Offering solid disability benefits can help small businesses improve recruiting and retention.
The case managers at a well-run disability insurer can even help improve a small business's productivity by suggesting support programs and workplace accommodations that can expedite disability claimants' return to work.
But producers who advise small businesses have a challenging role: designing disability insurance solutions that meet the needs of clients and clients' employees, are easy to implement and administer, and fit within the clients' budgets.
How can a producer help employers provide valuable income insurance protection while containing costs? One place to start is by considering certain key features of a disability contract.
Advances in medical technology and treatments have improved the health care system's ability to rehabilitate disabled employees and return those employees to work. A disability plan that is constructed based on this premise can help make disability plans more affordable for the small employer.
For example, suppose a policy uses a "24-month own-occupation" definition of disability that includes an earnings test and the Social Security normal retirement age, with the assumption that benefits will be cut off if the claimant is able to enter any occupation after 24 months. That definition takes into account the possibility that medical breakthroughs will help many disabled employees get back to work faster. Disabled employees who are totally disabled after two years are likely to qualify for Social Security Disability Insurance. Use of this benefit period may reduce plan premiums.
Like many other types of benefit offerings, one size does not fit all when it comes to disability benefit programs. Employers have different needs and face unique challenges. Some organizations may be local, regional or national. They have different work force population sizes and different demographic mixes of employees. Different features in a plan may be more important to employers in certain industries.
A disability contract should provide the flexible plan design options to accommodate clients' desires and price points.
One example is the option to combine limited disability benefit durations. That feature offers clients value by allowing for more stable pricing. A policy could, for example, provide a combined total lifetime limitation of 24 months for mental or nervous conditions, neuromusculoskeletal and soft tissue conditions, chronic fatigue, and conditions related to use of drugs and alcohol.
An important consideration for small employers is return-to-work/stay-at-work strategies.
