At any given time, roughly 10% of the workforce is on disability leave.1 However, not all employers offer long-term disability (LTD) insurance, which provides partial replacement income for employees with long-term disability status.

It can be a difficult time for employees, reflected by the fact that mental health claims make up 30% of disability claims and 45% of total claims costs.2

LTD is often bundled with short-term disability insurance, which provides financial support for up to six months. Typically, short-term and long-term disability policies provide 60% to 70% of an employee’s income; LTD commonly lasts for up to two years.

Determining amounts

The question for some employers is how much coverage they can offer. The answer depends on plan-specific factors including where the plan is located, the nature of the benefit, demographics of plan membership and plan experience.

With protections against discrimination based on age (in addition to marital status, sex or disability), it can be a challenge to determine a maximum age for receiving disability benefits.

Despite the challenges, employers may have little choice to offer LTD as employees weigh their options in the current job market. Consider these five reasons to offer LTD as part of a benefits package that emphasizes wellness:

  1. As an incentive to attract and retain talent: With base salaries relatively stagnant, strong benefits packages are the drivers of holding onto great employees and attracting new ones, and the cost of providing disability coverage is relatively low compared with other benefits.
  2. To cope with chronic absenteeism: Employees with chronic absenteeism or presenteeism can hurt efficiency. LTD benefits allow employees get help and have financial peace of mind while focusing on their recovery, while employers can fill a position in their absence.
  3. It helps employees protect their savings. LTD is a major benefit to promote financial wellness and supports employees on disability so they don’t need to go into debt, tap into savings or liquidate retirement accounts to pay the bills.
  4. As a way to highlight other benefits. When offered as part of a comprehensive program to promote health and wellbeing, LTD encourages employees to seek help. Some employees will use an employee assistance program (EAP) to support their mental wellbeing, while others can access preventive care services to support their physical needs.
  5. LTD increases loyalty. Employees that are unable to work may face challenges that affect their financial, physical and mental health. LTD insurance helps support employees — even when they can’t help the employer — and engenders strong loyalty, which, in this market of job hopping and resignations, is priceless.

To learn more about improving your benefits offerings through long-term disability insurance, contact your HUB broker.

1 Canadian Society of Professionals in Disability Management, “Impact of Disability,” accessed January 21, 2022.
2 SunLife, “Designed for Health, Disability Claims in Focus: Mental Health, COVID-19 and Beyond,” accessed January 21, 2022.