Group disability insurance
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GROUP DISABILITY INSURANCE Help protect their income with group disability insurance
A disabling illness or injury may be more common than your employees realize, and it could affect them financially. When you offer group disability insurance as a benefit, your employees can continue receiving income if they’re out of work due to illness, injury, or pregnancy.
What group disability insurance offers
Considering that 1 in 4 adults will suffer a disability during their career1, group disability insurance is a valuable benefit. We’ll help you design a plan that helps your company and your workforce.
Comprehensive options
You can cover short-term disability (including maternity leave) and also long-term disability, which kicks in afterwards when employees are out of work for longer
Protection for them
Group disability insurance makes it possible for employees to take off the time they need while also meeting their personal financial obligations
Incentives for you
Small companies (two to nine employees) are eligible for a five-year rate, guaranteed2, and employer-paid options could provide tax benefits
Protecting your employees’ ability to earn paychecks
Several different options for group disability
Employer paid
The company pays 100% of the premium
Voluntary³
The employee pays 100% of the premium
Contributory⁴
The employer and employees share the cost of the premium
Supplemental⁵
Employees can add on to the employer-paid coverage
How group disability insurance differs from workers’ compensation
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Covers injuries or sickness that occur outside the workplace6 |
Covers injuries of illnesses that occur inside the workplace |
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Administered by an insurance company |
Administered by the state |
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Employers are not required to offer coverage, in most states7 |
Employers are required to offer coverage |
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Flexible payment options available, including employer-paid, employee-paid, or a combination of both |
Employers are responsible for the premiums |
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Does not cover medical bills. Maternity is covered under Group Short-Term Disability Insurance. |
Covers treatment costs for the job-related injury or sickness |
Common questions about group disability insurance
Disability insurance replaces part of a person’s income for a specific period of time if they're unable to work due to sickness, injury, or pregnancy. Your company can provide group disability insurance as an employee benefit, designed for your unique workforce. Connect with an agent for quotes, guidance, and answers to any questions you may have.
Many common injuries and illnesses can take employees out of work. In fact, more than a quarter of 20-year-olds will miss at least a year of work at some point in their career due to a disability. (Source: The Faces and Facts of Disability, Social Security Administration, 2021.) Federal benefits won’t cover most of these cases, and employees could go without income for a period of time if they don’t have disability insurance.
The cost of group disability insurance for your employees may depend on the type you offer, the amount of coverage your company covers, and the characteristics of your workforce. At New York Life, we offer several payment options, like voluntary plans paid by employees, employer paid plans or a combination of both. Connect with an agent for quotes, guidance, and answers to any questions you may have.
There is a maximum amount of disability insurance someone can apply for. Most people are limited to 45-66% of their monthly income across all group disability insurance that they have. Your agent can answer questions that employees may have about their own eligibility.
The exact coverage may depend on the group policy you choose for your employees. Generally, employees must be totally disabled due to injury or illness, unable to perform their regular job duties, and receiving regular care from a doctor. Maternal leave would also be covered under short-term disability. Connect with an agent for more details about your options.
There are more ways to support your workforce
1Source: “Disability Statistics", Council for Disability Awareness, 2018.
2Plan changes may cause a change in premiums.
3Gross-up plans allow employers to include premium cost as salary increases in employees’ salaries, thus providing employees with potential tax-free payment benefits.
4Minimum participation requirement is 75% for contributory plans on groups with 10+ lives; higher participation requirements for groups with two to nine lives.
5Minimum participation requirement is greater than seven employees or 25% of eligible lives for voluntary plans. Available with an employer-paid group plan.
6Covers injuries and illnesses that occur outside of work and aren’t eligible for workers’ compensation.
7In California, short term disability covers injuries and illnesses that occur outside and at work.
New York Life’s Group Disability Insurance program may be subject to the Employee Retirement Income Security Act of 1974 (ERISA).
You should consult with your tax and legal advisors regarding the applicability of ERISA to this program and your responsibilities, if any, under the program.
New York Life, its subsidiaries, agents, and employees do not provide legal or tax advice.