2nd Quarter 2008
Indexing vs COLA: What’s the Difference?
It’s easy to confuse the concepts of indexing predisability earnings and cost-of-living adjustments (COLA). When discussing these two similar concepts with clients, keep these basic differences in mind: Predisability earnings are “indexed,” or adjusted for purposes of calculating Long Term Disability (LTD) insurance benefits and determining benefit eligibility. COLAs are added to a disabled employee’s net LTD benefit.
read moreHow Interest Rates Affect LTD Pricing
In the wake of the subprime mortgage loan and credit crisis, interest rates have dropped to their lowest levels since 2003. That means insurers are experiencing diminished returns when investing the premiums they collect. So what does that mean for LTD insurance pricing? A good general guideline to go by is something we call the 4-to-1 Rule. The rule states that a 1% change in interest rates generally results in a 4% change in LTD rates in the opposite direction. For example, if interest rates drop 1%, LTD rates need to rise 4% to offset the lower investment returns.
read moreDoes Network Size Really Matter?
Determining dental network size can be confusing because different companies use different counting methods. So, how do dental carriers count the number of providers in their networks, and when should you focus on the different numbers?
read more3 Questions to Ask Carriers About SSDI Referrals
Some recent news reports suggest that disability insurance companies are overwhelming the Social Security Administration with applications for Social Security Disability Insurance (SSDI). Lawsuits have been filed against some carriers alleging that their practices force many people who file disability claims with them to also apply for SSDI benefits — even if they clearly do not qualify for the government program.
read moreProducer Connection is a quarterly online newsletter for Employee Benefits producers of The Standard.
Bookmarks
CDA White Paper: Risking Retirement Security
The Council for Disability Awareness recently released a white paper addressing the lack of awareness of the impact an unexpected injury or illness can have on retirement savings. In “Worker Disability: A Growing Risk to Retirement Security,” council President Robert Traylor says that many employers have steadily shifted costs and responsibility for financial and health planning to a workforce that does not adequately understand and plan for the risks they face.
Answers to Employment Law Questions
The U.S. Department of Labor’s FirstStep Employment Law Advisor is designed to help employers determine which federal employment laws apply to their business, what recordkeeping and reporting requirements they need to comply with and which posters they need to display in their place of business. The information can also be printed as a reference guide.
LTD Claims Survey
The Council for Disability Awareness recently released its 2007 LTD Claims Survey, which includes analysis of primary LTD claims survey data from council-member companies and selected SSDI worker-disability data. Two trends that emerged from the third-annual survey were continued growth of LTD claims and a decline in the percentage of applicants for SSDI benefits who receive awards.