Group disability claims are climbing. Here's what that means for employers

When was the last time you thought about your group disability coverage? If you're like most business owners, the answer is "at renewal, for about five minutes." It's one of those benefits that sits quietly in the background until somebody on your team can't work.

That background benefit is getting a lot busier.

What's happening

Four of the biggest names in group disability insurance, Unum, Prudential Financial, MetLife, and Sun Life, all reported a noticeable increase in the number of claims in the third quarter. The common thread they pointed to was behavioral health. In plain English, more working people are filing claims tied to mental health.

One quarter doesn't make a trend. But when four big carriers see the same thing at the same time, I think it's worth paying attention.

Why it matters to a business owner

Here's the part that hits your desk. A disability claim isn't just an insurance event. It's an empty chair.

Somebody has to cover that person's work. Maybe that's overtime for the rest of the team. Maybe it's a temp who needs training. Maybe it's you, staying late again. And the people picking up the slack are usually your best people, the ones you can least afford to burn out.

Then there's the renewal. Insurers price based on claims. When claims climb across the industry, it's fair to wonder what that does to the rates employers see down the road. I'm not going to guess at a number, because nobody knows yet. But I've never seen rising claims lead to falling prices. Have you?

The bigger point

This is one more line item in a long list. Health premiums keep climbing. Pharmacy costs keep climbing. Now disability claims are moving the same direction. The pressure on benefit costs isn't a bad year. It's structural.

And what's the usual fix? Raise the deductible. Raise the employee's share of the premium. Trim the plan. Every one of those just moves the cost from the business to the employee. The bill doesn't shrink. It changes hands.

That's a tough trade when the people on your team are already stretched. Is shifting more cost onto them really going to help with stress?

A different approach

What if the answer wasn't cutting something, but finding money you're already leaving on the table?

That's the work I do. I help organizations with W-2 employees lower the employer's payroll tax costs, which lowers the total cost of payroll, and increase most employees' take-home pay. It's done with zero-cost supplemental benefits layered on top of what you already offer.

Let me be clear about what it isn't. I'm not a payroll company. I don't run, process, or change your payroll. You keep your payroll company, your carrier, your broker, and your current plan, and none of them change what they do for you today. This works for businesses and government entities alike.

For the business, that means a little more margin and a little more control over costs at a time when most of your benefit costs are moving in only one direction. That's business financial freedom: room to breathe, room to plan, and room to keep good people.

Where the two kinds of freedom meet

Here's what I like most about it. When the business lowers its payroll tax costs this way, most employees see more in every paycheck. That extra take-home pay is where an employee's own financial freedom starts. It's a little less stress when the bills come in, a little more toward paying down debt, and maybe some room to finally start saving.

That's the idea behind The Freedom Ledger: a healthier business and healthier households, moving in the same direction. If you want to think about the household side for yourself, that lives at freedom.chrisattaway.com.

Want to see what this could look like for your team?

In a free 15-minute call, I'll ask a few questions about your workforce and current setup and tell you honestly whether a deeper look makes sense. No pressure, and nothing changes with your carrier, broker or payroll company.

Book a strategy call or call or text me at 386.346.2683.

— Chris Attaway, Chris Attaway Consulting

This article is for educational purposes only and is not tax, legal or financial advice. Results depend on each organization's situation.