it is not easy. You have to dig deep. You have to look into the information. Perhaps recruit some other folks like Jeff Hogan and Paul Grady who really understand this ecosystem to provide some insight into that.

CH: You’re so generous to share a personal story like that because I can’t imagine what your face looked like when you saw yourself being lowly-rated when that is not generally how you are known in the Greater Hartford area or the Connecticut community.

I have a friend who is a specialty reconstruction surgeon. Not only does he only do breast reconstruction for women who’ve had mastectomies, but he does only what’s called the DIEP procedure, which is where a woman, as you know, donates some of her own body tissue to form the breast mound.

What I’ve learned from him is there are only 12 centers around the country that do this. It’s considered the state-of-the-art procedure. But the normal flap failure rate, which is really what these breast mounds are called is 30 percent. In his practice and in his hospital it’s only one percent. But the only reason why I know that information is because I know him. And that’s the challenge that we still have. How do we get that information shared in context?

Well, this time has just flown, and I know that we’re counting down the last minute. So, I want to first of all say thank you so much for making the time to do this. I know how incredibly busy you are in all the work you do in your own professional practice, the work you do with Moving to Value, and the upcoming Moving to Value forum.

I will highly encourage people to attend this forum because I’ve attended myself before and will be attending again. This is well worth your time and effort, particularly if you’re an employer in the greater New York and New England area. Consider coming to the Moving to Value forum, which people can find out more information about at It is being held in downtown Hartford, and we hope to see you there. Thank you so much, Steve.

SS: I really appreciate your time, Carol. I can’t thank you enough for this opportunity. Have a great weekend.

CH: You, too, and thank you to everyone who’s listened.

4 Facts to Help Employers Understand Value-Based Healthcare

Value-based health care is an important trend in delivering quality care to consumers in general and, in group health insurance, to employees and their families. It is a delivery model in which self-insured employers and health insurance carriers compensate providers based upon their outcomes, instead of a negotiated fee for services rendered. Data has shown that this compensation method can be impactful not only for patient recovery and reducing time away from work, but also in the amount of waste that occurs in the medical field.

The following tips reflect the highlights captured from the upcoming podcast hosted by Carol Harnett, president of The Council for Disability Awareness and Dr. Stephen Schutzer, president of the Connecticut Joint Replacement Surgeons, physician executive for the Orthopedic Service Line at St. Francis Hospital and Medical Center, and the physician director of the ConnecticutJoint Replacement Institute at St. Francis Hospital and Medical Center.

1. What is a Center of Excellence?

Many consumers with complicated diagnoses often wind up receiving complex treatments—such as spinal surgeries, joint replacements, or organ transplants—without access to a network of specialists who produce the best outcomes in their fields of expertise. Instead, people will choose to see a local physician for treatment regardless of that provider’s performance history. Employers, however, possess the ability to align their health insurance plan design with centers of excellence where the best patient outcomes are achieved.

2. Giving Employees Access to Quality Healthcare

Providing a competitive benefits package helps employers in their effort to attract and retain talent. Health insurance that gives employees and their families access to the best available care garners employee loyalty and appreciation. With value-based healthcare, workplace productivity increases, as employees get back to work more quickly and waste associated with unnecessary procedures is reduced.

3. Employers Face Challenges in Moving to Value

It remains in the best interest of both Employer and Employee to have good health coverage – especially in cases where good care can be the deciding factor in an employee’s prompt return to work time and mitigating time and suffering associated with more complex procedures. According to Dr. Schutzer, the overall healthcare ecosystem is complex, and the various entities are not always aligned. Research indicates that the health care industry often gets stuck in its old ways. As a $3.2 trillion dollar business, different players may resist change, especially when saving money for some means taking it away from others.

4. How to Move Beyond Obstacles – Change Happens When Employers Engage

Dr. Schutzer named health insurance benefit design as one of the biggest obstacles to moving toward value-based health care. Employees need incentives to opt for a center of excellence for their care, and the onus largely falls on employers to encourage its workers to choose health care quality over convenience or habit. To do this Dr. Schultzer recommends employers:

  • Do your homework when choosing contracts for health care providers for your insurance plan; make sure to review the data carefully at the benefit level. Dig deep.
  • Make sure the data is clean, and then recruit experts to provide insight.

For more resources from The Council for Disability Awareness check out DisabilityCanHappen.Org.

Paid Leave – What Is It and How Does It Work?

Employees who want to learn more about how the Family Medical Leave Act, short- and long-term disability insurance, and paid leave help them protect their jobs – and receive an income – when they cannot work due to illness or caregiving responsibilities need to look no further than listening to this podcast.

, president of The
Council for Disability Awareness
, interviewed Heather Cook from Lincoln
Financial Group
who is an expert on disability insurance, and paid and
unpaid leave.

If you’d rather read than listen, we captured the transcript
from the conversation below.

Carol Harnett: Hello! My name is Carol Harnett and I am the President of The Council for Disability Awareness. We are a nonprofit group whose mission is to educate employees and working adults — along with their employers and financial advisors — about benefits in general, the importance of income protection, and how people can insure their income so if they need to leave the workplace — most for a temporary period of time; some for a long-term period of time — they can still receive an income stream.

October is open enrollment month for us and for many people that are listening on the show. Our aim today is to provide people with a real primer – a step-by-step explanation of how leaving the workplace can operate particularly from the point of view of protecting your job number one, and number two receiving an income while you’re gone.

I’m really pleased to have someone who is a specialist in this area. My guest today is Heather Cook. Heather is a regional vice president for short-term disability and leave operations at Lincoln Financial Group

And we are happy to say that Lincoln is a member company and a supporter of The Council for Disability Awareness, and we thank them for that.

Welcome, Heather. I’m so pleased to have you on the show today.

