INTEGRATED BENEFITS
Managing the Costs of Employee Long-Term Disability (LTD) Programs
Attract and retain . . . attract and retain . . .
As HR professionals, it is a mantra that we are all too familiar with. Our critical Labour shortage has created a climate where employers need to implement unique strategies to attract and retain key employees – one of the most important is benefit program enhancements. Employee's ranked compensation and benefits as the top two factors required for job satisfaction in a survey conducted this year by the Canadian Society For Human Resource Management.
As the trustees of their employees’ LTD programs, employers are adopting non-traditional benefit plans. These provide the stability and breadth to manage employee expectations and emerging demographic trends.
The baby boomers turned 60 this year and careful consideration is being given to the consequences on LTD premiums. Companies are losing intellectual capital as the boomers start to retire; but with 75% of all LTD claims occurring between the ages of 55 and 65, companies are also faced with what are forecasted to be, unprecedented LTD premium increases.
“Combo” Long-Term Disability Plan Trends
Traditionally, employer sponsored benefits include a mandatory group LTD program. These plans are subject to annual renewals whereby premiums are adjusted according to the group’s claims experience. To manage demographic and critical illness incidence trends (Cancer is the leading cause of LTD claims), employers are implementing cost management tools such as integrated Long-Term Disability strategies.
Combining individual LTD contracts with group programs (typically 50/50 policy split) allows employers to secure locked in premiums, guaranteed contract provisions, and higher non-medical maximums until an employee is 65.
I
N
C
O
M
E |
~50% |
|
Group LTD |
| ~50% |
Individual Disability |
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|
|
|
120 day |
Age 65 |
Group LTD
- advantage of low cost without compromising quality.
Individual Disability
- offers enhanced product features
- guarantees the contract provisions until age 65
- premium rates guaranteed to age 65 (not subject to annual renewal)
- fully portable
Working with specialized benefit providers to find creative solutions to these challenges will enable companies to contain costs, meet employee expectations and align with core business strategies.
For more information please contact us at 604.687.7773 or email solutions@customplanfinancial.com
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