Group Disability Insurance: 5 Key Challenges for HR Professionals

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Imagine a scenario where your role includes securing sufficient disability insurance coverage for the company you’re hired with. It’s one of many tasks that make up your job description.

The challenge: The benefit broker you work with isn’t well-versed in disability insurance. The broker presents you with a Group disability offer that is cheaper than other options, but you’re not convinced. It’s widely agreed that managing Group disability insurance can often be complex for HR teams.

As an HR professional, you get it. Offering comprehensive employee benefit packages help attract and retain employees. One common aspect is Group insurance which provides income protection for employees incapacitated in some way.

What is Group Disability Insurance?

Group disability insurance is an employer-sponsored benefit that provides income replacement to employees who are unable to work due to a covered disability.

The term ”employer-sponsored" doesn't always mean employer-paid. These benefits can be offered as being “voluntary” as well.

Short-term benefits typically cover a portion of an employee's income for a specified period,

such as 13 to 26 weeks, after a short waiting period. On the other hand, long-term benefits kick

in after the STD period ends and provide income replacement for an extended duration, such

as several years or until the employee reaches retirement age.

Struggle 1: Understanding Policy Options and Coverage

Different insurance carriers offer a range of policy options, each with its own provisions, waiting periods, benefit periods, and elimination periods. Navigating through these options can be overwhelming and time-consuming for HR professionals.

Our suggestion:

To overcome this struggle, HR departments can work closely with disability insurance wholesalers or brokers who specialize in group disability insurance. These professionals can provide expert guidance, conduct policy comparisons, and help HR departments choose the most suitable coverage for their employees.

Struggle 2: Ensuring Compliance with Legal and Regulatory Requirements

Compliance with legal and regulatory requirements is a significant concern for HR departments when managing group disability insurance. These can be complex and vary from state to state.

HR professionals must stay up-to-date with these regulations to ensure that their group disability insurance plans meet the necessary compliance standards.

Our suggestion:

HR departments can partner with legal professionals or consult with disability insurance experts who have a thorough understanding of the applicable laws and regulations. Experts are equipped to guide compliance requirements, assist in drafting policy documents, and help navigate any legal complexities.

Struggle 3: Communicating Policy Details to Employees

Effectively communicating policy details to employees is extremely important and often overlooked.

Our suggestion:

Group disability insurance policies can be intricate, with various terms, conditions, and limitations. Employees need to have a clear understanding of their coverage, waiting periods, benefit amounts, and claims procedures.

Struggle 4: Managing Claims and Return-to-Work Programs

Managing disability claims and facilitating a successful return-to-work program is a significant struggle for HR departments. When an employee becomes disabled and files a claim, HR professionals must navigate the claims process, ensure timely communication with the insurance carrier, and support the employee throughout their recovery journey.

Our suggestion:

To streamline this process, HR departments can establish clear protocols and procedures for managing disability claims. This may include developing a standardized claims intake process, maintaining open lines of communication with employees and insurance carriers, and implementing a structured return-to-work program.

Struggle 5: Enrolling Employees and Maintaining Participation

Enrolling employees in group disability insurance and maintaining participation rates can be a significant challenge for HR departments. Some employees may not fully understand the value of disability insurance or may be hesitant to enroll due to perceived costs or misconceptions about their own health and well-being.

Our suggestion:

Provide the necessary education and resources for your employees to turn to.

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Wait, There’s More…

While we have discussed the top struggles faced by HR departments with group disability insurance, it's important to acknowledge that each organization may encounter additional challenges specific to their unique circumstances. Some of these challenges may include managing premium costs, coordinating disability insurance with other benefits, or addressing cultural barriers to enrollment.

The Hollowtree Way

Managing group disability insurance is a complex task that requires careful attention to policy details, compliance requirements, effective communication, and proactive claims management.

By partnering with disability insurance wholesalers, and industry experts, HR departments can streamline the management of group disability insurance and provide employees with comprehensive coverage and support. This creates a smoother and more efficient process, ultimately enhancing the overall employee experience and improving the organization's ability to attract and retain top talent.