Survey Says: Most Offer Disability Insurance, but with Longer Waiting Periods

By Stephen Bruce, PhD, PHR

Just My E-pinion LOGO

Seventy-seven percent of respondents report that their organization requires a waiting period of at least 7 days before short-term disability insurance coverage begins, which represents a significant increase over the 65 percent of companies that reported requiring the same waiting period in BLR’s Survey of Employee Benefits in late 2006.

In the most recent survey, most of the companies responding pay a short-term benefit of 60 percent to 69 percent of weekly pay for 13 weeks or less, funded primarily by conventional insurance. 

The trend toward longer waiting periods was also found for long-term disability insurance, with 94 percent of respondents requiring a delay of 3 months or more, compared to 80 percent of respondents in the earlier previous survey.

The current survey included more than 400 responses and was conducted by BLR’s HR Daily Advisor in March-April 2010. The results provide a good guide against which to evaluate your programs. Here are the details:

---

See what everyone’s talking about! Check out BLR’s remarkable everything-you-need-for-HR website, HR.BLR.com, at no cost or risk, and get a complimentary special report! Get more info.

---

Does the organization offer short-term disability insurance?

	Number	Percent
Yes	331	77%
No	99	23%

If yes, what is the short-term disability funding method?

	Number	Percent
Conventional Insurance	199	66%
Self-Insurance	88	29%
Both (partially self-insured)	14	4%

 

What is the waiting period before disability insurance benefits begin?

	Number	Percent
0 days	20	7%
1 day	9	3%
2-3 days	7	2%
4-6 days	33	11%
7 days	132	44%
8-10 days	29	10%
More than 10 days	70	23%

What is the maximum short-term disability weekly benefit, in dollars?

	Number	Percent
Not a set dollar amount	163	59%
Dollar limit under $200	9	3%
$200-399	14	5%
$400-599	26	9%
$600-799	12	4%
$800 or more	52	19%

What is the maximum short-term disability weekly benefit, in percentage of earnings?

	Number	Percent
Not a % of earnings	30	11%
Under 60%	23	8%
60%-69%	180	64%
70%-75%	12	4%
76%-85%	7	2%
86%-99%	0	0%
100%	30	11%

What is the length of short-term disability coverage?

	Number	Percent
Fewer than 13 weeks	57	19%
13 weeks	93	32%
14-18 weeks	8	3%
19-25 weeks	14	5%
26 weeks	108	37%
More than 26 weeks	16	5%

Who pays premiums for short-term disability coverage?

	Number	Percent
Employer	208	70%
Employee	61	20%
Both	27	9%

Does the organization offer long-term disability insurance?

	Number	Percent
Yes	332	82%
No	75	18%

If yes, what is the long-term disability funding method?

	Number	Percent
Conventional insurance	288	93%
Self-Insurance	19	6%
Both (partially self-insured)	3	1%

What is the waiting period before commencement of long-term disability benefits?

	Number	Percent
1 month	13	4%
2 months	5	2%
3 months	164	53%
4 months	4	1%
5 months	0	0%
6 months	105	34%
More than 6 months	20	6%

What is the maximum percentage long-term disability weekly benefit?

	Number	Percent
Not a % of earnings	11	3%
50% or less	14	5%
51%-59%	1	0%
60%	213	69%
61%-74%	66	21%
75% or more	4	1%

---

Have you road-tested the biggest bargain in HR? Try HR.BLR.com at no cost or risk and receive a special report that’s yours to keep no matter what you decide. Get the details.

---

Who pays premiums for long-term disability coverage?

	Number	Percent
Employer	236	76%
Employee	49	16%
Both Employer and Employee	27	9%

 

Does the organization offer group automobile insurance?

	Number	Percent
Yes	19	5%
No	376	95%

Does the organization offer group homeowners’ insurance?

	Number	Percent
Yes	18	5%
No	377	95%

Does the organization offer group prepaid legal services?

	Number	Percent
Yes	50	13%
No	343	87%

More than 400 readers participated in the survey. Most (86 percent) were HR directors, managers, or staff. There was a wide mix of industries represented, with respondents concentrated in the Northeast, South, and Midwest. Forty-four percent of respondents had 1-99 employees; 34 percent had 100-499 employees; 9 percent had 500-999 employees; and 13 percent had 1,000 or more employees.

Thanks to all who participated in the survey. More surveys are coming soon.

Question: Do you find these surveys helpful? Is there any topic in particular you would like us to survey? E-mail me at sbruce@blr.com or use the "Comments" button below.