Should You Offer Group Disability Insurance to Your Employees?

The answer is always "YES"!

If you have 10 or more employees, a group disability benefit may be a valuable addition to your employee benefits package.  Group disability plans typically provide a totally disabled covered employee with a benefit of up to 60% of their pre-disability income, to a specified maximum, such as $10,000 a month. It can help to cover personal expenses as well as provide business overhead protection.  For Key Employees, or higher earners, this coverage can be increased to 100% of pre-disability earnings!

Beneifits can be offered to employees on a voluntary basis- meaning no cost to the employer!

Advantages of a group plan include:

• Plan design flexibility. In many cases, employers can elect a plan design that fits their budget and works for their employees. For example, an employer may choose a guaranteed issue plan, which gives employees the option to purchase coverage regardless of their current health condition.
• Lower premiums. Group rates tend to be lower than individual rates.
• Potentially portable. Depending on the plan design, covered employees may be able to take their coverage with them if they leave the company.
• Premium payment flexibility. Premiums can be paid by the employer, the employee, or a combination of the two, using pre-tax or after-tax dollars.
• Tax deductible premiums. You can take pre-tax company-paid premiums as a business tax deduction.
• Recruitment and retention tool. Having group disability insurance in your benefits program helps attract and retain quality employees.
• Short Term Disability & Long Term Disability can be packages together or separately.
• Positive impact on your Workers Compensation

Drawbacks to group disability plans include:

• Employer paid coverage can be expensive
• Benefit amounts are capped, which may make it difficult for you and your higher-paid employees to replace a large enough percentage of income.
• Disability is reduced by other forms of income