In today’s time, employees are rapidly coming to realize – their job is their number one asset. Now, we need to help them understand the value of protecting their income if they are not able to work due to an accident or illness.

Nevada, does not have a state funded disability program. If an employee is hurt (off the job) or becomes ill and can not work, their options are limited when it comes to purchasing income replacement insurance. Typically the best place to purchase this type of protection is through programs offered employers.

For the employers, several questions arise:

  1. What programs are best for an employer to offer?
  2. How do employers ensure their employees are not being charged excessively for these programs?
  3. How do employers ensure their employees are being properly covered?

Most employers see value in sponsoring group products like health, dental and vision insurance and typically leave it to the employees to purchase their income replacement insurance on a voluntary basis. While this approach works well it does have some drawbacks.

Typically:

Most of voluntary disability programs being offered to employees are not guaranteed issue because they are approved or denied on an individual basis.
These programs, because they are more cost prohibitive than “True Group” programs, do not allow the employees to replace a full 60% of their income. Nor do they give the employee the ability to buy protection for the duration necessary to return to work.

Quite simply – cost – voluntary benefits while billed on a group basis are individual products. For the same price of a typical voluntary short term disability product, most employees can purchase “true group” short and long term disability protection.
This leads me to the “Value Proposition”

The typical dental plan will run between $22 and $35 per month per employee. Depending on how much the employer is sponsoring, the employer outlay would be between $11 and $35 per month per employee. So which product brings more value to the employee? Most employees would say their dental plan is more important than disability insurance. However, from an employer perspective; by providing and paying for an income replacement benefit you now have the peace of mind that should an employee be disabled due to an accident or illness they are financially protected. This also alleviates the “need” or “feeling” of financially assisting an employee who can not work due to an illness or accident.

The Solution

Dental carriers are now offering very competitively priced voluntary programs. By shifting the dental insurance to a voluntary program and picking up the disability insurance as an employer paid benefit – 80% of the time an employer can save money. The typical short term disability program will run between $8 and $18 per month per employee (depending on age and income). By taking this approach, the employee can now drop the voluntary disability product and shift those dollars to sponsor the dental plan. In addition, an ‘individual based” voluntary disability product runs between $22 and $48 per month, the employee ends up saving money that can go back into his/her pocket. Also, if the employer offers a true group Voluntary Long Term Disability Program, the employee can use the savings to fund his/her long term disability insurance.

The Result

By taking this approach to dental and disability insurance an employer can save money. More importantly, these days, it is becoming a responsibility of the employer to ensure programs being offered to the employees do not waste their wages away in excessive voluntary product insurance premiums. This approach ensures the premiums are not excessive and gives the employee the ability to choose whether or not to participate in the dental and long term disability while ensuring the employee has comprehensive short term income replacement coverage.

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