Brokers: Focus on Disability Insurance in 2021

Disability insurance is often misunderstood when it comes time to choosing benefits. Brokers need to keep Long-Term Disability (LTD) and Short-Term Disability (STD) on their radar this year, as the pandemic has highlighted how disabilities do not only result from accidents, but also from illnesses. In fact, 90% of disabilities are caused by illnesses.  More than 1 in 4 of today’s 20-year- old’s should expect to be out of work for at least 1 year due to a disability before they retire. The top 5 reasons for LTD claims include musculoskeletal disorders, cancer, pregnancy, mental health issues, and injuries.

As young professionals begin their careers, it’s important that employers properly explain the importance of STD and LTD coverage in the case that any unexpected accidents or illnesses may occur. Most COVID-19 patients showed to have only suffered for a few weeks, but there have been quite a few who have spent weeks or months hospitalized, with some still suffering long-term or lingering effects from the virus. For this reason, employers are likely to add or update their long-term disability benefits package.

The pandemic has also drawn attention to how LTD policies deal with stress-related disability, especially among health care workers. Typical LTD policies limit nervous/mental claims to 24 months of a claimant’s lifetime.  It is important to understand the mental health and/or stress-induced diagnoses that the various insurance carriers may cover in their LTD and STD plans.

Brokers should also ensure health care clients have adequate disability coverage for any stress or mental health claims related to COVID-19. Health care professionals may be at risk for having their benefits denied or reduced come time for claim reimbursement/submission.

Employers enrolled in self-funded plans should revisit their healthcare and benefit plans for their employees as we begin to see longer-lasting side effects from COVID-19.