Heather Cook: Very happy to be here. Thanks so much for having me

CH: Oh, it’s our pleasure. So, Heather, let me set the stage again.  Everyone is welcome to listen, but our real audience today are indeed employees and working adults. One of the things that captured my attention in 2017 was this: The Pew research group simultaneously did two surveys of Americans in general. This survey goes beyond working adults. They essentially asked them what benefits they thought were important for employees to receive, what the most important benefits were, and then asked very specific questions around paid leave.

And what was most interesting to me is that 85 percent of Americans believe working adults are entitled to paid leave for their own serious health condition. A slightly smaller percentage believe people should also receive paid leave for caring for a family member other than a child.

And then the lowest ranked category by the general American public was paid leave for the birth or adoption of a child. Following the Fall 2018 election, The Society for Human Resource Managers predicted that with a large group of women and minorities joining House of Representatives that paid leave is going to become an important topic again.

Heather, can you start where the concept of leave often started, which was in the in the 1990s with the passage of the federal Family Medical Leave Act and, since then, state, city and municipality leaves. Can you explain to people what protection exists for people who work who need to leave the workplace?

HC: Absolutely.
Yes. Thanks so much for the introduction there. So, the Family and Medical
Leave Act (which you’re right started back in 1993) is really a means to offer
employees 12 weeks of job protection within a 12-month period for very specific
qualifying reasons. If an employee needs to be out of work to care for a new
child, to take care of someone in their family with a serious health condition,
or for their own personal medical condition, then they can take FML.

FML applies as long as they work for an employer who is eligible. Basically, that means any company with about 50 employees or more within a certain radius. So, it’s a good benefit that is well-known and common, but it doesn’t apply to everyone. Employees really need to know and understand what the eligibility requirements are to qualify for the Family Medical Leave Act and in what situations it applies.

And it’s important to note as well that while FMLA is widely available, it is an unpaid leave. It protects your job while you’re out of work, but it does not guarantee you that income protection piece that so many of us are in need of and looking for when we have to take time off due to a stressful situation.

CH: Thank you for
that overview, Heather. I think some people forget that your employer has to be
of a certain size before some of these benefits and protections that we’re
going to be talking about apply. I think people are familiar now with some
aspects of leave because of all of the coverage in the media.

Can you comment for any employers that might be listening on the concept of intermittent leave? Can you explain to people a little bit about what that means and how that works?

HC: Absolutely. So intermittent leave is really beneficial to employees who have to be out of work for either treatment of a medical condition or because they are under a medical condition that just doesn’t allow them to perform their job duties, but it’s not on a continuous basis.

So maybe it’s a sporadic condition that flares up every now and again, and the employee needs to be out of work more sporadically either to attend treatment or to just deal with those flare-ups that pop up every once in a while. The Family Medical Leave Act does provide an option for employees to be out of work intermittently in addition to a continuous block of time.

And basically what happens then is they would just need to report the time that they are out of work to their employer or to their insurance carrier to make sure that the time is tracked against their overall bank of time. And, of course, it has to be supported either by a medical provider, or if they are out caring for a family member, have the appropriate documentation that indicates an intermittent time from work is what’s required and necessary for the life event the person is going through.

CH: Thank you for explaining intermittent leave, Heather, because I know people get quite confused about that benefit. It is a good benefit for people going through treatments or having to intermittently take care of a loved one.

So maybe we should walk through next how employees can get the most out of leave benefits and employee benefits such as short- and long-term disability.

Let’s start with short-term disability. Can you help employees understand the difference between FMLA and a short-term disability plan?

HC: Sure. So FMLA, as I mentioned is really the job protection portion of your time out of work. It guarantees that when you’re able to return to work after you have a FML-protected absence that you have a job to come back to. But, remember, it doesn’t provide income replacement.

Short-term disability is going to be that benefit that provides you with a certain percentage of your pay for a defined number of weeks as long as you have restrictions from your own medical condition that prevents you from doing the core duties of your job or your occupation.

FMLA and short-term disability really work hand-in-hand to provide a more holistic benefit to the employee so that they don’t have to worry about their job protection or their income while they’re out of work. But it’s important to note that while there are some states that have mandated disability leave laws in place, most of the time short-term disability benefits are offered through an employer benefit plan.

And it’s very important as you’re going through open enrollment period to pay attention to what options you have from a disability perspective and whether that’s employee- or employer-paid, and really how much you can expect from a percentage of pay and a number of weeks benefit if you have to go out of work due to your own medical condition. 

CH: Heather, I’m really glad you brought that up because I think it’s a wonderful thing when employers provide and pay for our short-term disability benefits. But one of the things I think employees don’t realize until they have to use the benefit is – because the employer paid the premiums – that, when they receive the benefit, it is taxable.

HC: Absolutely,
and for employers who may be listening, this is an important time to talk about
the fact that it’s important for them to consider if they are going to be
generous and pay all the premium. If they are, they should consider providing a
larger percentage of coverage.

CH: Great point,
Heather. Can you talk about how part-time disability or intermittent disability
might work under STD?

HC: Absolutely. So, it depends upon whether your policy covers partial disability benefits. A lot of employers do offer it, which I think is a great benefit because what it does is incentivizes you to get back to work more quickly. I think it’s great when employers meet employees halfway and say: We don’t need you to be fully functional at a 100 percent to come back to work. Or, if it’s a day here or there, you can only work part of the work week, that’s fine. 

With a part-time or intermittent work provision, employers and the disability carrier work with you to make sure you can ease back into work in a way that is beneficial to you and really takes care of your health. Employers don’t want employees rushing back too soon and putting their own health at risk.

So, partial disability really allows for the employee and the employer to work together in a manner that is most beneficial and advantageous really to both sides and allows employees to work more of a partial schedule – whether that be 4 hours a day every day or maybe just a couple days a week until their medical condition allows them to ramp back up to full capacity. During that time employees are reaping the advantage of getting a little bit of income from their actual wages at work and then disability insurance is picking up a good portion of what’s left – sometimes up to 100 percent of your salary.

