Disability coverage is income insurance that most people think they’ll never need. But in reality, one in four American 20-year-olds will face disability before they retire. Not having disability insurance puts a worker and his family at risk when an unexpected injury or illness, such as cancer, strikes.
This is one reason a handful of states – including New York – have mandated disability coverage. If you employ full or part-time workers in New York, you must carry statutory disability insurance.
There are many myths about mandated disability coverage. Let’s consider the top five:
#1: Workers’ compensation replaces wages no matter how employees become disabled.
Fact: Workers’ compensation insurance provides partial wage replacement only to workers who are injured while on the job. It’s a fact that 95% of accidents and illnesses are not work-related.
#2: Employers can’t buy workers’ compensation and disability coverage together.
Fact: Packaging workers’ compensation and disability insurance together allows agents to offer customers the convenience of 24/7 coverage: workers’ comp coverage for on the job injuries and disability coverage for off-the-job accidents, illnesses and pregnancy. By logging onto AmTrust Online, agents can write Disability Benefits Law (DBL) coverage on an existing Workers’ Comp policy with just a few clicks. Claim times are shorter on controverted workers' comp claims, with prompter payments, when a single carrier issues both policies.
#3: Disability coverage pays medical costs.
Fact: Disabilities coverage replaces a portion of lost wages so that insured can pay their bills while they are unable to work. It does not cover medical costs.
#4: Mandated disability insurance is enough for most employees to survive on.
Fact: New York businesses are required to cover full-time and part-time employees with mandated disability benefits under the Disability Benefits Law, but that coverage only replaces a percentage of salary up to $170 per week in wages. Few of us could survive on that. That’s why it’s critical to consider adding additional wage replacement benefits in the form of enriched coverage – such as the DBL Deluxe™ coverage offered by AmTrust North America.
#5: Employers can buy any group short-term disability plan to comply with the law.
Fact: Many large corporations misunderstand compliance requirements with the New York Disability Benefits Law and try to cover all employees across the country with a typical insured group short-term disability (STD) plan. Often group STD plans don’t meet state requirements and the company is found noncompliant. It pays to buy from a carrier with compliant DBL coverage.
Taking care of business
As the old saying goes, when you take care of your employees, they will take care of you. And that’s good for business.