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Making Your Voluntary Benefits Program a Success

by Inoventive Solutions
April 18, 2023

Both employers and employees have much to gain from a solid voluntary benefits program. 

For employees, being able to enroll in an insurance product through a workplace voluntary benefits program offers them the advantage of group pricing, the convenience of paying through payroll deduction, and perhaps access to insurance that would be difficult to get on an individual basis.

For employers, offering a range of voluntary insurance products can help increase employee satisfaction – along with loyalty and morale – and make the business more competitive in attracting and retaining the best talent.

These advantages alone, however, do not ensure that a voluntary benefits program will be a success. Careful planning, including the selection of benefits to offer, choice of vendors and well-crafted communications, are keys to program success. Consider the following:

Get the right mix – Bring in the kinds of benefits that employees want and will enroll in. Survey employees as to what types of additional benefits they would participate in if given the opportunity. Depending on your employee demographics, these could include additional life insurance options, long-term care – or even pet insurance.

Voluntary benefits enable employees to self-customize an individual benefits package that is uniquely appropriate to them.

Look for gaps – Look for gaps in your company’s current benefits coverage, and consider how voluntary benefits plans can be used to fill them. 

For companies that have had to scale back on their regular benefits package, voluntary benefits can be particularly helpful. If your benefits budget is tight and, for example, needs to be dedicated to helping fund medical benefits, offering dental and vision on a voluntary basis gives employees easy and affordable access to these benefits.

Get the word out – While we can often supply some communications materials, your internal communications concerning the program will help to incorporate it into your overall benefits program in the eyes of employees, making it more likely they will enroll. 

Consider announcing new voluntary benefits offerings in a communication from top management, which will demonstrate the company’s commitment to the program.

Make voluntary benefits enrollment a part of your annual enrollment process, and incorporate descriptions and information on voluntary benefits offerings into the communications materials for your core plans.

Work closely with us – We are here to help you make a selection that best fits your company’s needs, and to help you communicate with your employees and enhance enrollment.

This will be particularly important if any of the voluntary benefits have minimum participation requirements. We can come in for presentations, individual meetings or enrollment sessions, all of which can be very effective in increasing participation in these programs.

The takeaway

Voluntary benefits can be a great add-on to any company’s benefits program. Careful planning and consideration of the various issues that can affect participation can increase the chances of program success.

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Insurers Make Changes to Prior Approvals Ahead of Rulemaking

by Inoventive Solutions
April 11, 2023

After the Centers for Medicare and Medicaid Services proposed new rules aimed at streamlining the prior approval process for most health plans in the U.S., a number of the country’s largest insurers announced their own steps to improve the process.

UnitedHealthcare announced in late March that it would cut the use of prior authorizations by 20% for some non-urgent surgeries and procedures. Starting in the third quarter of 2023, the insurer will remove many procedures and medical devices from its list of services that require prior approval, and continue through the rest of the year for most commercial, Medicare Advantage and Medicaid plans.

Meanwhile, insurance giant Cigna said it has been in the process of reducing the prior authorization for about 500 services and devices. And Aetna is working to automate and simplify prior authorizations.

Market experts expect other insurers to follow suit as frustration over the long wait times and horror stories of patients dying while waiting for approval mount. The bad press and resulting lawsuits, in conjunction with the new rule making is likely to prompt more health insurers to revamp their prior authorization procedures.

The proposed rule

The rule is aimed at tackling one of the biggest headaches for patients and practitioners alike. Waiting for prior authorizations for care, pharmaceuticals or medical devices can lead to delays in care and increased risk of hospitalization from those delays.

The goal of the proposed rule, which would take effect in 2026, is to reduce the bureaucracy around prior authorizations and cut wait times for responses that some providers say sometimes take weeks to get approved.

