Auto-enrollment for disability plans can help employees make better financial decisions
August 13, 2018– CHATTANOOGA, Tenn.–(BUSINESS WIRE)–New research from employee benefits provider Unum (NYSE: UNM) shows nearly half of U.S. workers (49 percent) spend 30 minutes or less reviewing their benefits prior to enrollment, according to an online poll of 1,227 U.S. workers conducted last month. Respondents reported feeling stressed (21 percent), confused (22 percent) and anxious (20 percent) when enrolling in their benefits.
“Navigating the sea of coverage options can be overwhelming for employees,” said Jenelle Tomazin, director of Consumer Marketing at Unum. “Auto-enrolling employees in disability coverage on an opt-out basis can help nudge employees in the right direction while preserving their freedom to choose.”
Auto-enrollment defaults employees into beneficial coverage, yet also gives them the choice to opt out. This follows the popular enrollment model with retirement plans, designed to help employees make better financial decisions.
Auto-Enrollment Doubles Employee Participation
According to Vanguard research, ene, and from large national companies to small local businesses, automatic enrollment has been the right solution for Unum clients, as well.
Among the most successful are a warehouse club with 70,000 employees that had 95 percent employee participation; a 2,000-employee manufacturer with an 83 percent participation rate; and a 400-employee auto dealership that saw participation reach 80 percent.
Years of research shows employees need and want disability coverage – but they neglect to enroll.
- Seventy-one percent of Americans would find it somewhat or very difficult to meet current financial obligations if their paycheck were delayed by one week1.
- Even more (88 percent) think employers should offer disability insurance that could help protect their finances if they were unable to earn a paycheck due to sickness or injury2.
- Fifty-six percent of workers even say they’d pay the full premium2.
- Yet only 26 percent of workers actually sign up, so the majority risk their incomes should they become too ill or injured to work3.
- One in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age4.
Employers can also boost disability coverage participation by taking an active approach. With active enrollment, employees must respond with a yes or no to all benefits being made available. This leads to higher participation rates and provides employers an opportunity to inform their employees of new policies or coverage plans. It also helps employees ensure their coverage matches their current family situation and needs for the year.
Unum Group (www.unum.com) is a leading provider of financial protection benefits in the United States and the United Kingdom. Its primary businesses are Unum US, Colonial Life, and Unum UK. Unum’s portfolio includes disability, life, accident and critical illness, dental and vision coverage, which help protect millions of working people and their families in the event of an illness or injury. Unum also provides stop-loss coverage to help self-insured employers protect against unanticipated medical costs. The company reported revenues of $11.3 billion in 2017 and provided nearly $7 billion in benefits.
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1 American Payroll Association, National Payroll Week 2017 “Getting Paid in America” Survey, 2017.
2 Consumer Federation of America and Unum, “Employee Knowledge and Attitudes About Employer-Provided Disability Insurance” (2012).
3 LIMRA, “Keeping Up With the Times” (2015). Mean participation for voluntary short-term disability coverage.
4 Social Security Administration, Disability and Death Probability Tables for Insured Workers Born in 1997, Table A.