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More employees being asked to contribute to disability insurance

The weeks between Halloween and Thanksgiving typically entail an activity that is somewhat of a ritual among employees in California and throughout the U.S.: open enrollment. This is the time of year when workers change their health insurance and other benefits elections, and they are generally bound to those choices for the next calendar year.

This year, American workers may be seeing something new on their benefit elections: higher premiums for disability insurance. According to industry analysts, more employers are asking their employees to pay more for disability coverage, or providing less coverage with the option of employee-funded enhancements. In fact, more than half of U.S. employers now require their employees to pay the full cost of long-term disability coverage.

For most American workers, a short-term or long-term disability is usually not part of the plan. However, some experts recommend that employees consider adding coverage, especially if they are young and have many working years ahead of them. Of course, workers could apply for and receive Social Security Disability benefits, but the average benefit amount of $1,070 per month may not be enough to pay the bills.

The Social Security Administration estimates that workers between the ages of 20 and 29 have a 30 percent chance of becoming disabled over the course of their career. This statistic may be a bit overblown: U.S. Census Bureau data which states that just under 7 percent of working-age Americans are unable to work because of a disability at any given time. In addition, disability experts say that a worker has a five in 1,000 chance of becoming "totally and permanently disabled."

However, as the economy continues to struggle and health care costs continue to rise, it may not be a bad idea to consider funding a little extra disability coverage.

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

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