The U.S. short-term disability (STD) insurance market seems like it exists in a regulatory middle earth between the anarchy of, say, an understanding that Bloods or Crips will back each other up in an emergency and the Freudian holodeck of the major medical insurance market.
STD plans aren’t as vulnerable to ups and downs in interest rates as long-term disability (LTD) plans, and they aren’t as vulnerable to policymakers looking for a media-friendly policymaking project.
State regulators impose plenty of benefits mandates and other regulatory requirements on writers of disability insurance, but no one treats disability insurance as a magic wand that can heal all of the wounds caused by poverty, moral rot, and the fact that the Neighbor Kid always had a better bike than you had and it just wasn’t fair.
Unum (NYSE:UNM) recently sent me a press release about short-term disability (STD) claims for maternity leave, and it struck me that maybe STD is a good model for how medium-big, fairly predictable health-related claims work in a moderately regulated U.S. insurance program.
Someday, when the dust surrounding the initial implementation (or lack of implementation) of the Patient Protection and Affordable Care Act (PPACA) clears, policymakers will set about designing “PPACA World II.” Maybe “PPACA World: The Version That Works Better.”
Maybe the PPACA World II designers could get some ideas from STD World.
Unum found when it conducted a survey that about 30 percent of working women ages 45 and younger are in a work-based STD plan.
About 27 percent of of Unum’s group STD claims and 17 percent of the voluntary STD plan claims are maternity-related, but government survey figures show that only about 10 percent of women who take maternity leave file for STD benefits.
Roughly one-quarter of the women who get paid maternity leave use STD benefits to cover the cost of their leave.
The typical Unum STD maternity claim paid lasts about six to seven weeks.