1. In collaboration with and commissioned by MassMutual
SHRM Survey Findings: 2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes
In collaboration with and commissioned by MassMutual
September 18, 2013

2. Introduction
The 2013 Employer Perspectives on Disability Benefits survey, which was commissioned by MassMutual, is a collaboration between the Society for Human Resource Management and MassMutual.
The survey was sent to a randomly selected sample of SHRM members from a variety of industries. A response rate of 10% was achieved with 4,402 responses.
The main purpose of this research was to gain a better understanding of organizations’ needs and gaps regarding long-term disability and executive benefits. The 2012 data were collected from a sample including small-, medium- and large-staff-size organizations (see slide 25).
The findings are divided in the following topics:
Base Group Long-Term Disability Plans
Compensation and Buy-Up Coverage
Supplemental Plan/Individual Disability Income
Carrier Satisfaction/Changes
Executive Group Life Benefits
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

3. Introduction (continued)
The results of each question are reported by the overall sample, and then, where applicable, statistically significant differences by organization staff size, industry and region are included. Only statistically significant differences with a sample size of 25 or more were reported.
The results are based on respondents who indicated that they were either “extremely knowledgeable,” “very knowledgeable” or “somewhat knowledgeable” about their organization’s employee benefits plan. The results include respondents from publicly owned for-profit or privately owned for-profit organizations only.
Industries
Organization Staff Size
Region
Accounting/architectural
Computer and electronic products/technology
Energy, gas, oil
Financial services
Health care services
Information services
Law firms and legal services
Manufacturing
Pharmaceutical and medicine
Physician and dental offices
Professional, scientific and technical services
Telecommunications
Utilities
Wholesale and retail trade
Other industries
1 to 99 employees
100 to 499 employees
500 to 2,499 employees
2,500 to 24,999 employees
25,000 or more employees
Midwest
Northeast
South
West
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

4. Carrier Satisfaction/Future Plan Changes
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

5. Key Findings in Carrier Satisfaction/Future Plan Changes
How do organizations perceive their long-term disability program? Overall, 60% of organizations reported their long-term disability program is an “extremely important” or “very important” element of their organization’s benefits offerings from the perception of employers. Employees’ opinions of this program are rated slightly lower. Approximately one-half (46%) of organizations indicated this program is “extremely important” or “very important” to their employees.
How frequently do organizations evaluate their long-term disability program? Three-quarters of organizations reported evaluating their long-term disability program on an annual basis. Smaller staff-size organizations are more likely than larger organizations to evaluate their program annually.
Only 15% of organizations are considering making changes to their program in the future. Organizations with 500 to 2,499 employees are more likely than organizations with 1 to 99 employees to consider making changes to their long-term disability program.
The most frequently cited reasons for making changes to the program in the future are shopping the plan to other carriers to obtain cost-efficiencies (58%) and making changes to benefits offerings (51%).
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

6. Key Findings in Carrier Satisfaction/Future Plan Changes (continued)
What changes are organizations considering making to their long-term disability program? The most frequently cited changes include 1) increasing the benefit amount (46%), 2) higher monthly maximum (33%), and 3) class of employees with different benefit levels (21%).
Are many organizations switching their long-term disability carriers? Over one-third (36%) of organizations have switched long-term disability carriers in the past three years. Smaller staff-size organizations are more likely than larger organizations to have switched their carriers.
Among those that switched carriers, the top reasons for making the change are 1) cost of the plan (66%), 2) lower administrative fees (27%), 3) ease of administration (23%), 4) recommendation of an advisor (22%), and 5) additional features/services available (21%).
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

7. What do these findings mean for HR professionals?
HR professionals should strive toward helping their employees recognize the importance of their long-term disability plan. HR must continually work to educate employees about the importance of the benefits as employees may not fully understand the role that benefits play in employee health and financial wellness. Highlighting the value of each benefit that an organization offers has implications for employee retention and recruitment.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

8. From the employer’s perspective, how important is your group long-term disability program in your organization’s benefit offering?
Note: n = 3,533. Only respondents whose organizations offer a group long-term disability plan were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100% due to rounding.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

9. Comparison by organization demographics
From the employer’s perspective, how important is your group long-term disability program in your organization’s benefits offering?
Organizations located in the South are more likely than those located in the Midwest and West to report their group long-term disability program is “extremely important” in their organization’s benefits offering. Conversely, organizations located in the Midwest compared with organizations located in the South are more likely to report their group long-term disability program as “somewhat important.”
Comparison by organization demographics
Extremely important
South (17%)
>
Midwest (12%)
West (11%)
Somewhat important
Midwest (37%)
South (31%)
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

