SHRM Survey Finds 46% of Employees See Disability Benefits as Important

SHRM Survey Findings: 2013 Employer Perspectives on
Disability Benefits—Carrier Satisfaction/Changes
In collaboration with and commissioned by
MassMutual
September 18, 2013

In collaboration with and commissioned by MassMutual
• The 2013 Employer Perspectives on Disability Benefits survey, which was commissioned by
MassMutual, is a collaboration between the Society for Human Resource Management
and MassMutual.
• The survey was sent to a randomly selected sample of SHRM members from a variety of
industries. A response rate of 10% was achieved with 4,402 responses.
• The main purpose of this research was to gain a better understanding of organizations’
needs and gaps regarding long-term disability and executive benefits. The 2012 data were
collected from a sample including small-, medium- and large-staff-size organizations (see
slide 25).
• The findings are divided in the following topics:
 Base Group Long-Term Disability Plans
 Compensation and Buy-Up Coverage
 Supplemental Plan/Individual Disability Income
 Carrier Satisfaction/Changes
 Executive Group Life Benefits
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013 2
Introduction

• The results of each question are reported by the overall sample, and then, where
applicable, statistically significant differences by organization staff size, industry and region are
included. Only statistically significant differences with a sample size of 25 or more were reported.
• The results are based on respondents who indicated that they were either “extremely
knowledgeable,” “very knowledgeable” or “somewhat knowledgeable” about their
organization’s employee benefits plan. The results include respondents from publicly owned for-
profit or privately owned for-profit organizations only.
Introduction (continued)
Industries Organization Staff Size Region
 Accounting/architectural
 Computer and electronic
products/technology
 Energy, gas, oil
 Financial services
 Health care services
 Information services
 Law firms and legal services
 Manufacturing
 Pharmaceutical and medicine
 Physician and dental offices
 Professional, scientific and
technical services
 Telecommunications
 Utilities
 Wholesale and retail trade
 Other industries
 1 to 99 employees
 100 to 499 employees
 500 to 2,499 employees
 2,500 to 24,999 employees
 25,000 or more employees
 Midwest
 Northeast
 South
 West

Carrier Satisfaction/Future Plan Changes

• How do organizations perceive their long-term disability program? Overall, 60% of
organizations reported their long-term disability program is an “extremely important” or
“very important” element of their organization’s benefits offerings from the perception of
employers. Employees’ opinions of this program are rated slightly lower. Approximately
one-half (46%) of organizations indicated this program is “extremely important” or “very
important” to their employees.
• How frequently do organizations evaluate their long-term disability program? Three-
quarters of organizations reported evaluating their long-term disability program on an
annual basis. Smaller staff-size organizations are more likely than larger organizations to
evaluate their program annually.
 Only 15% of organizations are considering making changes to their program in the
future. Organizations with 500 to 2,499 employees are more likely than organizations
with 1 to 99 employees to consider making changes to their long-term disability
program.
 The most frequently cited reasons for making changes to the program in the future
are shopping the plan to other carriers to obtain cost-efficiencies (58%) and making
changes to benefits offerings (51%).
Key Findings in Carrier Satisfaction/Future Plan Changes

• What changes are organizations considering making to their long-term disability program?
The most frequently cited changes include 1) increasing the benefit amount (46%), 2)
higher monthly maximum (33%), and 3) class of employees with different benefit levels
(21%).
• Are many organizations switching their long-term disability carriers? Over one-third (36%)
of organizations have switched long-term disability carriers in the past three years. Smaller
staff-size organizations are more likely than larger organizations to have switched their
carriers.
 Among those that switched carriers, the top reasons for making the change are 1)
cost of the plan (66%), 2) lower administrative fees (27%), 3) ease of administration
(23%), 4) recommendation of an advisor (22%), and 5) additional features/services
available (21%).
Key Findings in Carrier Satisfaction/Future Plan Changes
(continued)

• HR professionals should strive toward helping their employees recognize the importance of
their long-term disability plan. HR must continually work to educate employees about the
importance of the benefits as employees may not fully understand the role that benefits
play in employee health and financial wellness. Highlighting the value of each benefit that
an organization offers has implications for employee retention and recruitment.
What do these findings mean for HR professionals?