The specifics of the rule are as follows:

  • Insurers would be required to render a decision within seven days after a request for a non-urgent service or item (compared to the current 14 days).
  • If the requested care or item is urgent, the insurer must render a decision within 72 hours.
  • If the insurer denies the request, it must include a specific reason for doing so.
  • Most group and individual health plans, Medicare Advantage, Medicaid managed care and state Medicaid agencies would be required to build and maintain a system for electronically approving prior authorizations, known as a “fast health care interoperability resources application programming interface.”
  • The interface must be able to ascertain whether a prior authorization request is required and “facilitate the exchange of prior authorization requests and decisions” from the provider’s electronic health records or practice management system.
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Judge Deals Blow to Preventative Care Coverage under ACA

by Inoventive Solutions
April 4, 2023

A recent decision by a federal judge in Texas to issue an injunction on a pivotal part of the Affordable Care Act requiring insurers to offer certain types of free preventative care, has raised concerns that some health plans will stop paying for these services.

However, since most employer-sponsored plans are on annual contracts, the decision is unlikely to affect policies in 2023, but beyond that, it’s uncertain how things will play out. The Biden administration has appealed and called for a hold on the ruling until the decision is settled by higher courts.

If the ruling by Judge Reed O’Connor of the Federal District Court for the Northern District of Texas sticks, it would roll back the health insurance market to the days prior to the ACA when health insurers decided which preventative care services they would cover with no cost-sharing.

The ACA changed all that, requiring insurers to pay for preventative services, such as: 

  • Cancer screenings, like breast cancer screenings and colonoscopies 
  • HIV screenings
  • Diabetes screenings
  • Heart disease screenings
  • Pap smears
  • Depression screenings
  • Statins
  • Immunizations and PrEP for HIV and HPV.

Judge O’Connor in 2018 issued a decision striking down the entire ACA, which was later reversed by the U.S. Supreme Court. 

The most recent ruling is really two decisions: 

  • That a panel of volunteer experts that issues binding recommendations on what preventative care must be covered under the ACA violated the Constitution because its members are not appointed by the president or confirmed by the Senate.
  • That the ACA requirement that insurers must cover PrEP and HPV vaccines as well as certain HIV/Aids-prevention drugs violates the religious beliefs of Christians, which in turn violates the Religious Restoration Freedom Act.

The fallout

The consequences of the ruling are unlikely to be felt immediately, particularly for group health plans, the annual contracts of which include coverage for preventative services. 

Matt Eyles, president and CEO of the trade association America’s Health Insurance Plans, issued a statement saying that: “As we review the decision and its potential impact with regard to the preventive services recommended by the United States Preventive Services Task Force, we want to be clear: Americans should have peace of mind there will be no immediate disruption in care or coverage.

“We fully expect that this matter will continue on appeal, and we await the federal government’s next steps in the litigation, as well as any guidance from relevant federal agencies.”

That said, if the Biden administration fails in convincing higher courts to put a hold on the injunction while the appeal of the decision plays out, changes could come over time. 

In this continuing tight job market, many employers would likely be reluctant to roll back these preventative services in their health plans. And if insurers plan to make changes to their plans’ benefits, they are required to give advance notice. 

Other pundits have said that the preventative care provisions of the ACA have become so ingrained in the health care system that employers and insurers would have a hard time rolling these benefits back, and many may not consider it.

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Moves Afoot to Improve Prior Authorization Times, Efficiency

by Inoventive Solutions
March 28, 2023

The Centers for Medicare and Medicaid Services has proposed new rules aimed at streamlining the prior approval process for most health plans in the U.S.

Under the proposal, starting in 2026, insurers would be required to render a decision within seven days for a non-urgent service or item (compared to the current 14 days), and 72 hours if it is urgent.

It would also require most group and individual health plans, Medicare Advantage, Medicaid managed care and state Medicaid agencies to implement electronic prior authorization systems by 2026 and streamline their processes for approving care.