10. From your employees’ perspective, how important is the long-term disability program?
Note: n = 3,527. Only respondents whose organizations offer a group long-term disability plan were asked this question. Respondents who answered “don’t know” were excluded from this analysis.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

11. Comparison by organization demographics
From your employees’ perspective, how important is the long-term disability program?
Organizations with 2,500 to 24,999 employees are more likely than those with 100 to 499 employees to report their group long-term disability program as “extremely important” from their employees’ perspective. Organizations located in the West compared with those located in the South are more likely to report their group long-term disability program as “not very important” from their employees’ perspective.
Comparison by organization demographics
Extremely important
2,500 to 24,999 employees (16%)
>
100 to 499 employees (11%)
Not very important
West (14%)
South (9%)
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

12. How often is your group long-term disability program evaluated by your benefits broker/benefits firm?
Note: n = 3,183. Only respondents whose organizations offer a group long-term disability plan were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100% due to rounding.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

13. How often is your group long-term disability program evaluated by your benefits broker/benefits firm?
Smaller staff-size organizations are more likely than larger organizations to have their benefits broker/benefits firm evaluate their group long-term disability program annually. Utilities are more likely than wholesale/retail trade, financial services, manufacturing and other industries to have the program evaluated every three years.
Comparison by organization demographics
Organization Staff Size
Organization Industry
Annually
1 to 99 employees (80%)
100 to 499 employees (79%) >
500 to 2,499 employees (70%)
2,500 to 24,999 employees (69%)
Other industries (78%) >
Utilities (63%)
Every three years
500 to 2,499 employees (13%)
2,500 to 24,999 employees (17%)
25,000 or more employees (13%) >
1 to 99 employees (5%)
100 to 499 employees (7%)
Utilities (24%) >
Wholesale and retail trade (10%)
Financial services (9%)
Manufacturing (8%)
Other industries (8%)
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

14. Are you considering making changes to your long-term disability program in the future?
Note: n = 2,342. Only respondents whose organizations offer a group long-term disability plan were asked this question. Respondents who answered “don’t know” were excluded from this analysis.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

15. Comparison by organization demographics
Are you considering making changes to your long-term disability program in the future?
Organizations with 500 to 2,499 employees are more likely than organizations with 1 to 99 employees to consider making changes to their long-term disability program in the future.
Comparison by organization demographics
500 to 2,499 employees (19%)
>
1 to 99 employees (12%)
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

16. Which of the following are the top reasons for making changes to the long-term disability program in the future?
Note: n = 345. Only respondents whose organizations offer a group long-term disability plan and are considering making changes to their long-term disability program were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100% due to multiple choice options.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

17. Which of the following potential changes are you considering making to your group long-term disability program in the future?
Percentage
Increasing the benefit amount
46%
Higher monthly maximum
33%
Class of employees with different benefit levels
21%
Changing the treatment of variable compensation
15%
Changing the definition of disability
11%
Employer pays a higher percentage of the premiums
Employer pays a lower percentage of the premiums
10%
Higher replacement percentage
Decreasing elimination/waiting period 7%
Decreasing the benefit amount 5%
Increasing the benefit period
Increasing elimination/waiting period 4%
Decrease in exclusions 3%
Decreasing the benefit period
Lower monthly maximum
Offering an employee buy-up
Increase in exclusions 2%
Lower replacement percentage 1%
Other
Note: n = 297. Only respondents whose organizations offer a group long-term disability plan and are considering making changes to their long-term disability program were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100% due to multiple choice options.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

18. Has your organization switched long-term disability carriers in the past three years?
Note: n = 3,370. Only respondents whose organizations offer a group long-term disability plan were asked this question. Respondents who answered “don’t know” were excluded from this analysis.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

19. Comparison by organization demographics Information services (49%)
Has your organization switched long-term disability carriers in the past three years?
Smaller staff-size organizations are more likely than larger organizations to have switched long-term disability carriers in the past three years. Information services are more likely than the utilities industry to have switched disability carriers in the past three years.
Comparison by organization demographics
100 to 499 employees (41%)
500 to 2,499 employees (40%)
>
2,500 to 24,999 employees (28%)
25,000 or more employees (20%)
1 to 99 employees (35%)
Information services (49%)
Utilities (28%)
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

