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Are poor employee benefits partly to blame for rising SSDI rates?

As we’ve discussed on this blog before, the number of people qualifying for Social Security Disability Insurance has been rising lately, and the timing of that increase has roughly tracked the unemployment crisis caused by the Great Recession. That association has caused a lot of controversy.

Some have accused the Social Security Administration of granting SSDI benefits to readily, despite the fact that a the majority of SSDI applications are initially denied. Others have speculated that Social Security disability is just a secondary form of welfare for people whose unemployment benefits have run out. Yet the increase in SSD beneficiaries has long been expected, simply because the average age of U.S. workers is rising, which means that more workers are at risk for developing disabilities that keep them from working.

Recently, a bipartisan group of Congressional representatives has proposed a new theory for why an increasing number of U.S. workers are in need of their Social Security Disability Insurance benefits. The theory? Corporations have been cutting back on offering long-term disability insurance as an employment benefit.

Two pairs of lawmakers -- a Democrat and a Republican from the House of Representatives and another bipartisan pair from the Senate -- have invited their colleagues to join a new group called the Congressional Income Protection Caucus. In a letter of invitation, the lawmakers stated that the growing lack of sound private disability insurance programs offered as employment benefits is forcing workers to rely on SSDI.

Employers could offer long-term disability insurance as an employee benefit for around $300, the group noted. When companies fail or refuse to do so, they leave workers who become disabled from work due to illness or injury to seek benefits from SSDI -- benefits averaging around $1,130 a month.

We often hear opponents of social safety net programs accuse beneficiaries as lacking in personal responsibility. Employers know that, statistically, some of their workers will develop long-term or permanent disabilities. They know that a relatively small investment on their part could protect those workers. If they foist that small cost off onto a more expensive government-run program, how is that different?

Source: LifeHealthPro, "Disability benefits caucus attracts bipartisan support," Allison Bell, Nov. 26, 2013

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