But even if it’s not 100 percent, at least it’s a little bit extra money to work with while you’re still out on disability.

CH: Great! Thank you for that overview, because, again, I feel like we never talked about some of the really helpful benefits that a lot of people have under short-term disability.

HC: I was just going to stress the importance of employees having a conversation with their managers and their HR benefits team when they’re ready to come back to work, because your employer might be willing to support you in a partial capacity. So, if you’re not sure, it doesn’t hurt to ask.

CH: That’s a really good point, Heather, as often claims examiners who are working on the claim will help with the process of setting up a partial return to work.

Since we’re talking about disability, let’s talk about long-term disability insurance. For people who are listening that are not familiar with long-term disability coverage, it’s worth going over some insurance terms.

There is a predetermined length of coverage for short-term disability that includes something called an elimination period. This is a waiting period for benefits. With short-term disability policies, an elimination period can be five, seven, 15 or 30 days – or another defined period of time. It depends upon how your employer designed the plan with their carrier. Long-term disability coverage usually has a three- or six-month elimination period.

Heather, can you explain for people some of the differences between short- and long-term disability, and how they could prepare potentially for using LTD benefits?

HC: Yes, absolutely, Carol. Once the short-term disability claim is coming to an end in terms of that defined duration, an employee’s case manager will reach out and let them know that they’re approaching the start of a possible long-term disability claim – if they have that benefit available to them. LTD is used a lot of times for absences related to chronic conditions that run a little bit longer than 3 to 6 months. Or maybe there’s a longer recovery time associated with a major surgery, or something of that nature and employees just need a little bit longer period of time to recover.  

Other times employees are on long-term disability for an indefinite period of time and even up until retirement age. So, long-term disability coverage is really serving a lot of different needs for a variety of individuals. One thing to note with long term disability is the percentage of pay that you get may be different than what you received during your short-term disability claim.

It’s important to just be aware of what your specific policy covers and the percentage of pay it replaces, as well as any applicable offsets that might be taken from your benefit.  For instance, if you’re required to apply for Social Security benefits, that may be a deduction from your long-term disability payments. LTD can get a little bit more complicated in terms of understanding the benefit. This is why it’s really important to do your research ahead of time and know what your policy covers and what you can expect in terms of income replacement.

The other thing that is sometimes different in long-term disability is the way that your claim is evaluated. During short-term disability, we’re really looking at whether or not you can perform your job as you did it for your employer before you went out of work. But in long-term disability, a lot of times we’re looking at whether you can do your occupation as it’s understood in the national economy.

Taking that a step further, LTD broadens the definition of disability to see if there’s any other place you could get back to work in a similar occupation. The threshold for meeting long-term disability benefits is sometimes a little bit different and I think that’s important for employees to be aware of.

CH: It’s very important, Heather. It might sound like a negative to some listeners, but I always remember when I was involved in claims one of the examples we would give people to understand was this: A cashier at a traditional supermarket for lack of a better term where you’re not moving or swiping large boxes like you would as a Costco cashier, or any of the other big box container types of stores, is classified the same way as the Costco cashier. But the Costco cashier may have different physical requirements. So, in long-term disability, the way the cashier job is classified for a regular supermarket becomes the definition used for the Costco cashier during LTD. 

Vocational rehab counselors often get involved in cases like the one I just described or in cases where someone can’t go back to their own occupation at all. The counselors assess the out-of-work employee’s skills for what we would call “transferable skills” that they could use potentially at a new job or a new occupation.

HC: Vocational resources can be a huge help to claimants, and they’ll even go as far as helping you with your resume if you’ve been out of work for a while, and really helping to identify what a comparable occupation might look like. Vocational counselors leverage the skills, training and experience that you have to make sure a new job or occupation is the right fit for the person who’s out of work. 

CH:  A lot of people in the United States might not know that there’s a group in the UK which is similar to The Council for Disability Awareness called the Income Protection Task Force. They did a study called the 7 Families Project where they helped seven people who did not have disability benefits and paid them a benefit for a year. They also gave them all the services that come with a long-term disability or individual disability policy, including vocational rehabilitation services. It turned out that the most important benefit was the vocational rehab counseling. Five of the seven people in the program were back to work in less than a year. Personally, the 7 Families Project is such a great example of how important vocational rehabilitation benefits are.

I want to move on to the thing that really is in the news. We have a good chunk of the 10 remaining minutes to talk about “paid leave.”

For people who work for employers, you should know that there are sometimes different levels of protection and generosity under the various kinds of family medical leave. The most generous one is the one that’s always applied to your situation by your employer. 

Sometimes you might live in a city or a state that has a more generous set of leave regulations than the federal law does. The most generous provisions always apply to you and your situation.

So, to review, we have unpaid leave that protects your job when you can’t work. Not everyone has short- and long-term disability benefits, but we know that at least a third of people have long-term disability provided by their employer. And at least 40 percent have short-term disability benefits provided by their employer – meaning that their employer pays either all of the insurance premiums, or pays a portion of them.

From there, we move to paid leave and this idea that if people leave the workplace they actually receive compensation. Heather, can you start to walk us through the basics of paid leave and how that works –  let’s say starting with your own health condition?

HC: Yes, absolutely. Starting with your own health condition and thinking about paid leave – there are a few states across the country that offer a paid leave program and mandate that employers that operate in those states provide it to their employees. States like California, New Jersey, Rhode Island and, most recently, New York all have their own paid family leave benefits. They can be used typically for your own medical condition, to bond with a child, or to care for a family member. Paid leave is becoming more and more prevalent.

Let’s walk through paid leave for your own medical condition for a minute. I think one of the most basic and common forms of paid leave is simply using your sick and vacation time. I think that’s often overlooked because we hear a lot more about these about paid leave programs that are starting to roll out lately and are getting more and more popular. But sick and vacation time are more prevalent – a lot of employees have access to them. I would say more and more employees do have access to some type of paid sick or vacation time that they can draw from and utilize that to supplement their job protection under FMLA or unpaid state leave.