The rule is aimed at tackling one of the biggest headaches for patients and practitioners alike. Prior authorization can sometimes take time to receive, often delaying much-needed care. Waiting for approval can have serious consequences, with studies finding:

  • It often leads to delays in care for serious conditions like cancer.
  • It often leads to more people being hospitalized as their condition worsens as they wait for care or medicine to be approved.

Prior authorization rules can also be confusing, time-consuming and frustrating for both patients and doctors, with the latter often feeling as if the insurer is questioning their expertise.

Insurers use prior authorization as a cost-containment tool that requires providers to seek approval from them before referring a patient for certain services and prescribing some medications. Studies have found that the number of prior authorization requests has exploded in the last few years, straining the system and delaying care.

The proposed rule

The goal of the rule is to reduce the bureaucracy around prior authorizations and cut wait times for responses that some providers say sometimes take weeks to get approved.

The proposed rule — a revised version of a similar one floated by the Trump administration that was withdrawn due to cost concerns — applies to all Affordable Care Act-qualified health plans, Medicare Advantage plans and state Medicaid programs.

As mentioned above, the time insurers have to approve a prior authorization request would be reduced to seven days, and 72 hours if it is urgent. Additionally, if the insurer denies the request, it would be required to include a specific reason for doing so.

Under the proposed rule, insurers will be required to build and maintain a system for electronically approving prior authorizations, known as a fast healthcare interoperability resources application programming interface (FHIR API).  

The FHIR API must be able to ascertain whether a prior authorization request is required and “facilitate the exchange of prior authorization requests and decisions” from the provider’s electronic health records or practice management system.

Some doctor’s groups have said the new rule doesn’t go far enough and that seven days is still too long.

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Wellness Programs Grow in Wake of Pandemic

by Inoventive Solutions
March 21, 2023

Employers have often long struggled to boost participation in their wellness programs, but the COVID-19 pandemic changed that as people started looking for ways to better care for themselves both physically and emotionally.

The pandemic added fuel to the country’s mental health crisis and more people than ever are seeking out counseling to cope with the stresses of life.

Others stopped taking care of their overall health, by exercising less and drinking too much and putting off regular checkups, leaving them worse off health-wise than they were before the pandemic.

Wellness programs can bridge the gap between employees’ overall health and your group health insurance. While the latter covers their medical and pharmaceutical needs, these programs can help them maintain healthy lifestyles, and can also help them better deal with stressors in their lives.

On top of that, they can improve employee satisfaction and boost their productivity.

The benefits to your organization

A five-year study by Go365, a personalized wellness and rewards program, found that highly engaged participants:

  • Paid an average of $116 less in health care than low-engaged members.
  • Compared with low-engaged members, reported 55% fewer “unhealthy days,” which can be an indicator of reduced productivity, absenteeism or presenteeism.
  • Had an average of 35% fewer emergency room visits and 30% fewer hospital admissions than low-engaged members.

Wellness programs continue growing in number and you may want to put together a list and survey your employees about which of the programs they would most like to see. Some are more expensive than others, and some costs are negligible.

These programs typically aim to promote mental and physical health and fitness, and run the gamut. Some of the most common wellness programs include:

  • Gym memberships,
  • Smoking cessation programs,
  • Diabetes management programs,
  • Weight loss programs, and preventative health screenings,
  • Stress management,
  • Parent coaching and support,
  • Recreational programs such as company-sponsored sports teams,
  • Nutritional and food guidance programs, and
  • Financial security programs, which can include access to budgeting resources, debt management tools, student loan counseling, emergency savings plans, and more.

You can also provide incentives such as premium discounts and cash rewards for participating in a program or achieving certain health goals, like for weight loss or stopping smoking.

Getting it started

Since the pandemic started, more employers have started offering virtual wellness sessions for their employees, while those with existing programs have bolstered them with new ones, such as financial wellness.

But to succeed, the programs need adequate levels of management and employee buy-in. Make sure you are choosing programs your employees actually want and will use. Don’t waste time and energy on wellness initiatives that they don’t find engaging or beneficial.

