Why New York State Employers Should Offer Enriched DBL Coverage

Five ways it benefits employers to provide a living wage for workers on NYS DBL.

In the months leading up to the election, there’s been a lot of talk about Americans having the opportunity to earn a living wage. While some states have minimum wage laws in line with their costs of living, the Federal minimum wage as of 2016 is only $7.25 as of July 2016. Most of us reading this might remember earning that much during high school or college—it’s certainly not enough to raise a family or buy a home. New York State workers—and their employers—face another wage challenge: Mandatory NYS DBL payments cap out at 50 percent of an employee’s paycheck, up to $170 per week. This is not a living wage. And the financial burdenNYS-DBL-Businesspeople is even greater if the employee is facing medical bills and co-pays or the birth of a newborn and the added expenses that come with a child.

But there is a solution.

It’s important for New York State business owners, CFOs, and HR directors to understand why they should offer enriched DBL coverage in New York to provide employees on temporary disability with a living wage. If you’re a broker, please share this information with your customers to start earning commission on these enriched mandatory benefits today.

1. Enriched DBL coverage can encourage employee retention.

An injured or ill employee on temporary disability shouldn’t have to worry about how they will pay their bills. If your organization isn’t taking care of them, they might use their time off to polish up their resume and look elsewhere.

2. A robust benefits package helps attract top talent—even across state borders.

Today’s employees, particularly millennials, want to have it all in a job: Salary, flexible hours or work locations, and a robust, customizable benefits package. Providing enriched DBL—even if the majority of your employees don’t use it—lets you beef up your benefits package.

Additionally, New York-based businesses in Manhattan or on the New York / New Jersey border should consider that they are competing with New Jersey-based businesses—which already have a generous mandatory disability benefits package—for top talent. A NYS DBL package that rivals New Jersey’s Temporary Disability Benefits might help you attract the best employees from over the bridges.

3. As far as benefits go, enriched DBL provides employers and HR directors with a lot of “bang for their buck.”

With minimal employer contributions, which can be shared with employees at a rate of one-half of one percent of the employee’s wages up to 60 cents per week on pre-tax dollars, employers can offer generous NYS DBL coverage of up to $850 per week. Few benefits cost so little yet provide so much value.

4. With New York introducing Paid Family Leave in 2018, enhancing DBL benefits to keep pace will improve employee morale and loyalty.

In states that offer Paid Family Leave, this benefit for new parents and anyone caring for an ill or injured loved one has been shown to improve employee morale and loyalty. More importantly, co-workers don’t mind helping out to cover for employees taking Paid Family Leave.
Offering enriched NYS DBL benefits for employees who are ill or injured can help ensure co-workers won’t resent those who are out on PFL, because they know they have the same protection should they ever be unable to work.

Additionally, New Jersey employers found that the state’s generous paid leave package helps reduce stress amongst employees who took leave, as well as their co-workers, which can impact the company’s bottom line, according to the National Partnership for Women and Families.

5. Top executives benefit, too.

When you enrich your DBL benefits package in New York, your disability benefits package will increase, too, up to the maximum of $850/week or $1020/week with in-hospital coverage. You can also add an Accidental Death & Dismemberment (AD&D) rider to the policy, with a tiered plan that will provide your C-suite with the most coverage available.

Find out more about Enriched DBL in New York State in this post, or bind your NYS DBL quote for a company with fewer than 50 lives here.


What Can Employees Do When Temporary Disability Runs Out?

Business owners in New York, New Jersey, and Hawaii must provide temporary disability payments for up to 26 weeks to employees who are ill, injured, or had a baby. But 26 weeks is not a long time for a person with a significant injury or a life-changing illness. Where can employees turn when temporary disability (DBL coverage in New York, TDB in New Jersey, and TDI in Hawaii) runs out?

Social Security Disability Insurance (SSDI)

Some people with an illness or injury may try to apply for Social Security benefits. However, to qualify for Social Security / Disability benefits, you must be unable to work for at least one year, or have an illness that will lead to death. The time between 26 weeks and a year is a long span to live without any income if you are unable to work. That’s where income replacement insurance – purchased privately or through the employer – comes in.

One of The DBL Center’s insurance broker partners in your area can assist with these types of coverage.

Why Healthy Individuals Need Disability Coverage

The Social Security Administration estimates that a 20-year-old employee faces a three in ten chance of becoming disabled before age 65. Other reports say one in four workers becomes disabled during their working life. These odds increase for heavy smokers, people who are overweight, or those who have a chronic condition such as heart disease,diabetes, or high blood pressure.

Yet, only 45 percent of millennial workers have long-term disability insuranceApril-Post-1-TD-Runs-Out, according to The Hartford Financial Service Group. More than 20 percent of millennials said they would need help from family or friends or move back in with their parents if they were unable to work due to illness or injury, while another 20 percent would have to rely on credit cards or borrowing against their 401K retirement account.

While employees don’t want to consider being one of the 25 to 30 percent of people who become disabled, it’s a reality. And most disabilities are caused by illness, not injury. Knowing they are protected, whether through private income replacement insurance or employer-funded temporary disability benefits offers peace-of-mind and greater financial security.

Extended Disability Coverage through the Employer

As the person in charge of the purse strings, you may wonder why you’d want to invest in additional insurance coverage that will pay out to your employees but not offer your company any real benefit?

The cost to the company is actually very small, especially if you purchase coverage as part of extended disability benefits. Extended disability coverage not only increases the length of time employees may be covered, but can provide more than the state maximum in benefits. Employers may collect up to 75 percent of their salary – enough to live on, in most cases –through enhanced disability benefits.

This benefits package may entice help entice star talent, but, more importantly, it can help you retain high-quality employees after they bounce back from an illness or injury. If your company took care of them in their time of need, they will return to work with a degree of loyalty. In fact, due to the strain financial difficulties place on person’s health, having disability coverage to provide for themselves and their family could, in fact, help make a return to work after injury or illness possible.

Private Long-Term Disability (LTD) Insurance

For self-employed contractors or individuals whose companies don’t provide extended disability coverage, insurance brokers offer long-term disability or income replacement insurance. Since the premiums on this insurance are paid out-of-pocket, the disability income is not taxable, so claimants receive their full benefits when they need the money most.

The Choice Is Yours

As the business owner or person in charge of HR decisions for the company, the decision to provide extended or enhanced disability coverage lies in your hands. Weigh cost factors with the intangible benefits of employee recruiting and retention.

Keep in mind that disability coverage doesn’t have to be “all-or-nothing.” You can give your employees the option to buy into a policy with lower premiums than they would get if they purchased individual disabilityon their own. Or you can split the cost with them. Since this is a pre-tax benefit, some employees may enjoy the tax benefits, too, although it means they will have to pay taxes on their disability income if they ever make a claim.

However you choose to structure the offerings, consider making extended disability coverage part of your employee benefits package. Contact your insurance broker to help you explore your options.