Paid sick or vacation time is definitely an avenue for people to pursue if they need to take time off from work for their own medical condition and they don’t have access to other benefits that we just walked through.

CH: You’ve made a really important point, Heather. Some employers require that their employees take at least some of their paid time off or vacation or sick leave before they access FMLA or while they’re accessing FMLA. Is this still a requirement? 

HC: It can be, Carol. It’s really at the employer’s discretion. We still see a lot of employers who require employees to utilize some of their PTO time before as they go out on FML. But it’s not required across the board. Some employers elect to just allow employees to hang on to that time.

CH: This is a good example of another question employees should ask their employer during open enrollment. 

HC: It’s really important that employees understand how all their leave and disability benefits work together because a lot of these options that we’re talking about today overlap with one another and can create a complicated landscape. And not one that you really want to be trying to navigate for the first time when you have a life event. The more you can think about what you would do if you couldn’t work ahead of time, and plan and ask questions and do your research, the more confident and comfortable people will feel should they have to utilize these benefits in the future.

CH: That’s a great summary, Heather. Can you walk people through an example now about how they would coordinate their benefits if, for example, a woman is going to go out of work on maternity leave?. How does she coordinate FML, short-term disability, paid leave and even vacation or sick time? 

HC: Absolutely. The first step is really to let your employer know that you need to take time off from work. From there, your employer can point you in the right direction to file the appropriate benefits. Some employers manage this process in-house.

It may simply involve going to your HR department and filing a formal leave of absence. You can do this ahead of time and don’t have to wait until you’re in the delivery room to move forward with a claim request. Doing this well in advance can provide you peace of mind.

If your employers use a disability or leave carrier to manage pregnancy claims, typically all you have to do is make one call to get that process going. Then the case manager who’s assigned to help you through that process will reach out and have a conversation. They’ll let you know if you meet the eligibility requirements for the benefit. They’ll explain how different benefits such as disability and paid parental leave may overlap with one another. They’ll also tell you what documentation you might need to supply in order to get those benefits approved. 

The key questions you would want to ask in preparing for something like having a child is what percentage of my pay would I receive if I’m out on these benefits? How long can I use my bank of time, and how do I know if I’m eligible? And then, finally, what paperwork do I need to submit?

CH: Thank you, Heather. So, as we close down our conversation, what can we walk people just briefly through about taking a leave for the care of a child, or for the care of another loved one (where that is covered)?

HC: So more and more we’re seeing family members take time off not for themselves, but to care for a new child or for a family member. A lot of these leaves are now being covered not just by FMLA and state leaves (which we know are unpaid). A lot now is covered under some type of paid family leave program.

It’s important to also ask the question of whether or not your employer has benefits that cover you to take that time off. The process is actually very similar to filing a claim for your own medical or health condition. The first step is really making sure that your employer is aware of your need for time off, determining whether you meet the eligibility, and having the benefits available to you. Then you submit whatever paperwork is required, which is typically a birth certification or a medical certification form to document that the family member is in need of care, or that you recently had a child to bond with.

It’s not a whole lot of burden of proof on you. It’s more about completing a couple of forms and confirming the dates that you’ll be out of work with your employer. The process really can go pretty smoothly from there.

CH: We’ve talked a lot about how you can prepare ahead of time for filing a claim. But what happens to someone who perhaps has an accident or something they haven’t planned? And let’s say it’s not a minor accident – it’s a bigger accident. And they wind up hospitalized for a short period of time. How do they go about filing a claim? Can someone who is a relative or a friend start a claim process for them? 

HC: Sure, life happens certainly, and there are going to be situations that come up that we don’t expect. So employers and insurance companies really try to make it as easy as possible for that person to get the help they need when they need it. Anybody can file a claim on your behalf. A lot of times even your employer can do it for you.

It’s really just making sure you have the phone number to call. Other people can call in that claim or leave request on your behalf and get the process moving. Then your claim case manager (whether they be at your employer or with the insurance company) will do all of the heavy lifting after that. They will make the phone calls to the hospital, confirm your admission, and get any medical records that might be necessary.

It is possible if you’re incapacitated, or not able to advocate for yourself, that your claim can continue to move on and you get the benefits you need by other people helping you and being advocates on your behalf.

CH: Thank you so much, Heather, for your time and the great information you’ve provided on family medical leave, short- and long-term disability insurance, and paid leave. I know our listeners have learned a great deal. 

HC: Thanks very much for having me. I appreciate the opportunity to be a guest on this show.

CH: As a reminder for our listeners, you can access more information on the topics we discussed today at either or

Disability Insurance: A Key Part Of Paid Leave and Absence Management Plan

Absences can be hard on both an employee and employer, which is why disability insurance can be a potent addition to your benefit plan. However, there is a way to make absences easier to manage. The following tips are based on an article written for the Council for Disability Awareness blog byMarjory Robertson, assistant vice president and senior counsel, and Abigail O’Connell, senior counsel, both of Sun Life Financial.

1. Make it easy for your employees during a time of stress.

When an employee needs to take a leave— whether it’s for a joyous occasion such as welcoming a new child, or one that’s more stressful, like caring for a family member — they are likely already overwhelmed. “A consolidated absence approach removes the need to contact separate entities for different benefits and entitlements,” say Robertson and O’Connell.

2.Make sure your company is compliant.

It’s nearly impossible to keep up with fluctuating federal, state, and local legal requirements regarding leaves of absence and workplace accommodations, but the consequences of noncompliance can be very serious. 

3. Consider a third-party to ease the burden.

Selecting one vendor to administer paid and unpaid leave, absence, and disability benefits streamlines the function for both employers and employees because they can contact one entity for information about rights and obligations regarding multiple benefits and entitlements.

