2. Managing Employee Benefits: Adding a Long-Term Disability Benefit
It is time for the annual review of benefit offerings at Medfirst Pharmaceuticals. With more than 1,500 employees and growth on the horizon, Director of Compensation Harold Jones knows that he must ensure that the benefit package is attractive to potential new employees while still meeting the needs of current employees. Medfirst has a diverse workforce that includes scientists, administrators, support staff, and field sales employees. Harold thinks that the current package is attractive but that more options might add overall value.
The company currently offers a health insurance plan, a retirement savings plan, a generous paid time-off allowance, life insurance, and short-term disability insurance. Harold has reviewed benefit utilization reports and also an employee satisfaction survey and finds that, overall, employees are satisfied with their benefits. Medfirst is focused on retaining employees over the long term, and several questions on the employee satisfaction survey ask about their concerns related to their employment at Medfirst. While employees seem confident that the company is on the right track to remaining successful, employees noted that they were concerned about their financial security and long-term opportunities at Medfirst. Harold thinks that these feelings may be a result of external forces, such as 187the recent downturn in the economy, coupled with excessive media coverage of health problems that continue to plague the public in general.
As Harold reflects on these employee concerns, he considers some employees over the last several years who have had to take extended leaves of absence due to medical problems. One employee in particular had to have back surgery that left him out of work for almost a year. Harold knows that the absence of income and the high medical expenses caused a toll on this employee, who had to borrow from his retirement account in order to pay his home mortgage during that time period. Harold knows that stories such as this are becoming more common and that giving employees some relief from such concern would be welcomed. Thus, he is considering offering a long-term disability insurance option for employees.
A long-term disability insurance benefit would provide employees with income continuation in the event of an illness or injury that leaves an employee unable to work for a period of greater than six months. Harold learns that there are some options such as partial disabilities coverage, which provides employees some payments if they are able to continue working only in a part-time capacity due to their illnesses or injuries. Such an option hadn’t occurred to Harold, and he realizes that he needs to learn more to determine if Medfirst should offer long-term disability insurance.
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How do disability insurance benefits differ from workers’ compensation?
Workers ' insurance includes protection only for work-related accidents and illnesses. Insurance coverage for the condition must include both accidents and sickness. As a consequence, in relation to their medical coverage, an individual will be entitled to seek Insurance benefits under workers ' compensation as well as social security disabilities. Often companies have in their contract compensation clauses that reduce the company's funded profit commitments dependent on contributions earned by certain sources. Workers ' compensation includes safeguards from work-related accidents and sickness, and impairment benefit policy reaches beyond the job scope. Disability disability protection protects all on-and off - the-job accidents and diseases, while employers ' compensation includes work-related illnesses or disabilities only once again. Workers ' insurance includes for accidents or diseases linked to the job. This is no compensation for accidents or sickness that arise during school hours, even while you're on a personal day.
If a company already offers short-term disability insurance, why should the company consider long-term disability insurance?
There is an growing amount of conditions and disabilities that involve impairment for a time longer than the six months usually covered with a short-term disability program. As a consequence, a long-term disease or accident will devastate workers emotionally more frequently than not. Providing a long-term injury incentive will alleviate workplace fears and can offer an opportunity to support a dedicated workplace over a period of time and, in many situations, eventually return to work.
Do you think the long-term disability insurance benefit would be a valuable addition to Medfirst’s benefit offerings? Should the company include the partial disabilities coverage?
In this scenario, the existence of a long-term impairment payment may appear to have certain merit. Considering that the organization is seeking to recruit and maintain a long-term staff, providing such a perk will give some comfort to workers that they will be financially secure in the case of a longer-term disease or accident. Provided that such incapacitation is more possible, and that workers have found financial protection issues, it seems to be a safe idea for the company. If Medfirst goes on, the introduction of minor conditions will be a smart addition. When workers are forced to return to work at least slightly, the employer will benefit, as opposed to having to accept insurance for complete disabilities. Allowing workers to continue to work part-time often allows Medfirst accomplish its mission by maintaining staff who have taken advantage of the injury opportunity by relieving them back to work practice.
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2. Managing Employee Benefits: Adding a Long-Term Disability Benefit It is time for the annual review...