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The global pandemic has changed workplaces throughout the U.S., placing a spotlight on employers to reevaluate their benefits policies and offerings. The increasingly competitive market for talent requires businesses to use more than salary to attract and retain skilled professionals.

Employers are finding employee benefits packages to be a powerful tool for employee recruitment and retention.

Auxiliary benefits—those that go beyond medical, vision and dental coverages—can have an outsize impact relative to their cost. Providers often additional incentives to bundle several of these benefits together.

Income or job loss due to a short or long-term disability can be financially devastating, but insurance can provide employees with security and financial protection. According to the U.S. Bureau of Labor Statistics, the cost of providing short and long-term disability insurance is approximately one percent of total compensation costs.

There is still uncertainty with the long-term effects of the coronavirus (COVID-19), alongside an increasing understanding that another pandemic is likely to occur in the future. Offering short-term and long-term disability insurance to employees provides the security and financial protection to ease some of that concern.

The Importance of Short-Term and Long-Term Disability Insurance

Disability benefits provide a form of income replacement and financial security to employees who are unable to work due to a non-job-related illness or accident. The pandemic has many employers and employees focusing on the illness aspect of disability insurance, and it is important to note that insurance carriers evaluate COVID-19 as any other medical condition.

Short-term disability benefits can cover illness from COVID-19 if an employee is unable to work because of a verified medical condition. Employees who are unable to see an in-person physician due to social distancing can typically obtain medical verifications through virtual visits with medical professionals. To assist with mitigating the stress of claiming short-term disability during a pandemic, some insurance carriers are waiving the elimination period (waiting period) for employees who are medically diagnosed with COVID-19.

Short-term disability benefits typically only cover a few months. For employees who no longer can work for an extended period (sometimes until the age of retirement), long-term disability works in tandem with short-term disability to ensure there is no gap in coverage; providing a broader protection and safety net for employees and their families. The uncertain long-term effects of COVID-19 places an increased importance on long-term disability benefits. Fortunately, long-term disability benefits offer financial protection if an employee sustains a serious illness, such as a chronic respiratory disease after dealing with COVID-19.

Common short-term disability claims include:

    • Pregnancies
    • Bone and muscle disorders affecting the back, spine, knees, hips, and other body parts
    • Digestive disorders
    • Mental health issues including depression and anxiety

Common long-term disability claims include:

    • Osteoarthritis
    • Cancer
    • Cardiovascular and circulatory disorders (heart attack, coronary artery disease)
    • Injuries such as fractures, sprains, and strains of muscles and ligaments

Mental Health is Priceless

Some insurance carriers offer an Employee Assistance Program (EAP) at no additional cost to employers who provide short-term and long-term disability benefits to their employees. EAPs connect employees with confidential, professional specialists to assist with managing and improving mental health issues.

The importance of EAPs has become more prevalent amongst employers with the heightened need to help employees cope with the uncertainty of a global pandemic.

Life Insurance: Preparing for the Future

The global pandemic is a sobering reminder that our health is not guaranteed. Thankfully, there are no life insurance policy exclusions regarding pandemic events such as COVID-19.  Some insurance companies even provide bundle discounts and extended rate guarantees for employers offering life insurance with short-term and long-term disability insurance. Offering these types of benefits as an employer not only demonstrates a sense of mindfulness and appreciation for its workforce, it also establishes a solid foundation of financial preparedness for potential risks in the future.


Risk Cooperative helps organizations navigate the complex world of health insurance and employee benefits.  Learn More