Disability insurance is making headlines. A recent podcast of WBEZ Chicago's "This American Life" highlighted the growing number of Americans receiving federal disability compensation. According to the report by NPR's Chana Joffe-Walt, the number has almost doubled in the last 15 years to 14 million Americans. In April, The Wall Street Journal looked at the difference between federal and private long-term disability insurance. Leslie Scism reported that while only 0.5% of government disability recipients return to work again, nearly 20% of private LTD workers do.
So with a greater success rate than the government and nearly 100 million American workers not having private disability insurance, according to the Council for Disability Awareness, what lies ahead?
"The industry continues to struggle with the importance [of disability] compared to, for example, life. There's a coverage gap when it comes to disability, and educating is going to be important," says Andrew Sullivan, senior vice president of disability and small market business at Prudential Group Insurance. He adds that awareness of the likelihood of disability and the availability of disability insurance will become increasingly popular as "more employers shift to 100% voluntary."
Alex DuMont, assistant vice president of product marketing at The Standard Insurance Company, says the trend toward disability becoming a cost-share between employers and employees, or to a completely employee-paid benefit, "depends on the quality of the enrollment support that's provided." She adds: "For sure, the industry has seen challenges in getting people enrolled."
One solution, DuMont says, at least in getting the younger generation of Americans enrolled, is to shorten voluntary lifespans. Let employees "choose or pick how long they want to be eligible, say for two years, instead of until age 65."
Eric Reisenwitz, senior vice president of market solutions at Lincoln Financial Group, says there aren't really any new products in the disability space right now, but there are growing connections between voluntary plans that could creatively sell disability-like coverage.
"Especially younger people who don't think they're going to get sick or have any accidents happen to them, the mixture of a high-deductible health plan and a solid critical illness plan could be as good of a cover as they may have had prior to any of the health care reform initiatives coming into play," he says.
"Employers are looking for more reports and analysis on productivity and wellness programs. You'll see a lot more from employers asking what they can do to actually prevent disabilities," continues Reisenwitz.
Prudential's DuMont adds that there might even be fallout from the Affordable Care Act that could impact disability and other voluntary products that industry insiders have yet to imagine. For now, she says, it's important for employers to leverage their experience and carefully choose an "insurance partner that is able to show value and at the same time leverage cost overall."
