Why employers should add child disability insurance to their benefits suite

Employers are considering the needs of caregivers more than ever before, with many offering child and elder care benefits, paid parental leave and flexible work arrangements. A new insurance option allows them to take these benefits even further.

Benefits provider Juno is now offering first-of-its-kind child disability insurance through employers, bringing another addition to the supplemental insurance world. If a parent's child develops a severe illness, disability or injury, parents are entitled to up to $1 million, which would be paid out in monthly installments over the course of 10 years. Parents can use it to cover medical costs, pay for specialized at-home care or even supplement lost income that went to their child's care. Juno's insurance covers any developments that occur from birth until children are 26 years old.

"When a child has a severe health event, there's months, years, or permanent caregiving costs that parents are often faced with," says Hall Kesmodel, managing director at Juno. "There's no insurance for that, and it leaves a lot of parents in a very bad situation."

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Over three million children have a learning or physical disability, according to the U.S. Census, and that number is likely to grow in the next decade. Between the long-term effects of COVID-19 and the fact that more parents are having their children later in life (studies show the rate of cognitive disabilities goes up in parents who give birth after age 35), child disability challenges will become more visible, notes Kesmodel. He also points out that two-parent households are now less likely to have a stay-at-home parent due to the rising cost of living — meaning there may not be a parent who can take care of their child full-time and still afford their child's care as well as the rest of the family expenses.

Families are in a precarious financial position without much of a social safety net from the government to catch their fall, underlines Kesmodel.

"Today, we cover premature death with life insurance, we cover disability with long-term disability insurance, but there's no protection for children with disabilities," he says. "It's the largest uninsured risk that parents face."

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Unsurprisingly, it's women who stand to lose the most from having a child with a disability. In a study of 500,000 parents whose children were diagnosed with cancer, Juno found that women could not financially recover enough to meet their original income potential, even 10 years after their child's cancer diagnosis. Men, on the other hand, recovered almost completely by year six. 

 "This is an equity issue that keeps women from progressing in the workforce and maintaining financial wellness," says Kesmodel.

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Kesmodel advises employers to consider their working-parent population and whether their health plans and other insurance offerings can protect their kids. He points out that paid family leave, which gives employees time off to care for loved ones, is another vital piece of the benefits puzzle.

"These benefits like disability insurance and paid family leave create pathways for employees facing the impossible," says Kesmodel. "They can take care of their family and still come back to work instead of juggling everything at the same time, which doesn't really benefit anybody."