If you’re an employer who plans to offer group disability benefits, setting up the right disability insurance plan can involve a number of decisions. You also need to understand how the policy works, what it covers and how the benefit is paid out. Employers must consider options on how to fund the disability insurance policy. You must think about what the range of employees receiving the benefits will be and what the criteria for eligibility will be. Unlike employee health insurance, there are no individual policies. All employees will be under the same policy held by the employer.
When considering how to fund your disability benefits, you might want to consider whether your business wants to pay the entire costs, or if you want to have employees contribute to the plan. If the employer pays for the plan, all eligible employees must be covered. If the plan is contributory, you usually must cover about 75 percent of eligible employees. Your business has the right to set eligibility criteria such as setting a minimum length of employment before the employee is eligible for group disability benefits.
Common benefits associated with disability insurance include employee reimbursement for lost wages. The employer must decide whether to choose a plan which will reimburse all of the wages or a percentage of them. For example, long term disability often pays out between 50 and 70 percent of benefits. The length of short term or long term disability plans can also vary, as can the period before payments begin.
Your employees are your family away from home. Offering group disability benefits lets them know they are protected in the unfortunate event that they are ever partially or totally disabled. Blair Insurance can help you to find an understand a group disability plan that works for your business or organization. Contact us today.