4. Help protect employee privacy.

An outside administrator limits risk of exposure to employee personal health information, assuring employees they won’t have to divulge sensitive medical information to their manager or HR department, Robertson and O’Connell explain.

5. Support your employees — but not at the expense of productivity.

Using a vendor allows employers and managers to receive consolidated reports that show the status, dates, and timelines for an employee’s absence, which makes it easier to plan workforce needs. 

To learn more, read the full article here: “How disability insurance can be part of your paid leave and absence management strategy.”

Making Your Best Benefits Choices During Open Enrollment

Making your best benefits choices during open enrollment

In a recent podcast discussion [click here to listen to the live recording], Carol Harnett, President of The Council for Disability Awareness and Phil Bruen, VP, Group Life and Disability Products at MetLife, talked openly, honestly and directly about the best way for employees to make choices during the annual enrollment period for employee benefits.

Why is open enrollment
important? Because, for many employees, employee benefits are equal to approximately
30 percent or more of their base salaries. Given that employee benefits add to
a worker’s compensation, we want to make certain that employees make the best
choices they can, and that employers offer benefits that are valuable to their

As you read the transcript below or listen to the recording, you will understand key issues for how to design and position the annual enrollment process.

Carol Harnett:                    
Good morning. This is Carol Harnett. I am the President of the Council for Disability Awareness. Welcome to our show, which is called the The Financial Health and Income Network. Our discussion today is going to be around open enrollment, and how consumers and employees can make the best choices possible during this process, which so many people find intimidating. I’m pleased to have a long time friend and colleague as my guest today.

Phil Bruen is the Vice President of Group Life and Disability Products at MetLife. MetLife is a founding member company of the Council for Disability Awareness.

The Council for Disability Awareness is a non-profit organization, primarily educating employees, consumers and employers about issues around employee benefits with a particular focus on what we would call income protection products. This Is a name that’s probably meaningless to consumers. What income protection actually means is insurance that helps people protect their income stream, whether it’s through disability insurance or critical illness insurance, accident insurance, and an assorted group of products.

So, welcome Phil, and thanks so much for being on the show today.

Phil Bruen:                            
Thanks, Carol. Glad to be here.

Carol Harnett:                    
So with no further ado, let’s get started. Both of us have been around a long time. We’ve been working a long time. We’ve been through open enrollment, or what some people will call annual enrollment, both personally and professionally for decades. And I’m curious, because I feel like in my career the process has actually changed a lot. How have you seen it evolve over time?

Phil Bruen:                            
Thanks Carol. It has evolved over time. The way we think about it we actually use the term annual enrollment. So it’s a way for everyone at least one time a year to take a look at how the enrollment process works for benefits for employers. Once a year there’s an update or an annual refresher, if you would, of the benefit package. And so thinking of it in the context of a one time a year annual enrollment is one way that I think it’s changed.

So that opportunity for employees to step back and take a look at what’s changed: How their goals and objectives may have evolved or do evolve over time, and what does that mean in terms of the benefits they have available to help them meet those goals? And really with a mindset of really refreshing this. Almost like a tune up every year, once a year. It’s certainly important all year long, but at least on an annual basis to take a look at it.

I think the other change here is that — and II can speak to this personally — I think I only cared about looking at the health care plan. What’s happening to my medical benefits? What’s happening as it relates to my deductible and my co-pays, or the network that my providers are in? So a lot of focus I think historically on the medical plan. And then how that’s evolved. I think almost all the focus was on the medical plan. I think what’s changing now is (and I’m going to speak to it again) is that one aspect of all of our goals and needs is around our health, but there’s more beyond the medical plan. And so I think that’s what’s also changed: stepping back to take a look at overall benefits and how those help an individual achieve their long-term goals and objectives.

Carol Harnett:                    
Thank you. I think that’s a really good point. I mean, we could certainly talk about things like how the technology has changed in the years since we started doing benefits. I remember when I first started working, I didn’t have to choose my benefits. They were just given to me by my employer, and believe it or not, paid for by my employer. And then we evolved into this point where we have to make a lot of choice, and I know in my career, I largely have worked for employers. But I’ve had a good span of time, probably about seven years where I was in my own business and fully providing my own benefits. And I think, for me, that was one of the most helpful experiences as to how you think about what you actually need.

And to your point, I certainly started with medical. I worked in healthcare in the beginning of my career, and I worked at some outstanding facilities; including the Kessler Institute for Rehab, which is still the number two rehab hospital in the country. So I knew what outstanding care was, and for me, I always wanted to make sure I had access to that very best care. My parents really raised us with great respect for trying to find the best medical care. So I certainly started there, but skinnying down, for lack of a better term, of my benefits because now I was providing them was an interesting process to go through. And I found I focused on my health first. And then I thought about how whatever selections I made would impact the people who love me and care about me and were going to be taking care of me if something bad ever happened. And I think the next thing I actually thought about was my income.

I was very fortunate that I had disability insurance already. I did expand my disability insurance coverage. And the other thing I did, which is not necessarily something we’re going to talk about today, but it’s also in many ways income related, is I bought a long-term care policy. So I said, “Well, if I get sick, I want to still make sure I have yet another way to get some income and help with medical.” And then frankly, the last thing I did is I’ve always had retirement through employers, but I developed a process to continue to plan for retirement as a single business owner.

So I think those things are important, too. Because I think in benefits, and I don’t know what your experience has been, but as benefits have evolved, we’ve given people more and more and more options, and I think sometimes that can be really confusing.

Phil Bruen:                            
Absolutely, you’re right. It’s kind of interesting. Early on, as you said, the enrollment process lived in a world of paper. And it may have been cumbersome, but I think one of the benefits of paper is that individuals had something in front of them. They usually had to fill it out, step back and think about the benefit choices they had. Then we moved on to more of a technology platform. I’ve seen more of what we would think of as more of a passive process, where individuals would have to go to a portal or a website. And that can create confusion if there’s so many choices — which can be a good thing — to give employees choices in the benefits they can elect. But what’s really important is: What choices are important to me individually and how do those choices change over time?