Instead, survey your staff to find out which wellness plans they find the most appealing.

Also, it’s important to stick to your budget and not to overpromise what you can deliver to your employees. Be realistic as you explore your choices.

The expense can be worth it if it’s tailored correctly. Employees who are healthy and happy have higher levels of productivity than those who are not. Wellness programs also lead to increased engagement, improved morale and retention, and reduced health risks.

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Employers ‘Unwavering’ in Providing Group Health Benefits: Research

by Inoventive Solutions
March 14, 2023

Large employers are unwavering in their plans to continue offering group health plans to their workers instead of funding individual reimbursement accounts that would allow them to shop for plans on government-run exchanges, according to new research.

The poll of 26 health benefits decision-makers at large firms, carried out by The Commonwealth Fund and the Employee Benefits Research Institute (EBRI), found that despite rising premium and health care costs, they felt obligated to offer health insurance instead of shunting employees to exchanges.

Employers since 2019 have been allowed to fund individual coverage health reimbursement accounts (ICHRAs) with pre-tax dollars for their employees to satisfy the Affordable Care Act’s employer mandate. Workers are required to use their ICHRA funds to purchase a plan on healthcare.gov or a state-run health insurance exchange.

However, large employers feel they can do a better job at providing their workers with coverage, according to the report.

“Most interviewees expressed a strong skepticism that their firms would drop health benefits or direct their workers toward marketplace exchanges,” said Jake Spiegel, research associate of health and wealth benefits research at EBRI. “Broadly, companies continue to view their health benefits as a recruitment and retention tool and cutting these benefits would hamper their efforts to cultivate a strong workforce.”

The health benefits decision-makers at large firms told researchers that jettisoning their group health insurance benefits would make it more difficult to attract and retain talent. They said there were other benefits to providing group health coverage to their workers, including:

  • They felt they could offer their workers a better deal than what was available to them on public exchanges. “We liked to have control. We can do a better job with design than the exchanges.” — Health care company benefits executive
  • They felt they simplified health insurance for their employees, who would possibly feel overwhelmed by all the choices on public exchanges. “We don’t want [workers] out shopping on their own, [exchange plans] aren’t easy to understand.” — Benefits executive at a financial services company
  • They viewed their companies as paternalist, meaning they have a responsibility to also help their workers make better health insurance decisions. “It would make workers feel like you were cutting and running.” — Benefits executive at a manufacturing firm
  • They didn’t want to be the first to jump out and completely disrupt their group health benefits offerings. “A big part was trepidation. Nobody wanted to be first.” — Benefits executive at an insurance company

Some of the interviewees said that funding ICHRAs and sending their workers to ACA exchanges would rob the company of the opportunity to help workers manage expensive health conditions.

For example, under IRS rules, employers may cover some drugs and services on a pre-deductible basis for workers who are enrolled in high-deductible health plans with attached health savings accounts.

But likely the biggest reason for not taking the ICHRA leap is the effect on employee satisfaction. Executives told the researchers that their workers expect them to provide a “suitable menu of health benefits options” and that they trust that their employer has shopped around for the best deal that doesn’t reduce quality.

Additionally, they felt that their workers would not be happy about being shunted to an exchange and having to take it on themselves to sift through the myriad of plans available to them at different cost and benefit structures.

“[Employees] don’t really take the time or energy to really understand, and they don’t want to. They trust us to make the decision for them,” one benefits executive told the researchers.

The takeaway

While this survey was only of large employers, market indications are that most mid-sized and smaller firms have also been sticking to providing their employees with health insurance coverage.

Offering a comprehensive group health plan is still the best way to retain and attract talent while satisfying the employer mandate under the ACA. Even for employers not subject to the mandate, to be competitive in the job market, offering health insurance is still a priority.

Finally, treading into ICHRA territory requires foresight and planning and companies have to prepare for possible blowback if the employees don’t like the exchange experience or can’t get the same coverage at the same out-of-pocket cost to them as they did before.

