Why disability insurance matters to caregivers in the workplace

Benefits can be a key element of employee satisfaction. Eighty-one percent of employees said an employer’s benefits package is an important factor in whether they accept a job, and benefits, such as a healthy work-life balance, ranked second as a leading motivator for changing jobs, after salary.

As desire for work-life balance increases, so do the number of caregivers in the U.S. Americans providing unpaid care increased from 18% (43.5 million) in 2015 to 21% (53 million) in 2020. Fifty-three million Americans are caregivers, and 61% of those caregivers works a full-time job.

The time caregivers spend providing care also has increased, with almost half spending 10–29 hours of their week devoted to caregiving and 27% spending 30 hours or more providing care. So in many cases, employees who are caregivers cannot always take the time to research their employer-provided benefits and select those that can provide the most help.

The typical profile of caregiver is a 50-year-old woman who is more likely to be employed in a higher-ranking position that is more difficult to backfill in an organization. In addition, if the needs of these employees are not addressed, companies may pay billions of dollars annually in higher health benefits costs, lost productivity, legal liabilities and more.

Typical employee benefits

With the variety and breadth of benefits offered through employers, it’s no wonder valuable employee benefits can seem overwhelming and get left on the table. However, for caregiver employees, the stakes may be particularly high. Employees who are caregivers spend on average more than $7,200 a year on caregiving, so maintaining their income is particularly important, yet disability income insurance is an often overlooked but essential protection to help them maintain the necessary level of care for their loved one.

What is disability income insurance?

Disability income insurance will pay a percentage of the employee’s salary if they can’t work because of an illness or injury unrelated to their jobs and often includes the following elements:

• Short-term disability that, after a waiting period, covers illness or injury lasting six weeks to six months, sometimes with premiums paid by the employer.
• Long-term disability that begins typically once short-term disability benefits have been exhausted, if applicable. Benefits then are paid for the duration of the medical condition to the maximum duration allowed by the employer’s plan or until the employee reaches Social Security Normal Retirement Age.

Caregivers take note: help providing continuity of care

Employees who are or will be caregivers should consider the ramifications if they experience an illness or injury and must replace the care they usually provide for their loved ones. And the possibility of experiencing an illness or injury is higher than most people imagine. More than one in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach their normal retirement age.

Related: Temporary disability insurance reduces SS applications, new beneficiaries, study finds

An important consideration for determining the need for disability income insurance

How high is the risk? Caregivers should look at their family’s health history and whether their personal activities could lead to injuries, especially for musculoskeletal disorders — such as arthritis — along with cancer and mental health conditions — such as depression and anxiety, which are some of the most common reasons for long-term disability claims.

Although employees spend an average of just 18 minutes enrolling in benefits, the added time caregivers spend researching, understanding and enrolling in benefits that can replace a portion of their short and long-term finances if they can’t work due to sickness or injury may be well worth the alternative: cutting back on worked hours or leaving the workforce entirely, potentially leading to loss of salary and reduced Social Security benefits and retirement savings.

This material has been provided for educational purposes only. This material was created to provide accurate and reliable information on the subjects covered. It is not intended to provide specific legal, tax or other professional advice.

Jessica Tuman, Head of Enterprise ESG & Voya Cares Centers of Excellence