From the employer’s perspective, how important is your group
long-term disability program in your organization’s benefit
offering?
Extremely
important
Very
important
Somewhat
important
Not very
important
Not at all
important
14%
46%
35%
5%
1%
Note: n = 3,533. Only respondents whose organizations offer a group long-term disability plan were asked this question. Respondents who answered
“don’t know” were excluded from this analysis. Percentages do not total 100% due to rounding.

Note: Only statistically significant differences are shown.
From the employer’s perspective, how important is your group
long-term disability program in your organization’s benefits
offering?
Organizations located in the South are more likely than those located in the Midwest and West to report their
group long-term disability program is “extremely important” in their organization’s benefits offering.
Conversely, organizations located in the Midwest compared with organizations located in the South are more
likely to report their group long-term disability program as “somewhat important.”
Comparison by organization demographics
Extremely important South (17%) >
Midwest (12%)
West (11%)
Somewhat important Midwest (37%) > South (31%)

From your employees’ perspective, how important is the long-
term disability program?
Extremely
important
Very
important
Somewhat
important
Not very
important
Not at all
important
13%
33%
42%
11%
1%
“don’t know” were excluded from this analysis.

From your employees’ perspective, how important is the long-
term disability program?
Organizations with 2,500 to 24,999 employees are more likely than those with 100 to 499 employees to report
their group long-term disability program as “extremely important” from their employees’ perspective.
Organizations located in the West compared with those located in the South are more likely to report their
group long-term disability program as “not very important” from their employees’ perspective.
Extremely important 2,500 to 24,999 employees (16%) > 100 to 499 employees (11%)
Not very important West (14%) > South (9%)

How often is your group long-term disability program evaluated
by your benefits broker/benefits firm?
Annually
Biannually
Every three
years
Only when
needed
Other
75%
8%
10%
6%
0%
“don’t know” were excluded from this analysis. Percentages do not total 100% due to rounding.

How often is your group long-term disability program evaluated
by your benefits broker/benefits firm?
Smaller staff-size organizations are more likely than larger organizations to have their benefits broker/benefits
firm evaluate their group long-term disability program annually. Utilities are more likely than wholesale/retail
trade, financial services, manufacturing and other industries to have the program evaluated every three years.
Organization Staff Size Organization Industry
Annually
1 to 99 employees (80%)
100 to 499 employees (79%) >
500 to 2,499 employees (70%)
2,500 to 24,999 employees (69%)
Other industries (78%) >
Utilities (63%)
Every three years
500 to 2,499 employees (13%)
2,500 to 24,999 employees (17%)
25,000 or more employees (13%) >
Utilities (24%) >
Wholesale and retail trade (10%)
Financial services (9%)
Manufacturing (8%)
Other industries (8%)

Are you considering making changes to your long-term disability
program in the future?
Yes
No
15%
85%

Are you considering making changes to your long-term disability
program in the future?
Organizations with 500 to 2,499 employees are more likely than organizations with 1 to 99 employees to
consider making changes to their long-term disability program in the future.
500 to 2,499 employees (19%) > 1 to 99 employees (12%)

Which of the following are the top reasons for making changes to
the long-term disability program in the future?
Shopping the plan to
other carrier to obtain
cost-efficiencies
Changes to benefits
offerings
Changes to
supplement programs
Taxation of the
benefit amount
Self-insuring the plan
Other
58%
51%
27%
12%
6%
6%
Note: n = 345. Only respondents whose organizations offer a group long-term disability plan and are considering making changes to their long-term
disability program were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100%
due to multiple choice options.

