Disability insurance

The real value of disability insurance
lies in its capability to protect
employees over the long haul.

According to Sandra Corcia, an agent
with Sapoznik Insurance, more people
lose their homes due to a disability than
through fire or death, and 48 percent of
all foreclosures occur when employees
can’t pay their mortgages due to injury.

What is disability insurance? Simply
stated, disability insurance is a policy
similar to a life insurance policy. An
important point to remember is that with
life insurance the beneficiary is to
receive the benefits upon the death of the
insured; with disability insurance, the
insured is to receive the benefits. Rather
than a lump-sum benefit, it pays a monthly benefit while the policy’s definition of
disability is being satisfied.

Although disability insurance can ease
many of the devastating financial and
physical results of injury or illness, it is a
form of coverage that is often overlooked by employers and employees

Smart Business spoke to Corcia about
why disability insurance should be a part
of a well-rounded employee benefits

Why should employers offer disability
insurance to their employees?

Disability insurance complements an
employee benefits program. A complete
benefit program that includes disability
insurance can help a company to attract
as well as retain quality employees —
and even serve as an incentive to long-term employees. In addition, it demonstrates an employer’s concern about its
work force’s well-being and financial
security. Many employers may not realize
how the right disability plan can significantly help to reduce health care costs
and absenteeism. At the same time, an
effective disability plan may improve
claims experience and employee productivity. In return, this increases employee
loyalty and has a positive impact on
morale. In today’s tight labor market, this
impact is something employers should
not underestimate.

Why is disability insurance so important?

Consider these statistics:

  • A 30-year-old man has a 1-in-5 chance
    of suffering a long-term disability before
    his planned retirement.

  • A 30-year-old woman has a 1-in-3
    chance of suffering a long-term disability
    before her planned retirement.

Insurance by its very definition insures
against the loss of property and assets.
Loss of income is a financial blow to any
working person, regardless of his or her
salary. Lifestyle usually rises to meet the
level of income, and it is that lifestyle
that is immediately jeopardized by a sudden stop to the flow of income. If you are
the main source of income to your household then disability insurance is crucial
to help you with safeguarding your auto
payment, mortgage payment and to
maintain some form of income.

What are the different forms of disability

There are two primary forms of disability insurance — short-term disability
(STD) and long-term disability (LTD).

STD insurance provides an income to
participants who are disabled until they
return to work or become entitled to the
LTD benefits provided in their benefits
package. LTD insurance ensures financial support to participants who are
unable to work for an extended period of
time due to illness or injury. This coverage provides for monthly benefit payments equal to a percentage of the participant’s monthly salary, starting 90 days
after the disability kicks in. It’s not a full
percentage, but different disability plans
offer varying amounts.

How can this coverage be beneficial to companies and employees in the long term?

Fifty percent of people who suffer disabilities lasting longer than six months
remain disabled after five years and will
have a chronic disability. You hear about
auto accidents or people slipping and
falling where, sooner or later, that
slipped disk rears its ugly head yet again.
What is going to protect your income
during that relapse? What is going to help
you and your family stay afloat? These
are all vital points that disability insurance addresses. Disability insurance really stimulates an employee to go about
returning to work the right way, making
sure that the adequate rehabilitation, follow-up and medical care is undergone.

What is the advantage of group disability
insurance offered by an employer versus
individual disability insurance?

Disability insurance becomes an integral part of a benefits package to complement an existing group health, dental,
vision and life insurance plan. The
employer-sponsored plan will offer
group pricing and generally will not
require medical underwriting or income
verification. In comparison, individual
policies can be quite costly and a person
must satisfy medical underwriting
requirements when applying for coverage to qualify.

SANDRA CORCIA is an agent with Sapoznik Insurance. Reach her at [email protected] or (305) 948-8887.

A healthy ROI

They say you don’t have anything if
you don’t have your health. As
employers focus more and more on productivity in tight times, they’re
realizing how important the health of
employees truly is. The link between
wellness and productivity is clear; the
impact on a company’s financials creates
even more incentive to implement a formal wellness program in the workplace.

“That’s the ultimate goal of wellness: to
lower the costs for the employee and the
company,” says John Tolan, an employee
benefits agent with Sapoznik Insurance.
“It’s twofold — you’re maintaining the
health care costs from going up, so
you’re going to help out your bottom
line, but also there’s that hidden bottom
line of dollars lost due to absenteeism or
lack of production.”

Smart Business learned more from
Tolan about the effect of wellness programs on a company’s health care costs
and workplace productivity.