Doing it incorrectly, such as not funding the accounts with enough money, could open your organization up to fines.

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Bill Would Pave Way for Stand-Alone Telehealth Coverage

by Inoventive Solutions
March 7, 2023

A bipartisan group of House legislators in February reintroduced legislation from 2022 that would pave the way for employer-sponsored, stand-alone telehealth benefits plans.

The bill is important as the current law allowing health insurers to cover telehealth benefits sunsets at the end of 2024, which would be difficult for many patients and providers who have grown accustomed to telehealth visits with their physicians.

The legislation, however, takes a different approach by instead making telehealth benefits separate from a health plan.

A similar measure died in committee last year due to congressional inertia during an election year. The current legislation has bipartisan support with sponsorship by Rep. Angie Craig, D-Minnesota, Rep. Ron Estes, R-Kansas, Rep. Mikie Sherrill, D-New Jersey, and Rep. Rick Allen, R-Georgia.

The bill

The goal of the Telehealth Benefit Expansion for Workers Act would be to make stand-alone telehealth benefits separate, and not a replacement for a group health plan. Instead, employers would be able to offer them under a group health plan or group health insurance coverage as excepted benefits.

Excepted benefits are additional coverages that employers can, but are not required to, offer, like vision or dental insurance. Federal law dictates what qualifies as an excepted benefit, which necessitates the legislation to add telehealth services to the mix.

Telehealth benefits, under the legislation, would apply to all workers, even those who work part-time or seasonally.

Why is the legislation needed?

Prior to the COVID-19 pandemic, health plans were unable to cover telehealth services under the law. But, when the outbreak first started, followed by lockdowns, telemedicine was sometimes the only option patients had to get face time with their physicians.

As a result, lawmakers enacted laws that allow health plans to cover patients’ video and phone visits with their doctors. Those laws were set to sunset 151 days after the COVID-19 public health emergency expires.

But the budget bill signed into law at the end of 2022 extends and expands telehealth flexibilities under the law through Dec. 31, 2024. Those flexibilities include:

  • Expanding originating sites to include any sites where patients are located, including their homes.
  • Extending coverage and payment for audio-only telehealth services.

What’s next

This measure has only just been introduced, but since it was crafted by Democrats and Republicans, and considering the eventual sunsetting of telehealth provisions, there is some urgency in getting permanent legislation on the books.

However, as telemedicine grows in use and popularity, elected representatives may feel pressured to make permanent the current law that allows health plans to cover video and telephone visits with their physicians.

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Most Employees Spend Little Time Choosing Their Health Plan

by Inoventive Solutions
February 28, 2023

A new study has found that individuals enrolled in high-deductible health plans (HDHPs) are more engaged than their traditional plan counterparts during open enrollment, spending more time on choosing plans and using employer-provided tools to help them make their choices.

Despite their higher engagement though, overall, 72% of group health plan enrollees spent less than an hour on their plan during last year’s open enrollment, according to the “2023 Consumer Engagement in Health Care Survey” by the Employee Benefits Research Institute and Greenwald Research.

Additionally, one in five didn’t spend any time researching or tending to their health plan and were just automatically re-enrolled.

The study’s authors said there are likely a few reasons U.S. workers are not spending a significant amount of time researching health plans during open enrollment, including:

Satisfaction with their plan — The study found that 90% of employees were satisfied or somewhat satisfied with their employer’s open enrollment process. As mentioned, 20% of participants auto-renewed, indicating they are likely satisfied with their plan.

More choices — Employees that have more plans to choose from may find the process of comparing and contrasting plans overwhelming.

Too many obligations — Many employees likely want to spend more time researching plans, but everyday work, family, social and community obligations can get in the way.

HDHP enrollees more engaged

HDHP enrollees on most metrics were more involved in plan selection and research during open enrollment than their traditional plan counterparts.

