Approximately one third of employers offer employer sponsored group disability insurance to their employees. Participation tends to be greater among the larger sponsoring employers who have one hundred or more employees. Employees evaluating a benefit package (as well as employees already covered under a group disability insurance arrangement) would do well to review and understand basic provisions which are described below.

Eligibility
While NAIC guidelines do not require a minimum group size as a condition for eligibility, most states require a minimum number of eligible participants for an employer to be able to offer a group plan. Full time and active employment typically constitutes eligibility. As to eligible groups, they must be natural groups, formed for any reason other than for the procurement of insurance. The number of hours required per week in satisfaction of this requirement may vary by employer.

Additionally, some employers may require the completion of a probationary or waiting period for new employees for a period of thirty to ninety days before they may enroll in the plan. The enrollment period of typically thirty one days follows, allowing the newly eligible employee to sign up for group coverage.

Evidence of insurability may be required if the employee declines enrollment during the initial enrollment period and subsequently decides to join the plan. Once a policy is issued, insurers usually require a certain rate of participation of the group in order for it to keep coverage in force.



Common Features

Related Articles
  1. Financial Advisor

    Group Term Life Insurance: What You Need to Know

    Is group term life insurance really a good deal? What you need to know about employer-sponsored group term life insurance coverage.
  2. Retirement

    6 Benefits You're Required by Law to Offer Your Employees

    Learn about the benefits that a business must offer to employees, such as family and medical leave, as well as various forms of insurance coverage.
  3. Financial Advisor

    Individual vs. Group Health Insurance: What's the Difference?

    The Affordable Care Act requires all Americans to get health insurance through employers or the federal exchange, and differences exist between both channels.
  4. Financial Advisor

    Life Insurance Plans to Help Your Small Business Retain Employees

    How to use and design cash value life insurance plans as an incentive to help attract and retain key employees.
  5. Financial Advisor

    How to Help Clients Navigate Open Enrollment

    With companies trying to pass on more costs to employees, making the right choices during open enrollment is more important than ever.
  6. Taxes

    Tax Credit For Plan Expenses Incurred By Small Businesses

    Determine whether your business is eligible to claim a tax credit for establishing a retirement plan.
  7. Financial Advisor

    How Do Workers' Compensation Benefits Work?

    What you need to know about Workers' Compensation benefits.
  8. Retirement

    SIMPLE IRA Contribution Limits in 2016

    Learn the SIMPLE IRA contribution limits for 2016, with a brief summary of how the plan works, including eligibility and contribution and distribution rules.
  9. Insurance

    Life Insurance as a Bonus Plan for Key Employees

    A Section 162 plan is a life insurance plan provided by an employer to key employees.
  10. Insurance

    Group and Individual Disability Insurance: What You Need to Know

    What you need to know about group and individual disability income coverage.
Frequently Asked Questions
  1. I want to invest my emergency fund to earn interest. What is a relatively safe and liquid investment I can easily withdraw from if disaster struck?

    Be sure you put your emergency money where you'll be able to access it quickly, easily and without penalty.
  2. What is arbitrage?

    Arbitrage is basically buying a security in one market and simultaneously selling it in another market at a higher price, ...
  3. What is the difference between upstream and downstream oil and gas operations?

    The closer to the end user a function or firm is, the further downstream it is said to be. Raw material extraction or production ...
  4. What is the difference between a capital expenditure and a revenue expenditure?

    Capital expenditures represent major investments of capital that a company makes to expand its business and generate additional ...
Trading Center