Sun Life Helps Employers Auto-Enroll Employees in Disability Insurance

Sun Life US is helping clients automatically enroll employees in disability coverage, increasing population coverage and income protection for workers. Auto-enrollment increases the likelihood of employees having disability coverage when they need it. According to the Social Security Administration, more than one in four people currently entering the workforce can expect a disabling condition to put them out of work for at least 12 months before they reach retirement age.

“Most people in America are underinsured. Disability coverage provides an extra layer of income protection that helps people maintain financial security when they have to go on leave from work,” said David Healy, senior vice president of Group Benefits at Sun Life Financial U.S. “Implementing an auto-enrollment option for disability insurance will increase coverage among workforce populations and help alleviate financial burdens for people dealing with a major health event.”

According to research from the Federal Reserve, about half of Americans don’t have enough savings to cover three months of expenses in the event of income loss, and could not cover an unexpected expense of just $400.

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A recent survey by Sun Life showed that employers and employees value the safety net that automatic enrollment provides, especially since some employees may wish they had chosen it during enrollment season when they had the opportunity. Of the 35 percent of employee respondents who do not currently have disability coverage, 76 percent say they believe the benefit has value.

With Sun Life, employers can enroll their workers in short- or long-term disability coverage, with the option for employees to buy higher levels coverage if they choose. Sun Life’s program recommends a multi-touchpoint communication plan that educates employees on the value of disability and auto-enrollment, and outlines the process for opting out.

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During a recent webinar on auto-enrollment, Sun Life and the Disability Management Employers Coalition (DMEC) polled more than 400 employers on whether they currently auto-enroll employees in a 401k or other income savings plan.  About half of the employer respondents said no, indicating a large opportunity to help cover more people and automate some HR tasks.

While health insurance covers certain medical expenses, taking leave from work may add a financial burden when a person is recovering from illness or injury. Along with having income replacement that helps close the insurance coverage gap, Sun Life disability members receive support from case managers and vocational rehabilitation counselors who can help with workplace accommodations or job retraining, providing a path to return to work.

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