For example, 29% of HDHP enrollees spent more than an hour researching plans during open enrollment, compared to 23% of those enrolled in traditional plans.

HDHP enrollees were also more likely to have three or more choices of health plans than their traditional plan counterparts. In fact, while 29% of HDHP enrollees had a choice of three plans, only 17% of traditional plan enrollees had three choices. Meanwhile, 36% of those in traditional plans had only one choice, compared to 29% of those in HDHPs

They were also more likely to use employer-provided tools to choose a plan:

  • Annual employee benefits guide from employer: 58% of HDHP enrollees used it, compared to 38% of traditional plan enrollees.
  • Employee benefits online portal: 41% HDHP, 29% traditional plan
  • Online research: 23% HDHP, 32% traditional plan.
  • Employer-provided educational videos: 25% HDHP, 24% traditional plan
  • HR/benefits department consultations: 13 HDHP, 14% traditional plan
  • Insurance carrier/provider website: 11% HDHP, 16% traditional plan

One of the driving factors for plan choice among high-deductible health plan recipients was whether the plan covered preventative care for chronic conditions, pre-deductible.

Nearly one-half (45%) reported that pre-deductible coverage of preventive care for chronic conditions affected their decision to select the HDHP to a great extent. Another 25% reported that it impacted their decision to a minor extent.

Additionally, 25% of traditional plan enrollees said they would be extremely or very likely to select an HDHP if it covered preventative care for chronic conditions before they reach their deductible. Another 39% reported being somewhat likely to select an HDHP if such care were covered pre-deductible.

Despite these numbers, the percentage of workers enrolled in HDHPs has ebbed since 2020, when 34% of U.S. workers were enrolled in them. In 2022, 32% were.

The takeaway

With so few employees spending more than an hour researching plans during open enrollment, some of your workers may be choosing the wrong coverage for their life circumstances.

While open enrollment only happens during the last few months of the year, you can still provide educational resources to your staff during the rest of the year to educate them on their plan choices and how to choose the best one for their life situation.

You can also encourage them to use the resources you and we provide them to help make educated decisions about their coverage.

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Virtual-First Health Care Plans Flooding the Market

by Inoventive Solutions
February 21, 2023

In the continuing quest to reduce health care costs and make care more accessible, a new type of health plan has been taking shape: The virtual-first health plan.

These rapidly evolving plans integrate virtual care delivery models into a comprehensive health plan that encourages enrollees to access virtual care with their doctors before resorting to an in-person visit.

These plans are coming to market as Americans have gotten use to virtual visits with their doctors during the last three years of the COVID-19 pandemic and virtual care becomes more common even in traditional health plans.

While the uptake is still quite small — 6% of employers surveyed in 2022 offered these plans — it’s expected to grow quickly over the next few years.

All of the major health insurers in the U.S. have already announced various tie-ups with virtual care providers and tech vendors to improve their telemedicine offerings, and the uptake will continue growing as employers and their workers grow more comfortable with the plans.

A recent survey by Mercer found that, among organizations with 500 or more employees:

  • 52% plan to offer virtual behavioral health care in 2023.
  • 40% plan to offer a virtual primary care physician network or service in 2023.
  • 21% already offer virtual specialty care, like for dermatology, diabetes or musculoskeletal issues.

There are a number of benefits to virtual-first primary care:

  • Easier access — Virtual care is ideal for people with health problems that make it difficult to see their doctor or who do not live near a hospital or doctor’s office.
  • Reduced costs — Telemedicine visits cost less than in-person visits, and they can yield additional savings through technological efficiencies.
  • Convenience — Enrollees don’t have to drive to the doctor’s office, contend with traffic or sit in the waiting room — and they can meet with their doctor from the comfort of their home.
  • Better health outcomes — Virtual first plans will often put a premium on health records integration across the care spectrum to ensure that care team members have access to them, which can help them provide better clinical and administrative support.

