GROUP DISABILITY INSURANCE
What is Group Disability Coverage?
Disabilities often have a significant negative effect on employees’ finances, rendering them unable to work and, therefore, unable to earn an income. A disability may not only make it impossible for an employee to perform their current job, but it also can render it difficult to do other types of work.
Because they can’t work, disabled employees frequently experience a drop in income. In some cases, they can’t earn anything at all. When a New Jersey employer offers group disability insurance, employees have a safeguard against any financial loss that a covered disability may cause.
Group disability coverage is a form of insurance that provides financial assistance if a covered disability impacts an employee’s ability to work. As opposed to individual disability policies, group disability policies insure a group of people, which is often a business, government, or non profit’s employees. The risks associated with insuring the covered individuals are spread out over everyone in the group, which lets insurers keep premiums affordable.
What Disabilities Does Group Disability Insurance Cover?
Every group disability insurance policy has specific criteria that define what disabilities the plan covers. These criteria are fully explained in each plan’s paperwork (which is why it’s important to read all of the documents that a plan comes with).
Generally speaking, whether a disability is covered is dependent on how long an employee has been disabled and whether they’re able to work in occupations outside their field. Some policies also limit how long they provide payments for covered claims.
What Types of Group Disability Policies Are There?
Group disability coverage can be categorized in two different ways.
First, there are short-term group disability policies and long-term policies. Short-term policies typically begin providing payments shortly after an employee becomes disabled, but they only provide payments for a set amount of time. A short-term policy, for example, may only provide payments for a few weeks or months. Long-term policies don’t usually begin paying as quickly, but they may continue making payments for months or years after an employee becomes disabled.
Second, there are income-replacement group disability policies and owner-occupation policies. Income-replacement policies normally are the less-expensive option, but they also provide less protection. These policies will generally only pay on claims when an employee can’t work at all. If an employee is able to take a different job — even one that’s much lower and pays a lot less — income-replacement policies usually won’t provide any payments. Own-occupation policies generally cover employees as long as they’re unable to work in the field they’re trained for. If an employee can still work at a lower-paying job after becoming disabled, an own-occupation policy will likely still make payments on their claim.
There are both short-term and long-term income-replacement policies, and short-term and long-term own-occupation policies.
GROUP HEALTH INSURANCE
What is Group Health Insurance?
Many New Jersey residents get their health insurance coverage through an employer-sponsored plan, and group health coverage often accounts for a significant portion of employees’ compensation packages. For both current employees and prospective employees, whether a business offers group health insurance can make a major difference in how highly they value their jobs. For businesses, providing robust group health coverage can be essential in attracting and keeping top talent.
Group health insurance is a type of health insurance that insures a defined group of people. In most cases, group health policies’ premiums are divided among all covered participants so that high-risk individuals pay the same rates as lower-risk individuals. (Employees may pay different rates depending on whether they want coverage for only themselves, themselves and their partner, or their whole family).
Who Pays a Group Health Policy’s Premiums?
Group health policies are usually made available by businesses, governments, and nonprofit organizations, which offer a policy’s coverage to their employees. The business or other organization sponsoring the policy typically pays a significant portion of the premiums, but employees may also be required to pay for a good percentage of their coverage.
The money that a business or other organization uses to pay for group health policies is far from wasted. Most employees recognize the importance of health insurance and are aware that coverage can be expensive. As long as a business or organization explains the coverage a policy provides, people will generally appreciate the business or organization’s investment in the health of its employees and their families.
(A few other groups may also offer a group health policy. Sometimes coverage is included in membership, and other times it’s offered as an option for members. How premiums are split in these situations varies).
How Much Group Health Coverage Do Businesses Typically Provide?
The amount of group health coverage that New Jersey businesses and organizations offer their employees varies a lot. Some businesses and organizations offer only basic protection, and providing more robust coverage is beyond their budgets. Other businesses and organizations offer lots of coverage, sometimes even providing primary and secondary group health policies. How much coverage a particular business or organization is able to provide often depends on its finances and how skilled, or specialized its employees are.
Are There Different Types of Group Health Policies?
Health insurance policies have many different components that affect how much coverage they provide. Businesses and organizations can look at policies with different deductibles, copays, coinsurances, and other differences to find one that meets their needs while staying within their budget.