California’s settlement with UnumProvident, which changes the way in which disability policies are handled in the state, also could make coverage more expensive and difficult to find, said Karen Ignagni, president and CEO of America’s Health Insurance Plans.
“California’s disability insurers now have a new standard, one that will provide a better sense of security for policyholders, which is what disability insurance is really all about,” said California Insurance Commissioner John Garamendi.
But Ignagni noted that the deal also could have negative consequences for employers and individuals, who will likely be facing increased premiums as claims costs rise and coverage becomes more difficult to find.
“It’s a classic regulatory conundrum,” she said. “Regulators seek to protect their constituents, but the results may increase costs significantly and make it more difficult for employers and individuals to get disability coverage.”
Ignagni noted that the settlement agreement may run counter to the goals of some claimants themselves. “It appears to do an about-face on return-to-work efforts” undertaken by disability advocates, she said, possibly undermining “a great deal of work in the last two decades.”