Understanding the Importance of Closing the Disability Coverage Gap

Anthony Favry, Vice President, Disability & Absence Product, MetLife

Editor’s Note: Disability insurance is the fastest-growing product in terms of employee interest this year.¹ This could be due to the fact that there is an underlying demand for more financial security and flexibility with time away from work when needed. This is particularly acute among certain cohorts, such as Gen X, Women, and Black employees. In fact, interest in disability insurance is highest among Gen X, while Black employees are the most likely to say disability insurance is a “must have.”

The workforce experienced a turbulent period in recent years, causing many employees to shift their priorities when it comes to what they want from their employee experience. In turn, employee benefit satisfaction fell to its lowest point in 10 years. In fact, this year, satisfaction with benefits dropped to 61% (slipping from 64% in 2022) according to MetLife’s 21^st annual Employee Benefit Trends Study.¹

Despite these insights, 83% of employers still believe their employees appreciate the benefits they receive – demonstrating how employer efforts to expand benefits offerings have simply not kept up with rising employee expectations.¹As employees’ expectations of employer benefits rise overall, the employee need for specific products, such as disability insurance, also increased. However, while employee interest in purchased disability insurance increased, the total number of these policies remained consistent, meaning a large interest-ownership gap is emerging.

This suggests there is an opportunity for employers to help close the disability coverage gap by either (1) offering disability insurance if they don’t already, or by (2) encouraging education and enrollment through improved communications. For employers mapping their benefit strategies for their unique industry, workforce, and talent needs, here are a few important considerations to keep in mind when it comes to disability insurance.

Flexible Benefits to Demonstrate Care

Employers can effectively improve the employee experience through the demonstration of care across foundational elements, including culture, purposeful work, flexibility, career growth, compensation, and benefits. In particular, flexible benefits and program design can help employers connect with a workforce that continues to diversify generationally, racially, and in terms of family situations and living arrangements.

Today, 60% of employees say disability insurance is a “must have” benefit – an increase from 51% in 2022. This makes disability insurance the fastest-growing product in terms of employee interest this year.¹ This could be due to the fact that there is an underlying demand for more financial security and flexibility with time away from work when needed. This is particularly acute among certain cohorts, such as Gen X, Women, and Black employees. In fact, interest in disability insurance is highest among Gen X, while Black employees are the most likely to say disability insurance is a “must have.” What’s more, despite roughly even gender ownership, interest in disability insurance is higher among women than men.¹ With these considerations in mind, employers who can acknowledge and support their employee cohorts’ unique situations will be well-equipped to demonstrate employer care and provide value through their benefit offerings.

Paid Leave to Support Caregivers

There are approximately 30 million Americans who are employed and also caring for a loved one.² Between fulfilling job duties and caring for their friends or family, caregivers take on many responsibilities that can impact their physical and mental health. With this in mind, it’s not surprising that caregivers are much more interested in disability insurance than non-caregivers. As caregivers are the quickest-growing employee cohort, employers should consider how they are supporting this growing group.³Alongside interest in disability insurance, paid leave – which you can use to care for yourself or a family member – also received a large boost in interest this year with 77% of employees saying it is a “must have.” Evidently, caregivers are becoming increasingly interested in benefits that enable time away from work when needed.

Final Thoughts

Against the backdrop of low job satisfaction, loyalty, and holistic health during this recent period of uncertainty, it’s easy to understand why employee benefits satisfaction is low. As employee priorities continue to evolve, employers should consider their disability coverage options and how they are communicating their offerings to their employees in a deliberate and purposeful way. Benefit communications should occur frequently and through diverse channels (e.g., townhalls, internal chat resources, video recordings, clear benefits summaries, and simple explanations on enrollment forms), which can help employees take the right action around enrollment and understand the value of benefits more broadly. As outlined above, many employee cohorts are more actively interested in disability insurance than in years prior.

For employers, disability insurance can make an impact on talent outcomes, as employees who own disability insurance through their employer are significantly less likely to be planning to leave their employer and have higher job satisfaction.¹ Additionally, effective benefit communication and engagement efforts can boost returns on employer benefit investment. Providing disability insurance is a win-win for both employees and employers and can help close the coverage gap that many individuals are facing today.