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CEO Confidential

3 Reasons Why Employers Should Provide Disability Protection

Today’s tight labor market is forcing companies to up the ante when it comes to employee salary and benefit options. A tighter job market means prospective employees are elevating their expectations for salaries and benefits, thus raising the bar and making it more difficult for employers to attract and retain the best talent.

The deciding factor is not always salary. According a survey by the American Institute of CPAs, when given the option of taking a job that pays more but has no benefits or taking an identical job that pays less, but has benefits, 80 percent would choose the latter.

For employers, the costs of better benefits can add up quickly. That’s why many employers choose to forgo offering components like short- and long-term disability coverage. However, in this particular case, there is a federal safety net that employers can tap into without breaking the bank: Social Security Disability Insurance (SSDI).

By working with an SSDI Extended Benefits provider, employers can, for free, simply direct their workers with disabilities to a trusted resource to take it from there—getting them the benefits they deserve, and possibly back to their previous position with their employer. If this isn’t enough of an incentive, here are three reasons why providing this protection is absolutely essential.

No. 1: Employees Aren’t Invincible

The reality is, accidents happen even if we don’t think they will. In fact, the Council for Disability Awareness reports that of today’s 20-year-olds, one in four will experience a disability before retirement age which puts them out of work for at least a year. The most common long-term disability claims occur with musculoskeletal disorders, cancer, pregnancy, mental health issues and injuries.

Without any sort of disability protection, employees are at greater financial risk and must navigate their next steps entirely on their own. Though they may be able to use sick time and vacation days at first, that typically runs out before their SSDI benefits kick in. Two-thirds of initial SSDI applicants are denied, which puts many into a waiting period of approximately 18 months to appeal their case.

Through Extended Benefits, employers can effortlessly connect employees with a resource that can help them increase their odds of being approved by the Social Security Administration. The sooner former workers are receiving SSDI income, the sooner they can focus on their medical recovery or stability. As they work toward that goal, they can also learn about another SSA support, the Ticket to Work (TTW) program.

No. 2: Talent Appreciates Ancillary Benefits  

Without having to pay for a short- or long-term disability insurance plan, employers can protect their employees from financial devastation and simultaneously increase their bottom line. According to a new study by Binghamton University, when employees feel their employers are compassionate, their performance increases. Even better, satisfied employees are more likely to stay—a huge win considering employers will spend, on average, 42 days and more than $4,000 to fill a position.

Given this insight into what prospective employees are looking for, there is no better time for employers to increase their offerings. Including SSDI Extended Benefits isn’t just any old perk, either.

Ensuring employees don’t slip into poverty should they acquire a disability is imperative because, as reported in the Federal Reserve Board’s 2017 survey on household economics, 51 percent don’t have money set aside in case of an emergency. Further, 44 percent of respondents wouldn’t be able to afford an emergency expense of just $400. Knowing their employer has information on next steps if the unthinkable were to happen could be a huge relief to talented workers. 

No. 3: Protection Doesn’t Require a Price Tag 

Short-term disability insurance plans only cover employees for a set amount of time, typically less than one year. By comparison, long-term disability insurance plans are more expensive and provide coverage for two years to life, in some instances. Both can be expensive add-ons, which is why only 42 percent and 34 percent of private-sector workers have short-term and long-term disability plans, respectively. For public-sector workers, those numbers are even lower, and for 51 million Americans, SSDI is their only option.

The most forward-thinking and competitive employers will realize that without having to spend any additional money, they can connect their employers with this valuable safety net and be a hero to their workers. Employees have information and access to assistance to help them persevere through a severe, work-disrupting disability. To qualify for SSDI benefits, employees must satisfy certain conditions and requirements, among them having paid FICA payroll or self-employment taxes for five of the last 10 years. 

Today’s competition for talent means it’s getting harder for employers to attract qualified candidates without boosting salaries and benefits. To make sure they’re not missing out on the most talented workers, employers need to include disability insurance. It’s a paramount benefit that’s no longer optional. For both employers and employees, it pays to be protected, and SSDI Extended Benefits makes it that much easier.

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John McGrath
John McGrath is director of business services at Allsup, LLC. McGrath assists employers and self-insured businesses with the process of evaluating their benefits programs in coordination with federal programs that their employees can access when and if needed. John is a regular contributor to the CEOWORLD magazine.