Most employees may not be aware of disability insurance. But the issue has come into focus as companies are increasingly cutting back on this insurance for their workers. It protects employees against loss of income as a result of disability, permanent or temporary.
Under this coverage, employees who suffer injuries at work or become severely ill are provided an income. Disability insurance makes the employer-offered benefits package more competitive. A disability insurance policy explains the policy tenure, terms of the illness/disability, coverage limit and certain exclusions.
To be offered a short term or long term disability insurance policy, you
Must work at least thirty hours a week in your job
Must have worked for a specified minimum time period (as required by your company) before the coverage is offered
Short term disability coverage is a requirement for businesses operating in New York, Rhode Island, Hawaii and New Jersey.
In the current economic climate, companies have become more tight-fisted with their disability policies, with quite a few paying under 50% of what they did a couple of years back. Workers are also paying larger premiums with less than 50% of employers taking care of all the medical bills currently, in comparison to the 81% in 2001.
Such reductions are also being observed in employee-offered health plans. But the timing cannot be worse, with the dire need for employee disability coverage taking into perspective the country’s ageing workforce. Insurance claims also have a tendency to surge with a slump in the economy. In 2009, disability insurance claims jumped close to 17% to a staggering 3 million.
Workers are being scrutinized carefully by insurers regarding the nature of disability, medical updates, with some reporting long telephonic conversations with insurers and a more intrusive, annoying approach. Employees are questioned about their exercise regime and noticed change in symptoms, a stark change from the non-intrusive monitoring that was the norm earlier. And in some cases, employees have been cut off from their coverage.
On the flip side, insurers have also been helping severely disabled employees fight red tape and apply for SSDI (Social Security Disability Insurance). Applying for SSDI is a lengthy, complex process and assistance from insurers is welcome. But insurance companies are also benefiting as the government is picking up some of the tab. If your coverage has been cancelled suddenly, make sure you appeal against this action as most employees have regained their coverage after week-long appeals.