New trend: Employees bearing more costs of long-term disability benefits

The new general trend in long-term disability benefits and short-term disability benefits is that employers are asking employees to shoulder more of the cost burden. Not only are employees being asked to pay more disability coverage, the length of coverage for short-term disability is shrinking and the wait for long-term disability to start is growing longer. Workers in Wisconsin may have experienced this new trend during the current enrollment for 2012 benefits.

Experts in the benefits consulting industry say employees will see a “gradual slide” to where they are more responsible for the costs of long-term disability coverage. In the past employers used to cover the entire cost of coverage but may now provide central benefits and allow workers to handle additional coverage features.

Not only are employers pushing costs on to employees they are also changing coverage limits and waiting periods. Employers are decreasing the coverage of short-term disability benefits and lengthening the time period before long-term disability benefits kick in.

According to the insurance industry research group LIMRA, in 2009 more than half of employers required employees to pay the full-cost of long-term disability coverage. Seven years earlier only 41 percent of employers required employees to cover the full cost of long-term disability coverage.


Alan Olson writes this web-log to provide helpful information regarding long-term disability cases. He practices long-term disability law throughout the United States from his offices in New Berlin, Wisconsin. Attorney Olson may be contacted at [email protected] with questions about the information posted here or for advice on specific disability benefit claims.

Like most forms of insurance, long-term disability insurance is meant to protect individuals from an unforeseen catastrophe. Young people often overlook coverage on the thought that they are healthy and not likely to become disabled. The Social Security Administration estimates that an individual in his or her 20s or 30s has a 30 percent chance of becoming disabled over the course of a career. Many experts recommend some disability coverage despite the low chance of disability.

Source: Reuters, “Analysis: Employee disability benefits get costlier, complicated,” Linda Stern, Oct. 25, 2011


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