Many Americans have a false sense of security and safety about injuries and prefer to believe they happen only to others. However, statistics prove most people are not as immune as they'd like to think: According to the Centers for Disease Control, there are more than 80 million injury-related visits to doctors' offices, hospital outpatient departments and emergency-treatment facilities in the U.S. each year.1
The bottom line? Accidents happen - that's why they're called accidents - and no one can predict when, where or whom they'll strike. June is National Safety Month, making it a great time for human resources professionals and employers to remind workers just how common financially devastating and potentially disabling accidents can be considering that:
- Slightly more than 25 percent of 20-year-olds will be disabled before reaching age 67.2
- 68 percent of the private-sector workforce has no long-term disability insurance.2
- A mere 9 percent of long-term disabilities are the result of accidents that are considered "serious."3
- Employer-provided disability insurance prevents as many as 575,000 families each year from slipping into poverty levels, saving the government and taxpayers up to $4.5 billion annually.3
Who pays for that?
Many employees believe workplace injuries trigger the majority of insurance claims, but that's not true. In fact, 90 percent of disabilities are not work related, so they're not covered by workers' compensation.4 Adding insult to injury is the fact that many families simply don't have savings to fall back upon.
Twenty-five percent of all U.S. households are "financially fragile" and could not come up with an emergency fund of $2,000 within a month, while another 19 percent would cope at least in part by selling or pawning possessions or taking payday loans.5 That's bad news when a breadwinner is injured and can't work - and, therefore, can't earn an income.
The good news? Employers can help protect their workers' financial security by offering voluntary accident or disability insurance - at no cost to their bottom line. By adding these employee-paid plans to their benefits portfolios, businesses give workers valuable financial protection with no direct effect on their companies' bottom lines. Here's how they work:
- Accident insurance - Accident insurance helps employees stay ahead of the medical and out-of-pocket expenses that add up quickly after an injury. Benefits can be used not just for emergency treatment, hospital stays and medical exams, but also for other expenses workers may face, such as transportation costs, lodging needs and daily living expenses.
The protection accident insurance provides may be particularly important to employees who are generally healthy and have not met the deductibles on their major medical insurance policies because benefits can be used to pay out-of-pocket medical costs, including deductibles and copayments.
- Disability insurance - When an employee suffers a disabling injury, the initial focus is naturally on the journey to healing. The second is often, "How soon can I return to work - and how will I pay my bills if I'm out of work for an extended period?"
If disabled, workers may not lose only the ability to earn a living, but may cut short any contributions to savings and retirement funds. They may even face missing mortgage or other important payments.
By offering voluntary short-term disability insurance, employers provide the confidence that comes from knowing benefits can be used to help pay the mortgage or rent, as well as for gas, groceries or education expenses - in short, any bill that is a part of a family's financial security.
Building employee trust
Here's more good news: Employers that put together comprehensive benefits portfolios do more than help protect their employees' financial health; they also protect their business interests. Workers surveyed as part of the 2016 Aflac WorkForces Report said strong benefits plans increase their company loyalty, productivity and job satisfaction.
What's more, the survey revealed that health insurance plays a role when workers are deciding whether to remain in their jobs or leave for companies offering better benefits.6 In an atmosphere in which hiring and retaining the best and brightest workers is critical to company success, providing employees with benefits that help protect their finances from the often-debilitating costs of an illness or injury isn't just the right thing to do - it's also a smart business decision.
About the Author
Matthew Owenby has more than 15 years of experience in the financial services/HR industry and is senior vice president, chief human resources officer at Aflac, a company with more than 9,500 employees. He is responsible for providing strategic direction for the Human Resources function and executing global initiatives for the corporation. Visit aflac.com, call 1.888.861.0251 or send an email to addbenefits@aflac.com to learn more.
References:
1. Centers for Disease Control and Prevention, "Fast Stats, All Injuries," accessed May 7, 2015 - http://www.cdc.gov/nchs/fastats/injury.htm
2. Social Security Administration, "Social Security Basic Facts," accessed May 7, 2015
3. Charles River Associates, "Financial Security for Working Americans: An Economic Analysis of Insurance Products in Workplace Benefits," accessed May 7, 2015
4. LIMRA, "Facts from LIMRA, 2014 National Disability Awareness Month," accessed May 7, 2015 - http://www.limra.com/uploadedFiles/limra.com/LIMRA_Root/Posts/PR/_Media/PDFs/2014-DI-Fact-Sheet.pdf
5. National Bureau of Economic Research, "Financially Fragile Households, Evidence and Implications," accessed May 7, 2015 - http://www.nber.org/papers/w17072.pdf
6. The 2015 Aflac WorkForces Report, conducted in Jan. 2015 by Research Now on behalf of Aflac, accessed May 7, 2015 - http://workforces.aflac.com/