How they work

Virtual-first health plans include the same coverage as traditional health plans, including fee-for-service, health maintenance organizations and preferred provider organizations, but they focus on directing enrollees to telemedicine options for their doctor’s visits.

The key difference is that they aim to significantly reduce costs by incentivizing enrollees to seek out virtual care first through plan design, incentives and advocacy. Consultation sessions can often be performed virtually, saving both the patient and doctor time, while reducing the costs for each visit.

Virtual-first plans incorporate the same arrangements as traditional health plans, except that most doctor’s visits will be online, or via a smartphone app. When a patient needs to see their doctor, they’ll schedule the visit on their account — and they’ll need to opt out of a virtual visit if they feel that they need to see the doctor in person.

Additionally, if possible, specialist visits can also be conducted on the app or website.

The takeaway

Virtual-first care plans are an evolving product and it’s important to find a plan that can truly save you money while not sacrificing quality of care.

These plans are still in their infancy and are hitting the market in increasing numbers. But because they are new, there is no uniform standard for them. The most important aspects to look for in these plans are strong member engagement and seamless integration to ensure quality of care.

Give us a call if you’re curious about these plans, to find out if carriers in the area are offering them and, importantly, whether they are a good fit for your organization.

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Why Your Staff Needs Short- and Long-Term Disability Coverage

by Inoventive Solutions
February 14, 2023

No one plans on becoming disabled and missing work, but it can happen. An illness or an accident could cause one of your employees to be unable to work for months, or even years.

While their health insurance will cover their medical expenses, it won’t cover the cost of living while they recover.

Only 30% of American workers in private industry currently have access to employer-sponsored long-term disability insurance coverage, according to the U.S. Bureau of Labor Statistics.

That means most workers — and their families — do not have adequate protection against one of the most significant financial risks that they face.

That’s why you should be offering your employees voluntary short-term and long-term disability insurance.

These policies provide income replacement to enable employees who are disabled to pay bills, including mortgages and college expenses, and to maintain an accustomed standard of living.

Disability insurance replaces a percentage of pre-disability income if an employee is unable to work due to illness or injury.

Employers may offer short-term disability coverage, long-term disability coverage, or integrate both short- and long-term coverage. Here’s what they cover:

  • Short-term disability policies: These policies have a waiting period of zero to 14 days, with a maximum benefit period of no longer than two years.
  • Long-term disability policies: These policies have a waiting period of several weeks to several months, with a maximum benefit period ranging from a few years to the rest of your life.

Disability policies have two different protection features that are important to understand:

Non-cancelable – This means the policy cannot be canceled by the insurance company, except for non-payment of premiums. This gives your employees the right to renew the policy every year without an increase in the premium or a reduction in benefits.

Guaranteed renewable – This gives your employees the right to renew the policy with the same benefits and not have the policy canceled by the company. However, the insurer has the right to increase the premiums as long as it does so for all other policyholders in the same rating class as your employee.

Other options

In addition to the traditional disability policies, there are several options that you can also offer as part of the voluntary benefit package:

  • Additional purchase options: The insurer gives your employees the right to buy additional insurance at a later time.
  • Coordination of benefits: The amount of benefits your employees receive from the insurance company is dependent on other benefits they may receive because of their disability. The policy specifies a target amount they will receive from all the policies combined, so this policy will make up the difference not paid by other policies.
  • Cost of living adjustment (COLA): The COLA increases disability benefits over time based on the increased cost of living measured by the Consumer Price Index. Your employees will pay a higher premium if they select the COLA.
  • Residual or partial disability rider: This provision allows your employees to return to work part-time, collect part of their salary and receive a partial disability payment if they are still partially disabled.
  • Return of premium: This provision requires the insurer to refund part of the premium if no claims are made for a specific period of time declared in the policy.
  • Waiver of premium provision: This clause means that your employees do not have to pay premiums on the policy after they are disabled for 90 days.
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