Oregon Business – How to Prevent Reverse Discrimination with Disability Benefits

Brand Story – Employers are always looking for ways to improve benefit plans and reduce risk.

The combination of group long term disability (LTD) insurance and individual disability insurance can result in a more comprehensive disability program that maximizes employer and employee protection. Group long-term disability plans are a cost-effective way to provide paycheck protection to all employees, but group plans can rarely protect executives and top earners to the same extent. For example, a group LTD plan with a maximum monthly benefit of $ 5,000 does not adequately cover employees earning more than $ 100,000 per year.

Individual disability insurance provides additional coverage that complements the basic LTD plan and prevents reverse discrimination (vs. SHRM survey found, 78 percent of employers say their long-term disability plans do not include no coverage for bonuses or commissions, and two in three employers surveyed report that about 20 percent of their employees are affected by the benefit cap.

The benefits for the employer of executive and / or supplementary disability insurance include:

• Attract and retain talent, as coverage meets the needs of high earners and provides better benefits and more comprehensive coverage for all employees.

• Provide coverage (paid by the employer or voluntary) to a certain category of employees.

• Provide more comprehensive disability coverage to employees in terms of scheme features, such as protection of their own employment until the end of the benefit period and / or the normal social security retirement age.

• Obtain discounts based on volume.

• Simplified administration with comprehensive training and registration support (online, in person or by phone).

• Adding stability and predictability to LTD costs by reducing the maximum group LTD and transferring that amount to an individual disability plan.

Two in three employers surveyed indicate that about 20 percent of their employees are affected by the benefit limit.

All employers can benefit from framework and / or supplementary disability plans. White-collar employers, such as law firms, architectural firms, and physicians, can pay for coverage for all professionals, while employers who are predominantly blue-collar workers, such as manufacturing companies, can benefit from an exclusion plan for their senior employees. employees.

There are many ways to structure disability plans, and an experienced benefits advisor can work with you to ensure that the plans on offer match your benefits strategy and company goals. The most common plan design consists of employer-paid group LTD insurance and employee-paid individual disability insurance.

Some employers choose to offer voluntary group LTD insurance and employer-paid individual insurance to their high-value employees.

Plans can also be designed to provide employer-paid LTD insurance for all employees, with an employer-paid framework for individual disability insurance and voluntary individual disability insurance for other employees. There are many options available for employers of all shapes and sizes.

A good place to start to begin the process of reviewing your disability coverage is to compare your maximum monthly group LTD benefit with the average total income of your top five earners. If your group LTD plan does not fully cover high earners, supplemental individual and / or senior management disability insurance can provide a more comprehensive disability program that benefits both employer and employees.

Parker, Smith & Feek is a full-service brokerage firm providing commercial insurance, risk management, bonding, employee benefits and personal insurance solutions. Janae Sorenson is Vice President and Account Manager in the Benefits Department at Parker, Smith & Feek in Portland. She works with clients in a variety of industries including healthcare, nonprofits, technology, and professional services. Janae’s tenure as president of a life and disability insurance company gives her a unique perspective when consulting clients on life, disability, voluntary and executive benefits. This specialty allowed him to acquire experience in partnership with national and international employers. A frequent speaker and published author on the benefits industry, she is passionate about creating robust benefit plans that lower costs for both employers and employees. Contact Janae at (503) 416-6874 or This e-mail address is protected from spam. You need JavaScript enabled to view it..

References and Resources:
1. https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/pages/shrm-massmutual-disabilitybenefits.aspx