20. What prompted the carrier change?
Note: n = 1,123. Only respondents whose organizations offer a group long-term disability plan and have switched long-term disability carriers in the past three years were asked this question. Respondents who answered “don’t know” were excluded from this analysis. Percentages do not total 100% due to multiple response options.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

21. What prompted the carrier change?
Smaller staff-size organizations are more likely than larger organizations to switch carriers due to the cost of the plan. Larger staff-size organizations are more likely than smaller organizations to switch carriers due to ease of administration and lower administration fees.
Comparison by organization demographics
Cost of plan
1 to 99 employees (67%)
100 to 499 employees (71%)
500 to 2,400 employees (67%)
>
2,500 to 24,999 employees (51%)
Ease of administration
2,500 to 24,999 employees (33%)
1 to 99 employees (16%)
Lower administrative fees
100 to 499 employees (25%)
500 to 2,499 employees (35%)
2,500 to 24,999 employees (39%)
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

22. Demographics
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

23. Approximately what percentage of regular, full-time and part-time employees are eligible for employee benefits at your organization?
Less than 25%
25% to 49%
50% to 59%
60% to 69%
70% to 79%
80% to 89%
90% to 99%
100%
Full-time Employees
(n = 4,182) 1% 2% 4%
12%
78%
Part-time Employees
(n = 3,470)
66% 3% 5%
16%
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

24. Which of the following is closest to your job title?
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

25. Demographics: Organization Staff Size
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

26. Demographics: Organization Profit Status
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

27. Demographics: Organization Region
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

28. Demographics: Organization Industry
Percentage
Manufacturing
16%
Wholesale and Retail Trade
14%
Financial services A
10%
Professional, Scientific and Technical Services 8%
Energy, Gas, Oil B 6%
Telecommunications
Accounting / Architectural C 4%
Computer and Electronic Products/Technology D
Health Care Services E
Utilities
Information Services F 3%
Pharmaceutical and Medicine G 2%
Law Firms and Legal Services
Physician and Dental Offices 1%
Other industries
A Includes Banks, Insurance Companies, Securities and Commodities, Other Finance and Insurance Services categories.
B Includes Energy Extraction and Refining, Gas and Oil, and Other Oil, Gas, and Energy Extraction and Refining categories.
C Includes Accounting, Tax, Payroll Services and Architectural, Engineering categories.
D In the survey labeled as Manufacturing: Computer and Electronic Products/Technology.
E Includes Hospitals and Other Health Care Services categories.
F Includes Publishing, Motion Picture, Broadcasting (except Internet) and Other Information Services categories.
G In the survey labeled as Manufacturing: Pharmaceutical and Medicine category.
n = 4,402
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

29. Demographics: Other
Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?
Is your organization a single-unit organization or a multi-unit organization?
Single-unit organization: An organization in which the location and the organization are one and the same.
26%
Multi-unit organization: An organization that has more than one location.
74%
U.S.-based operations only
66%
Multinational operations
34%
n = 4,387
n = 4,398
For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?
What is the HR department/function for which you responded throughout this survey?
Multi-unit headquarters determines HR policies and practices
64%
Each work location determines HR policies and practices 4%
A combination of both the work location and the multi-unit headquarters determines HR policies and practices
33%
Corporate (companywide)
74%
Business unit/division
15%
Facility/location
11%
n = 3,407
Note: n = 3,410. Percentages do not equal 100% due to rounding.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

30. In collaboration with and commissioned by MassMutual
SHRM Survey Findings: 2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes
In collaboration with and commissioned by MassMutual
Survey Methodology
Response rate = 10%
4,402 HR professional respondents from a randomly selected sample of a variety of industries in SHRM’s membership
Margin of error +/- 2%
Survey fielded: July 10, 2012 to August 3, 2012
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013

31. About MassMutual
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders every year since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013
Disability and Executive Benefits Survey ©SHRM 2012 31

32. About SHRM
The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India.
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013
Disability and Executive Benefits Survey ©SHRM 2012 32

33. About SHRM Research
For more survey/poll findings, visit
For more information about SHRM’s Customized Research Services, visit
Follow us on
2013 Employer Perspectives on Disability Benefits—Carrier Satisfaction/Changes ©SHRM 2013
Disability and Executive Benefits Survey ©SHRM 2012 33