What type of benefits will businesses see
from implementing a wellness program?

Absenteeism is reduced greatly. A
healthier work force is a more productive work force. The concept that an
employee is a healthy employee has a
huge effect. Prevention and education,
over time, lower health care premiums
— that is a fact. Productivity at work is
also improved because employees are
not missing days and are not taking time
off during work to go treat an illness.
Let’s say an average employee is making
$25 an hour and is taking three hours off
this week. It’s costing the company in
payroll, plus untold hours are being lost
in productivity. These numbers can be

What are some ways employers can impact
their employees’ health?

They need to have interventions aimed
at prevention and early detection and do
best-practice treatment of workers.
Putting those programs in place will
make your company healthier and more
productive. If employees become aware
of their own wellness and lifestyle and
change those things, national trends suggest that their self-esteem improves,
their confidence rises, their work productivity increases and there’s less

Do wellness programs pay off through
lower insurance rates, as well?

Just because you all of a sudden put in
a wellness program does not guarantee a
percentage of savings, per se. Although
the impact of lower rates will not be felt immediately, over time statistics suggest
that there will be a gradual decrease in
rates. Nationally, companies that have
put proactive programs in place have
been able to see much lower rate
increases than those companies that do

How can companies up their chances of
seeing ROI?

There are many companies out there
that are making it mandated that their
employees have their once-a-year wellness visit, and those employees who do
not will then be charged higher insurance costs. The reason some carriers do
this is because, by not performing an
early detection, you’re going to have a
far greater risk later on, which will then
affect all employees through higher
health care costs. So there are companies out there making it mandatory that
you go see your doctor and have wellness visits because they know it will
have a positive effect on their renewals.

Other companies have taken it further
and are implementing employee assistance programs (EAP) as part of their
complete employee benefits program.
Family concerns, medical issues or personal situations can have far-reaching
effects on an employee. Companies that
provide the appropriate channels,
including proactive wellness initiatives,
EAP programs and wellness education,
are taking the first steps toward curbing
the escalating rise of health care costs
and watching their return on their
investment pay off within the next several years.

JOHN TOLAN is an employee benefits agent at Sapoznik Insurance. Reach him at (877) 948-8887 or [email protected].

Engaging your work force

Wellness in the workplace has
turned its focus to creating a
shift in consciousness where employees are taking ownership of their
lifestyles. It’s not going to happen
overnight, however, points out Marc
Moskowitz, employee benefits agent
with Sapoznik Insurance, who cites a
study that shows that people research
the cell phone that they’re going to purchase more than the foods that they eat
or the plans that they select for medical

“When you’re dealing with health insurance, the push that must occur is the
shift toward consumerism so that each
and every individual that’s on that group
policy is pulling their fair share of the
burden,” Moskowitz says. “We truly
encourage the practice of preventive
care, rather than seeking treatment for a
preventable illness that has already
taken hold.”

Smart Business learned more from
Moskowitz about the evolution of wellness programs toward consumerism and

What are some health insurance issues that
should be addressed by every company?

The majority of claims that are registered throughout the course of the year
have to do with issues like cardiovascular disease, diabetes and stress. These
are things that can be controlled and, in
many ways, if detected early, prevented
from becoming costly medical claims.

One thing to strive for is quarterly contact with your employee benefits broker
so that you can cultivate a sense of well-being among your employees. Instead of
just seeing the group during an open-enrollment period or a renewal, a strong
broker should maybe have a stress management workshop or a health fair.

What are some ways to get employees
interested in a company wellness program?

It is vital to create communication
tools, whether they’re newsletters or flyers or payroll stuffers, that outline the importance of wellness and the significance of a healthy company and how
that impacts your fiduciary responsibilities as an organization. Build in rewards
and incentives tied into participation to
build interest in your corporate wellness
program. Easy to organize contests and
reward systems are a great way to stimulate interest and gain employee involvement. An employer can encourage
employees to come to a health fair or to
go get a health screening by giving away
gift certificates or even having some
type of employee of the month.

What we’ve noticed is that so long as
there’s buy-in from top decision-makers
or professionals in human resources
who have immediate interaction with
the work force and can set these things
into place, the interest level for employees is there.

How can employers take wellness to the
next level?

