What Disability Benefits to Offer (and How to Decide What Your Company Needs)

Providing disability benefits has become more common for companies, as long-term benefits are a great way to attract and retain talented employees. Offering these benefits signals that a company cares for and values its staff.

This is important, because according to the United States Social Security Administration, one in four 20-year-olds will become disabled before retirement. Since disability insurance is not offered by all companies, it’s valued simply because it’s expensive to obtain outside the workplace. Moreover, social security disability payouts can be disappointingly low, according to Forbes.

It makes sense that employers have collaborated with insurers to add value to their companies via disability benefits. First, this collaboration helps affected employees replace some lost wages due to periods of absence. Second, this initiative assists you, as an employer, in managing lost time and smoothly transitioning your highly valued team members into the workforce after a period of health-related absence.

Short Term vs. Long Term Disability Benefits

According to the National Federation of Independent Business, there are two types of disability benefits employees can claim: short- and long-term.

  1. Short Term Disability (STD): STD benefits feature a seven-day waiting or elimination period that covers up to 60 percent of an employees’ salary for a period of 13 to 26 weeks. The ceiling imposed on STD is typically $1,000 a week.
  2. Long Term Benefits (LTD): LTD benefits usually have 90-or 180-day elimination periods, covering 60 percent of an employees’ salary, lasting between two years or until retirement age. Generally, a $6,000-per-month ceiling is imposed.

Some special benefits that you may decide to include are retirement protection, future purchase options and cost-of-living adjustments. When choosing what benefits to offer, it’s important to figure out what your staff needs — compared to what they may just want.

Necessary Benefits vs. Luxuries

In order to determine which benefits are necessary for employees and which aren’t, it’s essential to conduct a survey, organize small group discussion sessions and hold one-on-one interviews prior to analyzing the demographics of your workplace. Doing so enables you to ascertain the age range of your employees, their health profile, comfort level in using technology, possible severity of disability or illness and current salary.

Collaborating closely with human resources is also imperative in order to determine the extent of coverage that your employees should have. Of course, it will be up to the individual or HR personnel to disclose pertinent personal information. Whatever data you successfully gather will be beneficial in helping you determine what is best for your staff.

With all these aspects in mind, introducing a disability benefits package is a means to attract and retain talented employees. It’s also a way to show that your employees are valued as individuals who have specific, important needs.

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