I get this question a lot. My answer? Disability insurance. Surprised?

Tech employers and their employees consistently rank medical insurance as the most desired benefit, but let’s face it, it’s expensive. Medical insurance typically represents 65-75% of the total benefits cost of an employer. Because of this, medical insurance usually receives most of the attention when benefits decisions are made, and rightfully so!

That said here’s why I say disability insurance is a cost effective and valuable option for any company to include in their benefits plans.

Ancillary employee benefits, which are typically bundled with medical insurance, are often overlooked during the decision-making process. These include benefits like dental insurance, vision coverage, life, AD&D and 401k plans.

“Short term and long term disability insurance protects employees’ number one asset, their paycheck.

Of these ancillary employee benefits, disability insurance provides the greatest value for the coverage received. Why? Short term and long term disability insurance protects employees’ number one asset, their paycheck.

Group disability insurance typically pays between 60-70% of an employee’s pre-disability salary if and when they become disabled. These benefits may be paid out over a fairly long period (in some cases to age 65 and beyond) depending on the nature and circumstances of the disability. Benefits payments under these policies may be triggered by a variety of causes, not all of them work-related. (I’m looking at you weekend warriors out there!)

Why is This Important to You?

As you well know, the tech industry is highly competitive, and good people can be hard to hold on to, even scalped if they’re offered a deal they can’t refuse. There’s also the fact that people are more and more active in their off time, which can lead to images like this…

Committing a small portion of your benefits dollars to ensure your employees are taken care of in their times of need is a simple, cost-effective way to hold on to your staff.

“Group disability products typically represents ~5% of an employer’s annual benefits cost

What’s the Cost to You?

Group disability products typically represent ~5% of an employer’s annual benefits cost. That said, a surprising number of employers—over 50%—DON’T purchase it.  Take a look at this chart, which illustrates a typical benefits mix and cost for tech employers:

The average employer that offers benefits through the WTIA has twenty employees. Their annual employee benefits costs range from $200,000 – $300,000 per year. This means that the life and disability insurance would cost the average employer $10,000 – $15,000 annually. Any way you slice it, this is major value for the premiums paid!

Inform Your Employees!

If you’re planning to include disability insurance in your benefits plan, be sure to inform your employees of this benefits, particularly since it isn’t typically offered by employers. So what value does disability insurance offer your staff?

•       A sense of security. Knowing that if something happens and they’re unable to work, they won’t be left high and dry.
•       Payees receive 60-70% of their salary during the time they are unable to work.
•       Payments are tax-free.

 

As WTIA’s Cheif Benefits Officer, I work closely with member-company decision makers to help them get the most out of their WTIA membership and to offer the best benefits plans for their employees. If you’re interested in learning more about the WTIA’s disability insurance, click here or contact your broker to request a comprehensive quote with medical and ancillary options.