There are certain, inalienable truths you know to be at the core of what employees really should do: They should be saving more for their retirement. They should be taking part in wellness programs and trying to lose those holiday pounds. Heck, they should even be brushing their teeth more often.

But given the relatively limited bandwidth in the overburdened working lives of most Americans, there’s only so much pre-worry they seem to be capable of handling. And so, that oft-quoted statistic that one in four American workers will absolutely face an employment-disrupting disability during the course of their careers — well, it’s yet another thing we know to be true, but can’t quite wrap our heads around, much less figure out a way to be prepared for it.

So while voluntary disability insurance programs certainly sound good on paper — and are absolutely life-saving benefits when it comes to helping sick or injured workers keep up with bills and stay afloat until they’re (hopefully) able to return to work — even HR managers often aren’t quite with the program when it comes to encouraging employees to sign up.

Barry Lundquist, president of the Council for Disability Awareness, said the “vague notions” that employees have about federal disability benefits mean that far too many find themselves in serious trouble when one of many common health conditions leave them unable to work — and on a long qualification wait for Social Security Disability Insurance, or taking other desperate measures to cover their mortgages or pay for daily needs when the payroll stops coming. Worst of all, some believe that disability coverage is somehow included in the provisions of the Affordable Care Act, which it is not.

“Even HR managers don’t get it, unfortunately, as they dramatically underestimate the risk that employees face,” says Lundquist. “And the HR person is ultimately the one to sit across from an injured or sick employee and tell them that their income will come to a stop after their last check.”

The CDA’s 2013 employer study, “The Disability Divide,” illustrates that disconnect: while 90% of employees and 84% of HR professionals were in agreement that the ability to earn an income is indeed a worker’s most valuable financial resource, only 26% of those professionals said they felt it was “very important” to prepare for a disability.

More than half said they believed employees had never really thought about preparing for a disability, and more than a third of employees admitted that income protection wasn’t something they’d actually considered, as well.

Into that indifference come the statistics. More than 4 million working-age Americans experienced a disabling injury or illness in 2013. But less than 5% of disabling illnesses and accidents take place on the job (resulting in workers’ compensation coverage), meaning that more than 100 million American workers have no private disability insurance coverage. SSDI, the perceived fall-back plan for many Americans, currently serves 8.8 million and 2.8 million additional claims were filed in 2012; the actuaries say that the SSDI trust fund is projected to run out of money by 2016, and will only be floated by the payroll taxes it receives each month.

Defend your income

In the private disability insurance world, the emphasis is then placed not only on prevention but also on resources to rehabilitate and get employees back to work, as quickly as possible. In an effort to raise awareness both at an employee and HR professional level, the CDA has developed a variety of tools — the most pointed of which is Defend Your Income, a flashy, video-game-inspired microsite which poses employees in ninja-styled battles against the most likely suspects in disability: musculoskeletal injuries, cancer, cardiovascular problems or even mental disorders. It’s a less-than-subtle way of driving home what a worker has to lose.

“Really, you need to talk about priorities,” Lundquist says. “Income is your most valuable asset: It pays for retirement, food, housing, everything. We need to focus on the importance of income. But when something happens, it’s too late. Our challenge is getting the message to young people, who think they’re invincible. Ironically, that’s the age when it’s the easiest to get coverage, and then it’s the most inexpensive.”

On the professional side, the CDA’s research and service site, disabilitycanhappen.org, also continues to reinforce the notion that obesity, an unhealthy lifestyle, smoking and even jobs mostly devoted to physical labor continue to be significant (and somewhat preventable) pathways to potential disability. HR professionals can also help employees to more tangibly think about setting up an additional financial nest egg to be prepared just in case, factoring their regular expenses with what it would take to ride out a short-term or even longer-term disability, with or without DI coverage.

“I think that things may be changing a little bit, as well,” Lundquist says, optimistically. “We’ve seen trends that suggest voluntary coverage has become more and more prevalent in the last five to six years. And with all of the escalating health care cost drivers, employers are looking at ways of offloading those costs, and giving employees the choice — and the responsibility — of making decisions on income protection. The products themselves are fairly simple, and they’re not that expensive, on the whole.” 

Meanwhile, in Washington D.C., industry movers and shakers are trying to give the income protection world a more heightened status through their support of the newly created Income Protection Caucus, a bipartisan effort designed to bring congressional-level awareness to the issue. Senators Kay Hagan (D-NC) and Mark Kirk (R-Ill.) have teamed with Reps. Carolyn McCarthy (D-NY) and Stephen Fincher (R-Tenn.) to serve as a Capitol Hill connection for more focus on DI-related issues.

Martin McGuinness, vice president of governmental affairs for employee benefits insurer Unum, serves as one of the industry representatives helping to guide the caucus and its talking points. He says the caucus’s members have some very personal experiences with on-the-job disability: Kirk, who was President Obama’s replacement in the Illinois senate, suffered a stroke in office and was off the job for more than a year in rehabilitation before making a dramatic return, and McCarthy is currently dealing with cancer, though she has a very good prognosis and expects little disruption to her own work.  

“[These kinds of] benefits are little understood by employers, the industry and the government itself, and we’re constantly looking for ways to communicate our message — the reality that the risk of becoming disabled is much higher than people anticipate,” McGuinness says. “But the benefits to having disability insurance protection are many: Not only do employers get a more motivated and engaged workforce, the employee is also more productive, given that they have fewer financial concerns.”

McGuinness says the bigger thrust for the new caucus is the reality that the government itself could benefit from the expansion of private disability insurance and reduce pressure on programs including SSDI, Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program — all measures of last resort for employees who have financial needs but are not covered by private disability insurance.

Caucus research conducted by Charles Rivers Associates suggests that even a small expansion in the breadth of employer-sponsored voluntary DI benefits could result in a $4.5 billion per year savings to TANF and SNAP programs and some $2.5 billion per year in SSDI costs.

To that end, while the caucus and its heightened profile are good for giving DI a heightened profile in a political climate where the ACA has choked out other benefits concerns (“this is definitely a difficult sales environment, as employers are deferring their benefits decisions until there’s more certainty about the ACA,” McGuinness admits), they have two concrete projects in the work, in addition to the “Dear Colleague” letters the caucus members submit to their fellow representatives.

First, McGuinness says the caucus is hoping to work with the Department of Labor to help create a national-level awareness program for disability insurance in the spirit of the long-term care insurance industry’s push for Longtermcare.gov, an online clearinghouse for consumer-level information and costs of LTC products.

Second, McGuinness has been working with Congress to clarify and simplify the process of offering DI benefits as an auto-enrollment feature, not unlike health and retirement benefits. “We’re not asking for a mandate or incentives, but we think there should be greater legal certainty that an employer wouldn’t be in violation of rules such as Section 125 plans for automatically adding these benefits. We’re in the process of developing a bill,” he says.

“The most important thing is for employers to understand that offering these benefits is not complicated, and it’s not expensive, either — it’s a simple matter of making a payroll spot open,” he adds. “The average income replacement level for a typical worker is 60% and that equates to about $25 a month for coverage, only $300 a year. Our research indicates a lot of support from employees once they know about the risk, and once they’ve found out what private DI offers, versus the federal programs. They’ve also shown a willingness to share in the costs.”  

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