Just half of Canadian employers said they’ve adopted a formal policy to clearly communicate their approach to disability benefits in the event of a conflict, according to a new survey by Aon.
The survey, which was conducted before the coronavirus pandemic, asked Canadian employers about the disability benefits they’re offering to their employees and how those benefits are funded and administered. It found 52 per cent of respondents said they have a policy to address benefits during periods of disability.
Looking at specific benefits, 95 per cent of survey respondents said they offer long-term disability benefits, 49 per cent offer short-term disability, 45 per cent offer salary continuance and 17 per cent offer weekly indemnity.
In addition, where employers offer LTD benefits, 51 per cent offer the same benefit to all employees, while 49 per cent offer a benefit that differs by employee group. For STD benefits, this breaks down into 46 per cent and 54 per cent, respectively.
The survey also found 45 per cent of employers require employees to contribute to health and dental plans, with disabled members contributing at the same dollar amount as active employees. About a fifth (22 per cent) require contributions from active employees, but waive contributions for plan members on disability. Five per cent require contributions, with disabled members contributing at a different dollar amount than active employees. And 28 per cent require no cost-sharing for either active or disabled plan members.
Among employers that provide income replacement under an STD plan, 60 per cent said they pay the benefit indirectly through a third party. The remaining 40 per cent issue the benefit through regular payroll, though just under half (45 per cent) of that group have claims adjudicated by a third party.
“Employers may need to make difficult decisions about whether benefits continue or cease for permanently disabled employees, and indeed, about the employment relationship itself,” noted the survey. “The entire situation must be considered, including all documentation and undertakings that may apply. An employer’s approach should be guided by a clear policy that is applied evenly to the employees who fall within its boundaries.”