Study shows critical need for workplace disability insurance

photo Unum CEO Tom Watjen

BY THE NUMBERS• 39 - Percent of private industry workers with employer-provided short-term disability insurance• 33 - Percent of private industry workers with employer-provided long-term disability insurance• 650,000 - Number of disabled workers who got employer-sponsored long-term disability insurance benefits in 2012• $18 - Average monthly payment for short-term disability coverage• $25 - Average monthly benefit for long-term disability coverageSources: Mathew Greenwald & Associates survey, U.S. Bureau of Labor Statistics

After two back surgeries in the past five years, Dawn-Michelle Wyzard lost 14 months of pay from her job as a data processing manager in suburban Louisville.

But unlike a majority of American workers, Wyzard did have employer-sponsored disability insurance so she was able to pay her bills without her regular paycheck.

"There is no way I could have possibly survived surgery financially - and been off work - had the disability insurance not been there," said Wyzard, a 37-year-old single mother of a teenage son.

A new survey of disability insurance beneficiaries released Monday underscores the advantage of employer-sponsored disability coverage. Although only one in three private sector employers offer long-term disability coverage, the Social Security Administration estimates that one in four American workers will need disability insurance sometime during their career.

Stephen Broback, executive director of the Consumer Federation of America (CFA) which analyzed the survey, said employer-offered disability insurance "is a critically important part of the social safety net." Broback said surveys of those getting disability coverage show that such benefits "played an essential role in protecting their emotional and financial lives."

The CFA, which was paid $40,000 by Unum Group to conduct and analyze the study of disability beneficiaries, "urges all employers to offer the option of obtaining disability coverage," Broback said.

Even when employers don't pay for the coverage, an earlier CFA study found that most workers said they would be willing to pay for such coverage themselves if offered through their employer at attractive group rates. Most disability insurance plans cost workers $10 to $30 a month for long-term coverage.

"Unfortunately, over 75 million American workers do not have access to this coverage and lack the financial resources that are needed to support themselves when they are unable to work, putting themselves and their families at financial risk," Unum CEO Tom Watjen said during a conference call about the new study.

The Chattanooga-based Unum, the world's biggest disability insurer, is trying to promote more public awareness about the need for employers and workers to buy disability insurance and boost one of its primary lines of business.

Most Unum plans pay disabled workers 60 percent of what they make while on the job. The reduced payments for those disabled forced a third of those getting disability insurance to also seek government food assistance and 32 percent said they cut back their lifestyle. But most said they would have been far worse and could have lost their home without disability coverage.

Vicki Berheen, a 65-year-old disabled office coordinator in Indiana, was forced to quit working in 2010 due to problems with her Chronic Obstructive Pulmonary Disease.

"I was on oxygen for a year at work, but it got to a point where I didn't have the breath to talk with patients, to get up and find a doctor or to pull a patient's charts," she recalled. "My disability insurance was a Godsend and knowing that I had that money coming in was like going from drowning to taking a deep breath. My life would have been a whole lot worse without my employer's disability insurance because I wouldn't have been able to pay my bills, which would have meant I probably turned to welfare or Medicaid."

Private disability insurance begins earlier than Social Security disability benefits, which usually take six months or more to begin, and private disability insurance usually provides more in payments. Employer-sponsored disability insurance helps cut the government's costs for Social Security Disability Income payments and helps more disabled workers pay their bills, stay in their homes and recover quicker without so many financial worries, Watjen said.

But Watjen said many cost-conscious major employers are requiring workers to pay a share of the disability insurance they offer while many small- and medium-sized employers are struggling to figure out how health care reform affects their benefits.

"With health care reform this year, it's often harder to get their attention," Watjen said, noting that most employers think of disability insurance coverage only after they have worked out health insurance and pension or retirement plans for their workers.

"There is a real need for disability insurance, and our industry needs to do a better job of getting that message out," he said.

Contact Dave Flessner at or at 757-6340.

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