Short Term Disability

These pages will tell you how your Short Term Disability plan should be designed to get maximum value.

Not only can you control costs with appropriate design, you can actually reduce other disability-related costs. Here are the topics covered in the linked pages:

And Here's How It Saves You Money

You may think that disability is just another cost you have to pay.

It is, but it's more than that. It can be a money-saver for you.

There are two ways in which a short term disability plan can save you money. First, there is the turnover factor, and second, there's the Workers Compensation factor.

How Much Does Turnover Cost You?

It probably costs you MUCH more than you think.

The Department of Labor reports that each position you have to replace, assuming you are a company with under 200 employees, costs you from $6,900 to $34,000 -- click here.

The reason, of course, is cost-effectiveness. The new employee -- line worker or executive -- has to be trained, has to learn the responsibilities of the job, and has to acquire some level of proficiency at the job.

Until that happens, the employee is less effective than average.

While disability isn't the only cause of turnover, it's a part of it. The sooner you can get a person back to work at his regular job, the sooner he brings his level of proficiency back to work for you.

The right Short Term Disability plan can help hold those workers, attract new, quality workers, and -- even if marginally -- help reduce the cost of turnover.

Think About This Statistic

Here's another statistic that ought to give you pause:

Up to 20% (!!) of Workers Compensation claims are filed in the first two work hours -- on Mondays!

Does that speak volumes, or what?

It's a fact that most, or at least many, workers live paycheck-to-paycheck. They can't afford to miss a week, two weeks, or more of work. We're not talking convenience here; we're talking survival.

So when Clyde tears up his knee in Sunday's pick-up softball game, don't you suppose he'll manage to come into work on Monday and just "happen" to have a fall in the first hour?

Trust me. It happens.

What That Means to You, the Employer

And who pays for those Workers Comp claims? You do, that's who. Your mod rate reflects the claims made, and the money comes out of your pocket.

So that argues that it's false economy to NOT have an STD plan. Plus, don't you think that having workers who are financially secure might just make them more productive?

Benefits matter. It's worth getting some disability insurance quotes to see what an STD plan will cost (competitive quotes on disability insurance probably only cost between 1/4 and 1/2 % of total salary).

Evaluate Your Options

BBI Is Here to Help If you think that your current STD plan doesn't meet your needs, or if you'd like to evaluate your costs or design, and you'd like a free overview of your options, click here to have someone at BBI contact you to discuss your plan.

In addition to helping you evaluate costs, we can do a benchmark analysis for you that shows you what your competitors are doing, how they design their plans, and what options are most common.

As you know, Boston Light Source enlisted BBI's services just prior to our insurance carriers' renewal period. We wanted an honest assessment of our current plans and suggestions on how to offer our employees the best benefits package without imposing any financial strain.

After two meetings you presented us with a portfolio of alternative plans compared to our current one. Each plan presented in a clear and consolidated manner with just the facts for us to analyze. The amount of time you saved us is undoubtedly one of the biggest advantages to using your services. Other advantages include:

  • Alternative plan designs offering a wide range of choices and alternative funding approaches.
  • Preventing our old carrier from raising our rates an additional 10% because our growing company exceeded the maximum number of employees allowed.
  • Moving a Principal from a very expensive supplement program to a better, lower-priced plan that cut his personal cost by more than $5,700 a year.
  • Moving the company to a plan that was 4% less than our renewal.
  • All changes were facilitated quickly and efficiently by your team.

We consider the plan changes to be a success and you continue to be our go-to with any questions that come up. Your services are ongoing with free COBRA administration and access to an online HR database tailored to our company. You and your team are knowledgeable, accessible, and a pleasure to work with. Thank you.

Paul L. Chabot, President
Boston Light Source

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