The Growing Importance of Disability Insurance for Caregiver Employees

In the U.S., an estimated 53 million Americans provide unpaid care to a loved one. More than 60% of them also work full time. Nearly half spend 10 to 29 hours a week on caregiving, and more than 25% devote 30 hours or more each week.

Those numbers come from the industry news source BenefitsPRO. It notes that job and financial challenges don’t just affect caregiver employees. If they can’t work due to illness or injury, it creates ripple effects on the loved ones they care for.

Disability insurance can be a lifeline for the financial security of caregiver employees and those in their charge. Offering this benefit to your employees can also strengthen your organization.

The Financial Challenges Of Caregiving

According to the Council for Disability Income Awareness (CDIA), more than 50 million employees don’t have disability insurance. Offering this insurance can help meet a growing need.

BenefitsPRO highlights that caregiver employees spend an average of $7,200 annually on caregiving. Losing income can be financially devastating for caregivers and those they care for.

According to the CDIA:

• Nearly 40% of adults can’t afford an unexpected expense of $400.

• Almost 80% of individuals who have filed for bankruptcy say that lost income contributed to their financial challenges.

• Nearly 45% say they have lost work because of a medical issue.

Disability insurance pays a percentage of an employee’s salary when the employee is unable to work due to injury or illness.

Short-term disability provides a percentage of an employee’s salary while they are out of work. There is typically a waiting period of seven, 14 or 30 days before disability income begins. According to the U.S. Chamber of Commerce, short-term disability typically pays 40% to 70% of the employee’s normal income. Benefit periods often range from six weeks to six months.

Long-term disability begins once an employee runs out of short-term disability benefits. According to the legal publishing company Nolo, policies commonly pay 50% to 80% of the employee’s salary. Depending on the policy, long-term disability benefit periods can range from a few years up to retirement age.

How Your Organization Can Help

As with all employee benefits, the value of disability insurance is multiplied by awareness and use. BenefitsPRO reports that the average employee spends less than 20 minutes researching and enrolling in benefits. Most caregivers are even more pressed for time than the average person

Communicating with employees about disability insurance does more than save time. It raises awareness about offerings that may otherwise go unnoticed.

Many employees don’t realize the likelihood of needing care or becoming a caregiver. But disabilities don’t just affect a few individuals. The Social Security Administration says nearly 25% of 20-year-olds today will likely miss work due to a disability before reaching normal retirement age.

Education on risk factors can further increase awareness of the need for disability insurance. According to the CDIA, the top reasons for long-term disability are:

• Musculoskeletal disorders

• Physical injuries

• Cancer

• Mental health challenges

• Circulatory issues such as strokes or heart attacks

How Disability Insurance Strengthens Your Organization

The advantages of disability income extend beyond individual employees. Your organization can benefit too.

Employers often underestimate how many of their employees are caregivers outside of work. Highlighting disability insurance as part of your caregiving benefits can set you apart in the battle for talent. SHRM reports that helping employees find and use caregiver benefits, such as disability insurance, can increase attraction and retention.

Retaining valuable caregiver employees pays organizational dividends, including:

• Saving money on replacement costs related to recruiting, hiring and onboarding

• Reducing absenteeism, presenteeism, and paid and unpaid leave

• Increasing engagement and productivity

• Improving mental, physical and financial health outcomes for caregiver employees

• Limiting legal claims related to hostile work environments and wrongful terminations

Learn more about the benefits of disability insurance with Menicucci Insurance Agency. Call our expert agents at 505.883.3683 or visit mianm.com/contact