So I think you’re spot on, Carol. What we’ve found is that putting it [benefits] in a personal context is what we think is really where the future is in terms of an annual enrollment exercise for individuals. So stepping back and taking a moment to think about — on an annual basis: What are my dreams and how have they changed? And how do I protect those dreams in the event of something that might happen? So this concept around income protection, I think, becomes a byproduct of stepping back to think about what an individual’s aspirations and dreams are.

A lot of individuals spend time talking about the future and what their dreams are, but they rarely put it in the context of a benefit that can help them fulfill those dreams. And so we’re spending more time thinking about how to help individuals in that conversation. One of the ways we suggest doing that is anyone who’s looking at their benefits this year to talk to their friends and coworkers. To have some meaningful conversations about their dreams and really how others think about that in some benefits, to help them take action. Because there’s no question there’s information overload.

So we do know that individuals talk to their colleagues when they’re trying to decide benefits to choose. We’re also helping those individuals and educating them around think about what “people like me” need. Guidance around what type of benefit choices help with objectives they have around their future in terms of retirement, their income protection needs, certainly asset protection as well, and their health. Health is always very important. But putting them all in context. And then also how the benefit package can help support those objectives over time.

Carol Harnett:                    
I really love that concept of what your dreams are. That’s a really interesting way to do it. And also some of the things you’ve been eluding to or referring to when you talk about benefits is something we hear more now: this idea of life stages. Change happens in your life. When you’re young, you might be moving in with someone, or in a committed relationship, or getting married and buying a home. Maybe you’re having kids (or maybe not having kids) which is a choice more people are actively making. And then your kids leave, and you’re in yet another life stage.

And then there’s a new trend, particularly in what we’re calling the millennial generation, where they’re trying to develop a plan to retire earlier and do something different. So I think those are two great tips. One is to identify dreams and talk about them with others, and then to relate those dreams to your benefits. Is there something I can do — through the benefit choices I make — to allow that to happen? And, not to denigrate any benefits, but if one of your dreams is to retire earlier in your career than maybe your parents did, or some of your friends are going to do, is to make sure you’re choosing benefits that help with that plan. So I think that’s a great tip.

Another thing I wanted to talk with you about, because I think we’ve had a lot of personal experience in navigating open enrollment (and also in helping employers figure out how to set up open enrollment) at least related to some benefits is: In your personal experience, do you have one or two tips you’ve learned as an employee for how to make the most of open enrollment? Or, tips for what some people would say: How to successfully get through open enrollment?

Phil Bruen:                            
Yes, there are a couple of tips. I think the first one is to step back and pause, and to look at what’s available, not just what’s changed. So I think we all read in annual enrollment what’s changed, what’s new? That’s helpful, right? But also to go a little deeper to see, okay, what are my benefits that are available to me, and how do those line back up to my dreams? I think quite often (I do this personally) we start with what’s happened with medical. There’s a new benefit being provided, or an enhancement to the dental plan, or some change to the disability plan. But I don’t actually step back and say, “Well what do I already have for coverage, and what might I want to do to change or adjust those?”

So spending a little bit more time, just a couple more steps to do that, and then to think through that. Maybe pause, talk to a loved one and spouse about those options, and then to come back to finalize enrollment. That’s probably the second tip, would be to definitely complete the enrollment. To make that an active exercise, individually. And maybe also think about and take a look at the overall plan that an individual has, and then come back and take some action in a more meaningful way. It sometimes can be hard to do that all in five minutes online, if you would, during the middle of a work day. Or take it offline after work and think through those benefit choices.

Carol Harnett:                    
I think that’s a really good tip, because I know in my time of doing online enrollment at various employers, the pattern that seemed to repeat itself year over year over year is the far majority of employees waited until the last week of the open enrollment period.

Phil Bruen:                            

Carol Harnett:                    
And some of them have waited until the last day. And I can remember several times at one employer we’d get a note, because then the system would pretty much get locked up or crash, and we’d get this note saying: “We’re going to extend it [open enrollment] by two more days. Can some people please come off [the online enrollment system]?” And that sense of it being a chore instead of this opportunity.

I think people lose sight that [benefits enrollment] is really valuable. Employers spend about 30 to 35 percent of what your base salary is on your benefits. And so, it’s about a third more of your salary, and we just kind of cram it in, to your point, to like five or 15 minutes. Just checking the box.

Phil Bruen:                            
Absolutely. Yes, I’m guilty as charged, as well.

Carol Harnett:                    
Me, too!

Phil Bruen:                            
We just wait until the last minute. And then, quite often, if there’s no action, individuals default into a set of benefits that may likely not be appropriate for their circumstances. So, spend a little time as soon as those communications come out, and print the material off or read it online and step back and think about that. That would be my suggestion.

Carol Harnett:                    
I like the idea of taking a pause and talking with the people who are impacted by your choices, such as your spouse. Or, if you’re a single person, talk ingwith your family members who might wind up in a situation of having to help you if you ever did have something odd happen to you from a health perspective that would impact your ability to work, or a need you might have to travel someplace to get care. Those are really important things.

You and I have both spent a good part of our career working in the area of disability and disability insurance. I did it from the healthcare perspective, the insurance perspective, and the consultant perspective. And I know you’ve done it on multiple levels. The Council for Disability Awareness did a consumer survey a couple years ago, and there was really only one thing that jumped out at me, and I loved the question. And the question was, “Other than your family and your friends, what are the three things that are most important to you?” And this is a group of people who are consumers of working age.

And, by far, there were three choices people made that stood out, and all the other ones dropped off. People said their health, their income, and their home (where they live) were the three things that were most important to them. And the secondary or follow up question to that was: “Of these three things, do you have insurance to protect those things?” More than 90 percent of people had health insurance. Part of that high percentage was related to the impact of the Affordable Care Act.

