Federal budget deficit cutters should understand that the tax deduction for employer-sponsored disability insurance is more than just another tax expenditure, a top disability insurer says.
Unum Group Corp., Chattanooga, Tenn. (NYSE:UNM), is defending the tax rules that now apply to group disability insurance by releasing results from an economic analysis made by CRA International Inc., Boston.
U.S. employers spend about $10 billion on disability insurance premiums per year to cover 40 million workers, and insurers pay group disability benefits to about 500,000 workers each year.
The coverage produces about $4.5 billion in direct savings for the government and taxpayers each year, and it produces about $590 billion in total economic welfare for the employees, or about $15,000 in welfare per covered worker, Unum says.
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The CRA analysis shows that “the workplace is the most effective avenue for access to affordable coverage,” Unum says. “These benefits provide undeniable and concrete value to the government as well as the individuals they help protect.”
Unum released the analysis at a workplace benefits and financial security conference in Washington, at the Newseum.