Aging Workers Push Disability Costs Higher According to New Disability Report
The cost of long-term disability claims rose for at least a fifth straight year as expenses tied to the aging workforce drove payments higher for insurance companies. Insurers paid $9.8 billion in disability claims in 2013, even as the number of workers receiving the payments fell for a second straight year amid a decline in the jobless rate, according to a report by the Council for Disability Awareness (CDA). About 59 percent of claims last year were tied to people 50 or older, the council’s data show. That compares with less than 55 percent in 2009.
“On average, older people have higher wages and it’s harder for them to get back to work,” said CDA President Barry Lundquist. “When you think about the baby boomers and how old they are now, they have a much higher chance of becoming disabled — maybe a four or five times higher chance in a given year than someone that’s in their twenties or thirties.”
The coverage compensates policyholders for income-interrupting illness or injury. The number of people receiving payments can decline in an improving economy, because there are more opportunities for people to return to the workforce. The U.S. unemployment rate fell to 6.7 percent at the end of 2013, from 7.9 percent a year earlier.