Employers are beginning to drop employer-paid group disability insurance plans in response to recent changes to the Affordable Care Act (ACA). Instead employers are offering voluntary employee-paid plans.Changes made to the ACA ensure all employers with more than fifty employees offer health insurance to all employees by 2016. If health coverage is not provided the employer can be penalized.
According to an employer survey carried out by the Council of Disability Awareness, 6 percent fewer employees had disability coverage in 2013 compared to 2009, even though the number of workers increased more than 6 million during that period.
Employers are offering defined benefit plans that contribute a set amount of money to each worker to use for insurance coverage. This set sum rarely covers the full cost of health, dental, life and disability coverage, meaning employees either have to do without some insurance coverage types, or make up the difference themselves.
With the economy still in recovery, employees are either reluctant to or unable to pay for additional coverage. They are seemingly unaware or oblivious to the effect a long-term disability (LTD) would have on their income and lifestyle.
According to Unum, a major provider of disability insurance, 3 out of every 10 workers between the ages of 25 and 65 will experience an accident or illness that keeps them out of work for 3 months or longer, with nearly 60% of these injuries occurring off the job. Without disability coverage, an employee will not receive a salary while out on leave.In particular, the younger generations are less concerned with purchasing disability insurance. According to The Hartford Financial Services Group, 57 percent of Gen Y workers, who are in their 20s and early 30s, buy life insurance, but just 45 percent have short-term disability insurance, and even fewer – 39 percent – have long-term disability insurance.
An employee who doesn’t have sufficient disability coverage usually takes longer to return to work. This also affects employers who need to cover for absent employees.
To encourage employees to obtain adequate care for themselves and their families, employers need to educate their employees on the risks involved. Visit obamacarefacts.com to learn more and keep up to date with changes to the ACA.