And then when we looked at people who either owned or rented homes. Again, the far majority of them had either homeowner’s insurance or renter’s insurance. Because if you have a mortgage you’re required to have homeowners insurance, and then hopefully if you don’t have a mortgage, you would still have that coverage because it’s important. The same with renter’s insurance. More and more landlords require evidence of renter’s insurance.

The disturbing thing for me was the income question. The number two topic that was most important to people other than their family and their friends was their income. And less than 30 percent of this particular group of people had any form of income insurance or disability insurance. I know you’ve worked in this space even longer than I have, how would you tell people to think about their income and what protecting their income means from an employee benefits perspective?

Phil Bruen:                            
It’s a great question, and I’ll bring it back to the enrollment conversation. I would suggest that folks might think of disability protection as a card that serves as your proof of insurance card — similar to the auto insurance card you have in your car. If something happens you always can pull out that proof of insurance. If we can create a mindset around disability that we need that proof of insurance; that it’s a baseline need that we all have to protect our incomes, because it truly protects everything else.

I think what can get in the way sometimes is an individual can think, “Well, that’s never going to happen to me.” When in fact we all know individuals who may be out of work for a period of time. The good news is most people actually do return to work, but they need that safety net. As we all know individuals live paycheck to paycheck. So what would happen if that paycheck wasn’t coming in? So I think understanding this proof of insurance concept is helpful.

But to get started is to again go back to that benefit package and see what the employer is providing. There can be paid time off and paid leave. There can be some benefits that the employer would provide to supplement income if an employee can’t work. But more often than not, there will be a need to supplement or augment those benefits. And more often than not, the benefit package will have choices that individuals can take to help provide income protection. And I’d suggest that comes in a few different ways. There’s a baseline of income protection to help cover for day-to-day living expenses, and that’s typically short-term disability and long-term disability insurance. That’s a baseline core benefit to look for. If it’s something your employer is providing, that’s great. If it’s not, look to see if there’s an option to purchase some basic levels of short-term and long-term disability protection through the workplace or from an individual broker.

The second aspect I think of around income protection would be to also provide levels of protection for what might be a more severe event, even if it’s a temporary event, that can help augment that income protection plan. For critical illness or certain accident scenarios that might happen, where that individual is going to have additional expenses above what they normally would have on a day-to-day basis. It could be transportation. It could be day care. It could be to cover costs that aren’t covered under the medical plan. And I’d suggest that’s another layer of income protection. So think of it like that short-term or long-term disability solution. And then also look to see if there are some benefit options for accident protection or critical illness coverage would be a couple of examples to supplement short- and long-term disability insurance.

You know, I’d also point out, it’s a little complicated. There can be state-mandated leaves as well, so having an understanding if an individual lives in a state where that’s available. These leaves can be for both employee income protection and also income protection in the event for family bonding time off. So it’s helpful to understand if you live in one of those states; if there’s a baseline or mandated level of protection that the individual person would have. I’d also suggest, even in that circumstance, and I know I’m getting a little complicated here, I apologize.

There can be a need to actually supplement what the state-mandated plan would be. so, for individuals in those states, it’s helpful to take a look and understand what’s being provided. If a person lives in California, New York, New Jersey, Rhode Island, Hawaii and certainly in the future: Washington state, Washington DC, as well as Massachusetts. I probably missed one in there, but those are all states that have some form of a state-mandated plan. It gets a little complicated, but again, I think that’s what’s most important is think of it as proof of insurance. That everyone should have disability insurance. There’s a basic level of protection that’s critical for folks when they’re into a period of time of disability; to help essentially meet those daily living needs and to protect everything else that they work for.

Carol Harnett:                    
Phil, thank you so much. I really appreciate that overview. And as you were talking I was being reflective again of my own choices. Not that they have to be other people’s choices, but when I was still in graduate school full time, I was on a research assistantship. So I had a small salary. They paid my medical benefits, my health insurance premiums, which they needed to, because we didn’t make a lot of money. So I actually was a low wage earner. When I was in school, I had an opportunity through my professional association to get disability insurance. And my dad said to me (and I’m 23 years old), “Your scholarship is both a job and a free education, but it also has benefits. And if you get sick, you could risk losing those things.” So I took this opportunity to sign up for an association disability policy. At that time the only option was a one year, short-term policy, but it would cover my expenses.

And then I went to my first job. I happened to work in New Jersey, which has state-mandated disability insurance, but the employer offered us an opportunity to buy what we would now call worksite insurance. So I had a worksite policy that supplemented both what I already had and the state-mandated coverage. Then I switched employers and wound up with a long-term disability policy that was paid for by the employer. And then as my career was growing I added individual disability coverage. So at one point in my life, I actually had four forms of disability insurance, and five if you count the years I worked in New Jersey and in California. But I felt that need to supplement, because I could not have paid my bills if I couldn’t work. In one case I couldn’t have paid my rent if I just relied on one of those forms of coverage. So I think that’s a great analogy.

I’m looking at the clock, and I think it’s a good time for us to summarize. Phil, first of all, I want to thank you. In another part of my life I’m a writer and a journalist, and I took some key notes on what you said. And this is what I’d love to leave people with as they think about going through the annual benefits enrollment process and actively participating, instead of just ultimately winding up with what the system will default for you.

My favorite quote, Phil, is yours of thinking about what are my dreams, how have they changed, and how could your employee benefit selection help you with your dreams? What a great way to think about annual enrollment. Secondly, to talk to your friends, your colleagues and your coworkers about what their dreams are and about how they might be thinking about making benefits choices that would help them with that. And then, as you look at your benefits, to not necessarily look at just what’s changed, but to look at what’s available, and again, how is that going to help you relative to where you are in your life and in your family’s lives? And to try to think about benefits a little bit earlier than the last day or two of open or annual enrollment. And to pause and talk with your spouse or you significant other,or your loved ones about the choices you’re thinking about making.

