Insights – May 2023
by Ellen Whelan, FSA, FCIA
In a recent survey by Eckler, when unions and plan sponsors were asked about the relative importance of different types of benefit coverages, short-term disability (STD) and long-term disability (LTD) ranked 3 and 4 just behind medical and dental at numbers 1 and 2, respectively. Yet, while plan sponsors have spent a considerable amount of time modifying health and dental plans to better meet plan member needs at a more effective cost point, disability benefit plan designs have remained much the same for the past several decades.
Typically, disability plans represent the second-largest workplace benefit spend at around 25% of total benefit costs. While cost alone has not been a catalyst for change to date, given the mounting mental health crisis combined with inflated wait times for diagnostic and treatment services, rapidly escalating disability premium rates, and the recent changes to Employment Insurance (EI) sickness benefits, there is reasonable impetus for declaring that the time for a “refresh” is upon us.