Government signals support of automatic enrollment for disability insurance

Department of Labor’s information letter underscores importance of financial protection

CHATTANOOGA, Tenn. (Dec. 6, 2018) – An information letter issued Dec. 4 by the U.S. Department of Labor reinforces the value of automatic enrollment by reaffirming its applicability for disability insurance.

“Enrolling employees in disability insurance on an opt-out basis can help nudge them in the right direction while preserving their freedom to choose,” said Martin McGuinness, vice president of Government Affairs at Unum. “It also lessens the burden on the taxpayer funded safety net, while protecting the finances, families, and futures of millions of people.”

The Department of Labor issues information letters to call attention to well established principles or interpretations. In this case, it clarifies that businesses can automatically enroll employees in benefits like disability insurance.

Auto-enrollment defaults employees into disability coverage, while also giving them the choice to opt out. It follows the popular enrollment model with retirement plans, designed to help employees strengthen their financial foundations.

It’s also a model that works. According to Vanguard research, when auto-enrollment is used with retirement plans, it’s been shown to double the number of employees who participate.

Years of research shows employees need and want disability coverage – but they neglect to enroll.

  • Seventy-one percent of Americans would find it somewhat or very difficult to meet current financial obligations if their paycheck were delayed by one week1.
  • Even more (88 percent) think employers should offer disability insurance that could help protect their finances if they were unable to earn a paycheck due to sickness or injury.2
  • Fifty-six percent of workers even say they'd pay the full premium.2
  • Yet only 26 percent of workers actually sign up for disability insurance, so the majority risk their incomes should they become too ill or injured to work.3
  • One in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach the normal retirement age.4

“The Information Letter clarifies existing law meant to encourage employers to offer meaningful benefits to their employees,” said McGuinness. “Many workers underestimate the risk of becoming disabled and overestimate how much they can expect from assistance programs during difficult times, making disability insurance an especially important consideration.”

[1] American Payroll Association, National Payroll Week 2017 “Getting Paid in America” Survey, 2017.

[2] Consumer Federation of America and Unum, "Employee Knowledge and Attitudes About Employer-Provided Disability Insurance" (2012).

[3] LIMRA, "Keeping Up With the Times" (2015). Mean participation for voluntary short-term disability coverage.

[4] Social Security Administration, Disability and Death Probability Tables for Insured Workers Born in 1997, Table A.


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About Unum Group

Unum Group (NYSE: UNM), an international provider of workplace benefits and services, has been helping workers and their families for 175 years. Through its Unum and Colonial Life brands, the company offers disability, life, accident, critical illness, dental, vision and stop-loss insurance; leave and absence management support and behavioral health services. In 2022, Unum reported revenues of about $12 billion and paid $8 billion in benefits. The Fortune 500 company is one of the 2023 World’s Most Ethical Companies, recognized by Ethisphere®. 

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