When people think of employee benefits, the first thing they usually think of is health insurance because it protects them and their family from exorbitant medical bills which could deplete their family’s nest egg and possibly force them into bankruptcy.

It’s common to hear either, “My health insurance is really good,” or, “My health insurance sucks.”

You rarely hear, “I’ve got a great long-term disability plan!”

It’s rare because either their employer does not offer it OR there is a plan, but it is so poorly communicated that the employee either does not know it’s in place or does not know how the plan works.

Why it’s important?

Disability Insurance protects a worker’s most important asset – their ability to earn a living. According to The Council for Disability Awareness, 90 percent of wage earners rated their ability to earn an income as valuable or very valuable in helping them achieve long-term financial security – wage earners perceive their ability to earn an income as even more valuable than retirement savings, medical insurance, personal possessions, other forms of savings or even the value of their homes.

What should an employee do?

Educate yourself on the disability benefits that are there for you. Know how the California disability system works (http://www.edd.ca.gov/disability/SDI_Online.htm) and know if your employer offers a Long Term Disability plan. If your employer offers a program, find out what your benefit is, when the benefit would start after a disability has occurred and how it integrates with State Disability.

What should an employer do?

If you are currently offering a Long Term Disability plan, communicate that information in a way that is understood and appreciated. Make sure your employee wages have been properly reported to your insurance carrier in order to ensure that a claimant is paid the benefit that is entitled to them. If you do not have a Long Term Disability program in place, I strongly encourage you to contact your benefits broker.

Long-term Disability is a low-cost benefit and I would argue that it is more important than dental or vision insurance. While many believe “it will never happen to me,” it is estimated that just over 1 in 4 of today’s 20 year-olds will become disabled before they retire.

Andrew McNeil is a principal with Arrow Benefits Group (arrowbenefitsgroup,com), a benefits consulting and brokerage company in Petaluma.