What’s most significant here is it’s not
just creating a program and letting it
take on a life of its own. You need to
keep it fresh. Pick three or four topics of interest. It might be something that
involves the employees to do something
during their lunch break, such as a walking program or maybe some kind of
incentive that ties into weight loss, for

Employees can drive it so far because,
yes, they do have a level of interest, but
the employer should at least set up the
idea that there’s a greater purpose for
this. Is the greater purpose perhaps a
reduction in claims experience that will
lead to a reduction in your premium? Or
is it simply that the employer will provide a reward system based on certain
achievements? What we’re trying to do is
create the buy-in that gets people to
understand, ‘Alright, the impact of what
I do in the office and at home will have a
direct tie-in to how much I pay in terms
of premium dollars.’

How can each company set its own milestones for improvement?

The answer to that is: Any which way
that the company wants. We know that
every company is different and has a different corporate culture that’s inherent
in their organization. We’re taking it one
account at a time. One thing to keep in
mind is that it isn’t a pure science, so
having that understanding, you could
come in with a program and then always
modify it, see what works, see what
doesn’t and have it become an evolutionary type of process within the organization. But it should become a fixture. It
can be run by a committee, perhaps —
maybe part of your HR team or a group
of employees who want to champion
this cause. That goal-setting and
progress-tracking and achievement
scale will come as a natural evolution to
that and will be an inherent part of its

MARC MOSKOWITZ is an employee benefits agent with Sapoznik Insurance. Reach him at [email protected] or (877) 948-8887.

Workplace wellness

It’s no longer a question that the lifestyles of
employees affect not only health care
costs but also productivity in the work-place. Now the question becomes: As an
employer, what effect can I have on my
employees’ health and well-being?

“Everyone needs to make a greater effort in
understanding the relationship between wellness and reducing your health insurance
costs,” says Rachel Sapoznik, president and
CEO of Sapoznik Insurance. “There needs to
be a cultural change within the company.
And once a company makes a cultural
change, over time we have seen incremental
reduction of claims, which then results in stabilization or even reduction of health insurance costs.”

Smart Business learned more from
Sapoznik about the positive influence of wellness programs on health care costs.

What are the benefits to implementing a
wellness program?

A wellness program can reduce those types
of claims that could have otherwise been
avoided. The awareness of the wellness program for the employees creates an environment where they understand that they’re in
control of their well-being and their health.
Many of the claims that really hurt employers
are the large catastrophic illnesses that were
undetected. All of these types of claims are
very costly to the plan. And as the claims
increase, so does the premium. As the premium increases, employers have to make decisions: Do I pass on the increase to the
employee? Do I cut benefits? Do I have to
change carriers and disrupt my employees’
relationships with their doctors? As we have
employees understand that they can be part
of the solution, it’s a lot like the adage of, ‘Let
me help you help yourself.’

What is the desired outcome of a wellness

What we’re finding is, as employees
become engaged in wellness, it becomes part
of a culture. People start saying, ‘Wait a
minute, we all have to work together in helping to reduce health care costs.’ So, for
instance, as a culture, instead of having fatty
foods in your vending machine, you have healthy choices. Instead of only having sodas
in your vending machines, you provide water
or juices. Again, it’s about healthy choices.

What are some misconceptions about wellness programs?

A lot of times, employers feel that it could
be costly or that their employees may be
spending time outside of the function of what
they’re there to do. Maybe employers feel
that they don’t want to get involved in their
employees’ health. But the fact that they’re
providing health insurance already tells you
that they are involved, and it is a very large
line item of the budget, which directly affects
the bottom line.

What is the foundation of an effective wellness program?

The main component of a wellness program has to be consistency. You can’t have a
once-a-year type of health fair and then just
leave it alone. There needs to be constant
communication with the employees whether
via the intranet or newsletters on wellness
with different topics each month, such as getting fit and staying fit, eating for life, smoking
cessation, heart health, etc. The focus has to constantly be changing because you don’t
know which is going to be the hot button for
a particular employee.

One of the biggest components for a good
wellness program is the buy-in by management. If your managers do not allow the
employees to participate in wellness programs by not giving them the time to do it or
they’re not distributing the e-mails or encouraging them to get their cholesterol tested,
there’s no way you will have a successful
wellness program. It has to start from the top.
The CEOs and presidents have to buy in to
the concept of wellness, and that message
has to be clear to their managers.

What kind of assistance is available to

Typically, your best outreach will be your
broker. What you want to do is coordinate
not only with your health insurance carrier
but also with your disability carrier and your
life insurance carrier because they have to do
with wellness, as well. Your broker can help
coordinate all the vendors to help you prepare a unified message and have that message
be consistent throughout the whole year.

