Today’s workers are being asked to pay more benefit costs themselves, review more benefit choices and make more critical benefit decisions. Often, they must make these decisions within limited open enrollment periods and without effective education and communication.
To probe the impact of these developments, Prudential Insurance Company undertook a study covering a broad range of employee benefits issues.
The “Study of Employee Benefits: 2007 & Beyond” was based on responses from a national sample of 1,400 employee benefits decision-makers and 1,028 employees. It focused on 5 major themes including employees’ concerns, uncertainty and resulting inaction on the role of disability insurance for income replacement.
One important finding of the study was that employees are often confused about the availability of disability insurance and allocate little time to considering it.
While U.S. workers do not generally express strong interest in DI, they do worry about the financial impact if a wage earner in the household were not able to work. In fact, 60% of employee respondents ranked “financial security if a wage earner can no longer work due to disability or a serious illness” as important.
Only 21% of employees in the study felt their companies are addressing these concerns–despite the fact that more than two-thirds of all employers offer short-term or long-term disability benefits.
Apparently, employees simply do not make the connection between the likelihood of an injury or illness forcing them out of work, their desire for income replacement and the availability of group DI.
Prudential’s study found 4 other major themes revealing factors that contribute to the gap in understanding disability insurance. Each of these themes can provide context or direction as you seek to encourage employees to participate in voluntary DI programs. For example, the study found the following:
1. Plan sponsors struggle to reduce benefit costs while offering competitive benefits. To contain costs and still deliver the range of benefits needed to recruit and retain skilled employees, including DI, more plan providers are shifting increased benefits costs and financial responsibility to employees.
This strategy is most successful when employees receive effective benefits education and communications. Based on survey responses, the need for improved education and communications will grow 20% by 2012.