Which of the following potential changes are you considering
making to your group long-term disability program in the future?
Percentage
Increasing the benefit amount 46%
Higher monthly maximum 33%
Class of employees with different benefit levels 21%
Changing the treatment of variable compensation 15%
Changing the definition of disability 11%
Employer pays a higher percentage of the premiums 11%
Employer pays a lower percentage of the premiums 10%
Higher replacement percentage 10%
Decreasing elimination/waiting period 7%
Decreasing the benefit amount 5%
Increasing the benefit period 5%
Increasing elimination/waiting period 4%
Decrease in exclusions 3%
Decreasing the benefit period 3%
Lower monthly maximum 3%
Offering an employee buy-up 3%
Increase in exclusions 2%
Lower replacement percentage 1%
Other 7%
Note: n = 297. Only respondents whose organizations offer a group long-term disability plan and are considering making changes to their long-term
disability program were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100%
due to multiple choice options.

Has your organization switched long-term disability carriers in the
past three years?
Yes
No
36%
64%

Has your organization switched long-term disability carriers in the
past three years?
Smaller staff-size organizations are more likely than larger organizations to have switched long-term disability
carriers in the past three years. Information services are more likely than the utilities industry to have switched
disability carriers in the past three years.
500 to 2,499 employees (40%)
>
2,500 to 24,999 employees (28%)
25,000 or more employees (20%)
1 to 99 employees (35%) > 25,000 or more employees (20%)
Information services (49%) > Utilities (28%)

What prompted the carrier change?
Cost of plan
Lower administrative fees
Ease of administration
Recommendation of an advisor
Additional features/services available
Carrier offering was not competitive
Plan flexibility
Recommendation of Board/Senior…
Ease of understanding plan
Better customer service
Performance of investment funds
Corporate merger
Other
66%
27%
23%
22%
21%
15%
6%
4%
3%
3%
1%
1%
4%
Note: n = 1,123. Only respondents whose organizations offer a group long-term disability plan and have switched long-term disability carriers in the past
three years were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100% due to
multiple response options.

What prompted the carrier change?
Smaller staff-size organizations are more likely than larger organizations to switch carriers due to the cost of the
plan. Larger staff-size organizations are more likely than smaller organizations to switch carriers due to ease of
administration and lower administration fees.
Cost of plan
500 to 2,400 employees (67%)
> 2,500 to 24,999 employees (51%)
Ease of administration 2,500 to 24,999 employees (33%) > 1 to 99 employees (16%)
Lower administrative
fees
500 to 2,499 employees (35%)
2,500 to 24,999 employees (39%)
> 1 to 99 employees (16%)
2,500 to 24,999 employees (39%) > 100 to 499 employees (25%)

Demographics

Approximately what percentage of regular, full-time and part-
time employees are eligible for employee benefits at your
organization?
Less
than
25%
25% to
49%
50% to
59%
60% to
69%
70% to
79%
80% to
89%
90% to
99%
100%
Full-time
Employees
(n = 4,182)
1% 1% 1% 1% 2% 4% 12% 78%
Part-time
Employees
(n = 3,470)
66% 3% 5% 1% 2% 3% 4% 16%

Which of the following is closest to your job title?
Manager
Generalist
Director
Chief Human Resource Officer
Vice President
Administrator
Supervisor
Associate Director
Specialist
Associate Vice President
Senior Vice President
Analyst
Chief Executive Officer
President
Chief Human Capital Officer
Senior Executive Vice President
Executive Vice President
Other
32%
23%
19%
9%
6%
2%
1%
1%
1%
1%
1%
1%
0%
0%
0%
0%
0%
3%
n = 4,394

Demographics: Organization Staff Size
1 - 99
employees
100 - 499
employees
500 - 2,499
employees
2,500 - 24,999
employees
25,000 or
more
employees
25%
33%
18%
17%
7%
n = 4,382

Demographics: Organization Profit Status
Privately
owned for-
profit
Publicly
owned for-
profit
72%
28%
n = 4,402

Demographics: Organization Region
Midwest
South
West
Northeast
35%
26%
22%
17%
n = 4,106