Health risk assessments (HRAs) are available for all group sizes, and it really does
allow you to create the framework so that
you understand your particular group’s
demographics. You understand that maybe
smoking is an issue within your group, or
maybe diabetes is an issue or stress in the
workplace. The HRAs give you the road map
that allows you to really formulate and create
that long-lasting program.

How should employees be encouraged to

First, we have to assume that the management has bought in to this. Once we make
that assumption, then we need to get the
employees to buy in to it. What we’re recommending to our clients is that they should
encourage the HRA, maybe through raffle
tickets; if employees do fill it out, they can be
put into a lottery to win something. It’s important to encourage employees and have them
understand that this helps everybody.

RACHEL SAPOZNIK is president and CEO of Sapoznik Insurance. Reach her at [email protected] or (877) 948-8887.

Know your numbers

As an employer, you’re aware that
wellness programs are a key part
of addressing rising health care costs, but may not know how to develop
the right program for your company.
Luckily, insurance providers offer a simple way to discover the most effective
plan for your organization based on
employees’ needs.

“All companies should be encouraging
their employees to participate in a health
risk assessment because it provides a
road map of how to establish a wellness
program,” says Rachel Sapoznik, president and CEO of Sapoznik Insurance.

Smart Business learned more from
Sapoznik about using health risk assessments to address employee wellness.

What’s the benefit of HRAs for the employer?

An online portal through the insurance
company allows the employees to input
their family history and medical history.
It determines in a very concise manner
the state of the union as far as their
health is concerned. Once the information is in the system, the employer then
gets a report from the carrier. The report
is in aggregate form, but it’s going to help
determine how many of those employees are suffering from different health
conditions. So you’re going to know if 50
percent of your employees may have diabetes or if 20 percent may be smokers. It
is going to help employers see what
types of programs they should implement to reduce the incidence.

Let’s say there are weight issues. Well,
maybe you want to put a weight management program together at your work place. By having a weight management
program you may be able to reduce the
onset of diabetes in your employees. By
reducing the onset of diabetes, the
claims saved are substantial. For
instance, if an employee is on the border
of becoming a diabetic and changes his
or her eating habits and avoids becoming diabetic, that’s about a $50,000 savings in claims costs. Because once someone becomes a diabetic, between the
insulin, the doctor’s visits and the other incidents that occur due to diabetes, the
claims costs is, on average, about
$50,000 for that employee.

What’s the benefit to the employee?

When someone logs into the system, he
or she can complete a health risk assessment in anywhere between 10 to 15 minutes, and it’s totally confidential. Employees then have their own personal
information. Normally, the health risk
assessments will score the employees
and let them know where they fall with
their peers. Maybe they are slightly over-weight, or maybe they should consider a
smoking cessation program, or maybe
they didn’t realize they were drinking
too much. This information is for their
eyes only. They can then track the information. It gives them the ability to track
their blood pressure and cholesterol all
in one area so that they could, month
after month or quarter after quarter or
year after year, see their progress from a
health standpoint.

Another important part of the health
risk assessment is that it does create a
record for employees that will really
help them in terms of listing the medications they may be taking and seeing if
there is any interaction. Now they have a
centralized document with all of their
medications. It also helps in terms of
their family history. And once it’s on the
Web, that information can then be given
to other doctors or new doctors. They
can just print it up, and now they’ve got
consolidated information about their
health history.

What is required of the employer?

There needs to be buy-in from the top
management to encourage the employees to participate in these programs,
and management needs to support it,
whether through a letter from the CEO
or the president of the company. There’s
no extra cost, and, ultimately, it could be
a substantial savings to the employer if it
can have its employees participate. It is
voluntary, but many employers are
encouraging employees to participate
through a reward system — maybe gift
certificates or a reduction in their health
care costs through payroll deductions —
because employers are seeing that this
could ultimately be the key to keeping
their employees healthy.

I think there should be a phase two of
the HRA. The next natural step would be
making sure employees know their numbers — there should be a real push on
‘know your numbers.’ And to aid in that,
employers should think about having on-site health fairs where employees could
have their cholesterol and blood pressure and sugar tested so that they have a
baseline. That along with a health
assessment will allow an employer to
really put a comprehensive wellness program together.

The health risk assessment process
itself is very turnkey. Insurance companies have even gone to the extent where
they’ll draft the CEO letter. Your broker
can help to facilitate everything from
employee buy-in to the development of a
wellness program.

RACHEL SAPOZNIK is president and CEO of Sapoznik Insurance. Reach her at [email protected] or (877) 948-8887.