Tulsa Group Disability Insurance
How sad it is that group disability insurance is the most underused and neglected benefits in the small to medium sized employee benefits marketplace?
Most large employers offer both short term and long term disability coverage for their employees, but most small to medium sized employers do not.
At The McNett Agency, we find that many small employers do not offer this disability insurance simply because they haven’t thought about it, and their insurance broker has not brought it up for discussion.
When an employee becomes long-term disabled, either through a sickness or accident, both the employee and his employer have a real problem.
The employee is facing a future where he may never be able to work again because of a severe physical disability. How does he pay for housing, food, clothing and other basic necessities? He may or may not qualify for Social Security disability benefits, but even in a best case scenario, these benefits can take years to qualify for.
The employee’s boss faces another type of problem. How long can he reasonably keep this employee on the payroll? After vacation and sick time runs out, does he just abandon this employee to whatever his lot may be? Perhaps this is a key employee who is not just an employee but a friend. After a certain amount of time has elapsed, any salary paid to a disabled employee is no longer tax deductible to the business, under IRS rules. There is absolutely no good answer here, unless the employer has done some planning beforehand.
This situation can be avoided by putting a Long-term Disability( LTD) insurance program in force BEFORE someone becomes disabled. LTD insurance is relatively inexpensive.
When an employee becomes disabled, benefits kick in (typically two-thirds of pre-disability income) after a he has been disabled for a specific length of time (30, 90 or 180 days.) Benefits last until full return to work, or until qualification for Social Security retirement benefits.
Many employers offer Short Term Disability (STD) plans (for the first 26 weeks, for example) for minor health situations that may keep an employee out of work for a limited amount of time. Then, if the employee is still disabled, a Long Term Disability plan kicks in at that point.