Often, I receive inquiries from individuals wanting to purchase short-term disability on an individual basis. Typically, carriers will not offer short-term disability individually as it is not cost effective. Standard short-term disability benefits start either first day for injury or illness or often first-day injury and seventh-day illness. Can you guess who is traditionally most interested in this benefit? Young females. Can you guess why? BABIES. Short-term disability would cover a portion of mommy’s income from day seven after the birth possibly up to 13 weeks (usually the 6 – 8 weeks depending on the type of birth). Supplemental carriers like AFLAC, Colonial, All State, etc. offer this benefit but only on a group basis. The benefit is often written from 50% to 70% of the employee’s income and is what would be paid out during a short disability. No carrier will pay out 100% because of cost and incentive to go back to work. When purchasing short-term disability and paying the premium, it is in the employee’s best interest to pay the premium AFTER tax out of their paycheck. The reason is that when they use the benefit NO taxes are taken from the benefit dollars being paid out.
Another benefit offered by supplemental carriers is an Accident policy. EVERYONE knows the AFLAC commercials where people get hurt. Personally, I have slipped on the ice and gone to the chiropractor. Under my accident policy I have six chiropractic visits available for an accident with a payout of $35 a visit. This almost covers the cost of my chiropractic visit. These plans work by placing a specific dollar amount on specific accidental event. Let’s take an example: A broken leg requiring a visit to the Emergency Room, crutches, cast, and physical therapy. Here are the potential payouts: ER Visit $120, X-rays $25 per accident per person, follow-up treatment $35 per day per accident. The fracture itself would allow a payout of anywhere from $25 to $2,500 depending on the severity. Physical therapy would be $35 per visit per accident, and finally crutches (appliance) would be $125. These benefits are paid out to the policyholder and the funds can be used for anything. If you need gas for the car, groceries, an electric bill paid, or if you want to put the money toward deductibles of your health plan. It is up to the policyholder on how to use the money.
In the supplemental market, carriers typically require at least three separate employees to purchase one policy each, making it three policies under the group-(employer)sponsored plan. One individual cannot purchase all three. If interested, let us know. Health Insurance Advisor would be happy to explain the plans and their value to your employees. Next month look for details on cancer policies and critical illness benefits.