Demographics: Organization Industry
Percentage
Manufacturing 16%
Wholesale and Retail Trade 14%
Financial services A
10%
Professional, Scientific and Technical Services 8%
Energy, Gas, Oil B
6%
Telecommunications 6%
Accounting / Architectural C
4%
Computer and Electronic Products/Technology D
4%
Health Care Services E
4%
Utilities 4%
Information Services F
3%
Pharmaceutical and Medicine G
2%
Law Firms and Legal Services 2%
Physician and Dental Offices 1%
Other industries 16%
n = 4,402
A Includes Banks, Insurance Companies, Securities and Commodities, Other Finance and Insurance Services categories.
B Includes Energy Extraction and Refining, Gas and Oil, and Other Oil, Gas, and Energy Extraction and Refining categories.
C Includes Accounting, Tax, Payroll Services and Architectural, Engineering categories.
D In the survey labeled as Manufacturing: Computer and Electronic Products/Technology.
E Includes Hospitals and Other Health Care Services categories.
F Includes Publishing, Motion Picture, Broadcasting (except Internet) and Other Information Services categories.
G In the survey labeled as Manufacturing: Pharmaceutical and Medicine category.

U.S.-based operations only 66%
Multinational operations 34%
Single-unit organization: An organization
in which the location and the
organization are one and the same.
26%
Multi-unit organization: An organization
that has more than one location.
74%
Multi-unit headquarters determines HR
policies and practices
64%
Each work location determines HR policies
and practices
4%
A combination of both the work location
and the multi-unit headquarters determines
HR policies and practices
33%
Is your organization a single-unit organization or
a multi-unit organization?
For multi-unit organizations, are HR policies and
practices determined by the multi-unit headquarters, by
each work location or by both?
Does your organization have U.S.-
based operations (business units)
only, or does it operate
multinationally?
n = 4,387 n = 4,398
Note: n = 3,410. Percentages do not equal 100% due to rounding.
Corporate (companywide) 74%
Business unit/division 15%
Facility/location 11%
n = 3,407
What is the HR department/function for
which you responded throughout this
survey?
Demographics: Other

• Response rate = 10%
• 4,402 HR professional respondents from a randomly selected sample of a
variety of industries in SHRM’s membership
• Margin of error +/- 2%
• Survey fielded: July 10, 2012 to August 3, 2012
SHRM Survey Findings: 2013 Employer Perspectives on
Disability Benefits—Carrier Satisfaction/Changes
Survey Methodology

31Disability and Executive Benefits Survey ©SHRM 2012
About MassMutual
Founded in 1851, MassMutual is a leading mutual life insurance company that is
run for the benefit of its members and participating policyholders. The company
has a long history of financial strength and strong performance, and although
dividends are not guaranteed, MassMutual has paid dividends to eligible
participating policyholders every year since the 1860s. With whole life insurance
as its foundation, MassMutual provides products to help meet the financial needs
of clients, such as life insurance, disability income insurance, long term care
insurance, retirement/401(k) plan services, and annuities. In addition, the
company’s strong and growing network of financial professionals helps clients
make good financial decisions for the long-term.

About SHRM
The Society for Human Resource Management (SHRM) is the world’s largest
association devoted to human resource management. Representing more than
250,000 members in over 140 countries, the Society serves the needs of HR
professionals and advances the interests of the HR profession. Founded in
1948, SHRM has more than 575 affiliated chapters within the United States and
subsidiary offices in China and India.

• For more survey/poll findings, visit www.shrm.org/surveys
• For more information about SHRM’s Customized Research Services, visit
www.shrm.org/customizedresearch
• Follow us on Twitter @SHRM_Research
About SHRM Research

SHRM Survey Finds 46% of Employees See Disability Benefits as Important

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (20)

Similaire à SHRM Survey Finds 46% of Employees See Disability Benefits as Important

Similaire à SHRM Survey Finds 46% of Employees See Disability Benefits as Important (20)

Plus de shrm

Plus de shrm (14)

Dernier

Dernier (20)

SHRM Survey Finds 46% of Employees See Disability Benefits as Important