The insurance industry has proposed allowing employers to automatically enroll their workers in private disability coverage — at the employees’ expense — while giving them the choice to opt out. Although industry-financed studies claim this would save money for Social Security Disability Insurance (SSDI), it might have the opposite impact, a new paper by disability expert Lisa Ekman for CBPP’s Policy Futures initiative explains. It also could disadvantage many newly covered workers unless accompanied by robust consumer protections.
Here’s why policymakers should be cautious about the proposal:
In fact, expanding private disability coverage could encourage more people to apply for SSDI by making it easier for disabled workers to get through SSDI’s five-month waiting period.
Most workers covered by PLTDI have higher-paid, skilled jobs that tend to require more education. In contrast, SSDI beneficiaries are likelier to have held lower-paid jobs and have below-average educational attainment. Although private insurers provide services to help individuals who become disabled stay at or return to work — typically in the same company — the services that are effective for educated, skilled, full-time workers may not succeed for a larger pool of enrollees.
Check out the full analysis here.