PRUDENTIAL RESEARCH SPOTLIGHT DISABILITY MARKET TRENDS

PRUDENTIAL RESEARCH SPOTLIGHT
DISABILITY MARKET TRENDS
Recent research conducted by The Prudential Insurance Company of America
(Prudential) reveals key trends in the absence and disability industry and how
employers are addressing their employee benefit challenges. Among the findings
are trends in outsourcing, disability plan funding, service expectations, and
voluntary disability.
More employers are offering disability insurance.1
Short Term Disability
Long Term Disability
77% 85%
74% 82%
Employers do their
part to help employees
protect their paychecks
by offering disability
insurance.
2012
2013
2012
Most employers outsource disability to an insurance carrier.2
3 OF 4
4 OF 5
of employers
outsource STD.
of employers
outsource LTD.
Who currently provides your group disability benefits?
Insurance Company
TPA
Payroll Provider
Other Vendor
Group STD
77%
66
6
3 2
Group LTD
85%
75
0263524-00001-00
Employer size has little-to-no impact on provider preference.
5
2 3
2013
When asked what factors drive selection of a
group disability benefits vendor, employers rated
services that ease their administrative burden
as critical or very important over other factors.
Employers want more value with less effort.2
Employer Top Three Criteria for Selecting a Disability Vendor*
92%
82%
High quality
service to you
and employees.
74%
Accurate and
easy billing.
Minimizing HR
effort to manage
disability program.
*Critical/Very Important
To insure or self-insure?2
3 out of 4
Employers Who Self-Insure STD
However, the tendency to
self-insure increases as
employer size increases.
employers chose insured Short Term Disability (STD)
benefits over self-insuring.
58%
44%
20%
1,000 9,999
> 10,000
< 1,000
Emerging trend: Voluntary Disability.2
Current Disability Funding
26%
Employer Paid
Shared Funding
Employee Paid
Employer Paid Base/
Employee Paid Buy-up
53%
7%
47%
of employers ask
their employees to
contribute to STD.
14%
15%
42%
of employers ask
their employees to
contribute to LTD.
Employers currently providing non-contributory
disability that anticipate shifting to voluntary
coverage (employees pay all or part of premium)
in the next three years.
1 Prudential’s Eighth Annual Study of Employee Benefits: Today & Beyond. 2013.
2 Study of Disability Market, conducted by Greenwald on Prudential’s behalf, 2013.
© 2014 Prudential Financial, Inc. and its related entities.
Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
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