Simple Ways Your Firm Can Get the Most Out of Disability Benefits
The benefits your firm offers are integral to the satisfaction of your attorneys and staff. They play a significant role in recruiting the best of the best and keeping them on your team now and in the future. Disability benefits are a vital part of the benefit mix.
When it comes to income, many attorneys have a lot to protect, not to mention the potential of future earnings. That’s what disability insurance is all about — providing income protection for those times when someone is unable to work due to injury or illness.
EARNING INCOME WHEN YOU’RE NOT EARNING FEES
Private practice attorneys work as service professionals, with clients and fees. So when an attorney is unable to work because of an illness or injury, it’s hard to continue to generate income. That’s why it’s important to offer disability insurance — which acknowledges the inability to earn an income — as opposed to waiting for income from services that were provided prior to the disability to eventually drop off over time.
Many long-term disability policies include what’s often referred to as extended earnings protection, which can supplement an attorney’s income when they’re back to work. In addition to covering time not at work, this feature usually continues to pay a benefit for several months if the returning employee’s income is below certain predisability levels. Check your disability policy to make sure it includes this coverage, which is especially valuable for attorneys.
PROTECTION FOR DIFFERENT AREAS OF PRACTICE
Attorneys’ duties differ by area of expertise. For example, a patent attorney doesn’t perform the same duties as a trial attorney. A family attorney’s day-to-day tasks differ from a corporate attorney’s.
Ensuring your non-attorney population has an appropriate disability program is very important, as well. However, their needs may not be the same as attorneys, so make sure you’re thinking through their unique needs as well.
If an attorney is highly specialized or practices in a niche market, consider upgrading the disability contract’s definition of own occupation to own occupation for attorneys, commonly referred to as own specialty. A specialty own occupation definition of disability protects attorneys by evaluating them based on their ability or inability to perform in the specialty area of law they’re working in when the disability begins.
COVERAGE FOR NON-ATTORNEYS
Ensuring your non-attorney population has an appropriate disability program is very important, as well. However, their needs may not be the same as attorneys, so make sure you’re thinking through their unique needs as well. Consider offering both short-term and long-term disability coverage to non-attorneys to help cover their income replacement needs.
A popular benefit design is offering short-term disability coverage for six months, followed by long-term disability benefits that pay to retirement age. This provides comprehensive coverage for your teams and can be more affordable than you think.
COORDINATING DISABILITY WITH PAID LEAVE
Many times, disability and paid leave programs — such as sick pay and personal time off (PTO) — can overlap with each other. It’s important to review what your firm offers for paid leave and then coordinate that with your disability offering.
For example, some firms require employees who file a disability claim to take a week of paid leave before the disability benefits kick in. This is the policy’s elimination period. So it actually doesn’t make sense for those firms to offer a policy that starts disability benefits on day one of the claim. A one-week wait would be more appropriate in those situations.
Tweaks like this help support a more balanced approach where your firm complements paid leave with disability benefits.
EVALUATING HOW DISABILITY BENEFITS ARE SET UP
Every law firm is different. Is yours a partnership, with one or more people who own and operate it? Are there several partners with a range of associates? Do you have multiple generations working within the firm?
Offering quality benefits helps grow loyalty to your firm. But be certain to offer benefits that meet the needs of your entire associate and staff population, not just one or two owners or partners. For example, you could set up a maximum benefit that meets the needs of your entire attorney population, and then for partners, consider offering an individual disability policy to help fill any income gaps. As the makeup of your firm changes, assess the benefits you offer against evolving needs to ensure you’re providing coverage that works for the masses, not the few.
The bottom line? It’s important to stay on top of your disability insurance offering. Don’t be afraid to fine-tune your benefits — with the help of your adviser — to better meet your needs, be more cost-effective, and boost recruiting and retention for your firm.
ABOUT THE AUTHOR
Jim Wrage is Managing Vice President, Group Benefits Distribution at Principal. He joined Principal in 1990, and has served the company in California, New Jersey and several Midwestern states. Wrage is based at the company’s home office in Des Moines, Iowa.Email