Disability Insurance Trends in 2021
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MGIS Discusses Four Reasons Disability Insurance Is Top of Mind This Year
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SALT LAKE CITY, March 18, 2021 /PRNewswire/ -- The COVID-19 pandemic has shed new light on the importance of disability insurance, an employee benefit that often flies under the radar. Jeff Brunken, a disability industry veteran and president of leading national insurance program manager MGIS, believes disability insurance will have more of a moment in 2021.
"The possibility of becoming disabled and unable to work is not top of mind for most people. They usually think of disability as something resulting from an accident," Brunken explained. "However, more people become disabled due to illness than to accidents. COVID-19 has brought attention to the fact that people can get sick and miss work for several weeks or months. The lost income that results, if not protected by disability insurance, can take a toll on their lives in addition to the illness."
As the importance of disability insurance achieves new levels of awareness among American workers, here are Brunken's industry predictions for the year ahead.
- Disability insurance will be an important part of the conversations that brokers and benefits advisers have with their clients this year. COVID-19 might have brought more attention to disability insurance, but the need exists for this benefit even when there is not a pandemic. A study by the Social Security Administration found that one in four people could expect to miss at least one year of work due to disability before reaching the typical retirement age. As brokers discuss benefits with their clients this year, disability benefits will likely be a bigger part of the conversation. Brokers need to emphasize quality group disability plans early and often.
- More employers will add or update long-term disability benefits. While most COVID-19 patients have been shown to suffer for just a few weeks, there are some who have become quite ill, spend weeks or months in the hospital, and suffer longer-term or lingering effects. These patients qualify for normal group LTD benefits after 90 or 180 days. Currently, no U.S. laws require employers to provide LTD coverage. Most employers do offer some short-term sick leave or disability policy, and just about half of all companies offer long-term coverage. LTD coverage is an important employee benefit that will likely be emphasized more by brokers in 2021 due to the impacts of the pandemic in 2020.
- There will be more interest in LTD coverage for stress-related disabilities. The pandemic has drawn attention to how LTD policies deal with stress-related disability, especially with healthcare workers. Virtually all LTD policies limit the duration of nervous/mental claims, usually to a maximum of 24 months for the claimant's lifetime. A more COVID-useful LTD policy would not use this "lifetime max." To be most helpful to their healthcare clients in 2021, brokers must understand the mental health problems or stress-induced diagnoses that various disability insurance carriers might cover.
- A priority for brokers with healthcare clients will be ensuring that their income- protecting disability policies are up to date. Perhaps no one has felt more pandemic-related pressure than healthcare professionals. In addition to ensuring that healthcare clients have adequate disability coverage for any type of stress or mental health claim related to COVID-19, brokers should make sure those policies provide "own occupation" coverage that pays benefits based on the CPT or CDT codes for the procedures they perform. Without this narrow protection, healthcare professionals may be at risk for having their benefits denied or reduced at claim time.
Brunken thinks this year will be a pivotal one for the disability insurance industry. "Disability insurance shouldn't be a 'set it and forget it' matter. It's crucial to assess coverage periodically anyway, but it's even more important now that the pandemic has brought attention to the need to take another look at disability policies," he says. "Armed with the right disability insurance options, brokers can help our healthcare heroes on the front lines enjoy the protection they really need." Brunken further predicts that once the pandemic slows, there will be increased focus on disability insurance and other high-quality benefits for healthcare professionals for recruitment and retention because of the ongoing physician shortage.
About MGIS MGIS is a leading national insurance program manager that builds and manages specialized insurance programs for healthcare professionals. MGIS partners with the highest-rated insurers to focus on group disability and life for medical practices of all sizes, types, and specialties. For more information, visit www.mgis.com.
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