According to an annual survey from the Canadian Payroll Association, 44% of Canadians would not be able to meet their financial obligations if their paycheque was delayed by even a single week. One insurer reports that 48% of Canadians have disability coverage through their workplace benefits. However, of the remaining 52%, the majority have no disability coverage at all.
These individuals choose not to buy coverage for many reasons:
- They don’t see the value.
- They have other financial obligations or expenses.
- They can’t afford coverage.
- They think they don’t need it.
Statistics Canada reports that about one in five individuals has some form of disability. However, neither workers’ compensation nor disability benefits will cover many of the situations these individuals will face. Workers’ compensation covers only work-related injuries, and government disability benefits are approved under stringent requirements.
Why offer disability coverage?
Disability insurance provides increased financial security. It helps bridge the gap between paid time off and the time when an employee would have to use their savings to pay for everyday expenses like rent, food and utilities.
A medical exam is not usually required to purchase group disability insurance. So, more employees may qualify for coverage than if they tried to purchase individual coverage. Premium rates may be lower as well, since the group helps offset the risk.
For employers, working with a disability vendor can simplify leave management. You receive the assistance you need to manage the plan and avoid discriminatory lawsuits and fines for noncompliance with federal and provincial regulations.
You may also get support in managing a return-to-work program. This can help your organization and employees focus on getting people back to work rather than the potentially traumatic experience from which they are recovering.
Offering individual disability for young executives, partners and business owners
Individual disability policies are available to cover:
- The buyout of a disabled partner
- Continued contributions to a disabled partner’s retirement plan
Without these policies in place, you may be expected to pay out of pocket to buy out the partner who has become disabled.
If you are interested in learning more about these policies, we can help you understand who may be considered under an individual policy.
What are my administrative options?
You may choose to manage your disability plan in-house. Or, you may want to outsource the administration. Disability vendors can package leave administration with group long-term disability plans. They may incorporate:
- Short-term disability
- Compliance with provincial laws that require either paid or unpaid leave in certain situations
- Family and medical leaves
- Reasonable accommodation requests
Your third-party administrator (TPA) may also be able to handle plan administration and work directly with your disability vendor.
Choose modern technology
Many payroll and human resources information systems (HRIS) vendors now offer leave management. This eliminates the problem of multiple systems tracking multiple data points. Electronic data feeds are sent directly to your disability vendor.
Some companies even offer:
- Application programming interface (API) to make exchanging data even easier
- Artificial intelligence (AI) to evaluate claims, coach a customer service representative during a call and walk individuals through filing claims online.
For more information
If you have questions about how disability insurance can benefit your employees and what to look for in a plan administrator, contact us. We can design a disability program that protects your employees’ income and minimizes your administrative burden.