And then certainly, I think, for both of us, and certainly The Council for Disability Awareness and MetLife as a major player in the disability insurance and income protection markets is: How do you think about insuring the thing that consumers do tell us is the second most important thing to them, which is their income? I love thinking about that idea of proof of income, and to think about short and long-term disability as a baseline, and critical illness and accident as another layer or protection for those severe events that we don’t always think are going to happen to us. And then to finally be curious about your income protection related to the state where you live. What is potentially available around what’s being called paid leave, or parental leave, or caregiving leave, or state-mandated benefits, and understanding those.

So again, Phil, thank you so much for being our guest. You provided so much information and a great conversation, and we hope that you’ll return to our show another time.

Phil Bruen:                            
Thanks, Carol. Glad to be joining you. Look forward to the next conversation.

Carol Harnett:                    
Thank you. And for our listeners, if you have any other questions feel free to go to our consumer site: Thank you everyone.

6 Keys To Attracting and Retaining Top Employees In 2019

Benefits play a big role in how employees — and potential employees — perceive a company.

The following tips are based on articles written for the Council for Disability Awareness blog by benefits experts Phil Bruen, VP, Group Life and Disability Products at MetLife and Diane Russell, SVP Marketing, Lincoln Financial.

1. Know that most people are under financial pressure.

Employers who are competing for the best talent find that providing benefits to support the financial well-being of their workforce is necessary, said Bruen.

2. Stress associated with healthcare costs is real.

Financial stress is increasing, and health care is a significant contributor to that stress, said Russell. In fact, 46 percent fear unforeseen health expenses more than any other concern.

3. The whole package can make a difference.

According to Russell, 53 percent of employees agree the benefits their employers offer influences their decision to join a company, while 71 percent agree the benefits package offered makes them want to stay at their current job.

4. And you should be thinking beyond medical.

When you think outside of the traditional health insurance box, some of the most important benefits fall into three categories, said Bruen: disability and income replacement, supplemental health benefits, and retirement and financial wellness.

5. In fact, benefits are interconnected.

These three key benefit areas — health insurance, retirement, and disability — are interconnected, said Russell. They serve as the legs of a three-legged stool when it comes to financial wellness. If one leg is taken away, or is inadequate, the whole stool may collapse.

6. Know the action steps to take.

Employers need to reach out to their employees — and truly listen to and incorporate their responses when choosing the tactics and tools that will become part of their financial wellness offerings, said Russell.To learn more, read the full articles here:

Beyond medical: How supplemental benefits help attract and retain talent by Phil Bruen, VP, Group Life and Disability Products at MetLife

Looking for top employees? These three benefits are a must by Diane Russell, SVP Marketing at Lincoln Financial

Do You Know the Financial Implications Of Taking A Career Break? Five Questions to Ask Yourself

When it’s time to start a family, many parents-to-be are so focused on decorating the nursery and choosing the right car seat that they can overlook the life-altering impact a baby can have on their financial life. And we’re not just talking the exorbitant cost of diapers—we’re talking nearly 4 million dollars in “potential income.”

These startling figures come from an interactive calculator from the Center for American Progress that helps you see the impact of a career break based on your own situation. Suppose you’re a 28-year-old woman making $50,000 annually who has a five-year lapse. First, of course, you’ll lose $250,000 in wages, but that’s just the beginning.  In addition, you’ll lose an estimated $252,383 in wage growth and $219,671 in retirement assets and benefits, bringing you to a loss of $722,054. However, that figure hides an even more frightening loss in projected “potential income,” which comes from the fact that you’ll probably take a pay cut when you do return to the workforce, more than 7 percent, according to a survey from Payscale.

course, there are considerations other than financial ones to consider when determining
if you should take a career break…and it’s a personal choice that each family
must make individually. But, here are some questions to ask yourself before
making a decision.

1. Can you afford it?

This seems basic, but it’s important since it can be tough to transition from two incomes to one. It’s best to take a trial run while you and your partner are both still working to see if you can and will forgo the extras that a second income provides. And of course during your experiment, you can bank that money to build up an emergency fund or bolster your retirement.

2. Do you
have access to adequate childcare?

is often the top reason that a woman will decide to take a career break—either
they can’t find adequate care, or they can’t afford it, given the bite that
childcare takes out of a budget. Obviously, it feels unpleasant to think that
the majority of your take-home pay is going directly to childcare, but that’s
exactly when you need to analyze the “lifetime costs” of that five-year break,
as illustrated above, to see how the actual cost of daycare might be a drop in
the bucket over the long haul.

3. Can you and your family still
retain benefits?

families have a working spouse with coverage, but it can be an incredibly
expensive proposition if you are going to have to obtain your own benefits on
the open market. While the Affordable Care Act website can help you locate coverage,
remember that these premiums are for healthcare coverage only, and don’t include
supplemental benefits that a company often provides, such as long-term disability insurance and retirement savings.

4. Do you have skills that will
remain marketable?

Some industries, such as tech, change at an accelerating speed, meaning which
your skills could be obsolete quickly if you take a break. And other positions,
such as those in sales, might be easy to slip back into from a functional
standpoint, but you may lose the contacts you need to make your job successful.
Whatever your situation, you should put together a plan for how you can keep
your skills sharp through online learning or other educational opportunities,
as well as how you will maintain your network, so that it hasn’t atrophied if
and when you decide to return to the workforce.

5. Will you feel fulfilled without
your job?

Of course, society says that being a parent is the most important job—and it
truly is. However, many women find that staying home with a child isn’t all
they expected, and they can become lonely. If you do decide to take a break,
make sure that you have created a support system of other at-home parents to
allow you to have a social life, along with the support of a partner who
recognizes that taking care of a child is a job in itself. 

Raising a
child is about a lot more than dollars and cents, but if you are considering
taking a career break, it’s important to go into it armed with the necessary
information to make a decision that’s right for your family.