Employees often accept whatever paid sick leave policy their company offers, no questions asked — but not all of them know that they’re actually eligible for more.
While 78% of employees are given sick pay as a workplace benefit, according to the Bureau of Labor Statistics, a lesser-known offering can ensure those paid days are protected long-term. Income insurance provides income protection for a longer period of time in instances when someone cannot work, due to a serious illness or injury, yet is often misunderstood or worse, forgotten altogether.
“The ambiguity of these labels is one of the things that perpetuates misconceptions and misunderstandings about what income protection is and why you should have it,” says Alex Wiliamson, the founder of insurance company Asteya. “This lack of transparency should not be a barrier for people.”
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While sick pay is a limited amount of PTO that employees receive if they are unable to work due to non-work-related illness or injury, income insurance will cover a percentage of an employee’s income for an extended period of time, anywhere from three months to the time it takes for you to reach retirement, depending on the policy.
Income insurance covers incidents related to musculoskeletal disorders, cancer, pregnancy, mental health issues — including depression and anxiety — and injuries such as fractures, sprains, and strains of muscles and ligaments, according to the Council for Disability Awareness.
In the past, income protection has also been referred to as “disability insurance,” — a dangerous misnomer, according to Williamson, because most people who qualify for income protection don’t necessarily consider themselves disabled, which in turn leads to them not taking advantage of the protections they’re eligible for, or worse, not caring when it’s not included in their benefits package.
The good news, Williamson says, is that most companies offer both paid sick leave benefits and income insurance — but workers have to be significantly more proactive about income insurance, and employers need to be the ones to educate them.
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“Too often income protection is the neglected or forgotten tool,” she says. “It doesn’t get enough attention, in part, because it’s not emphasized enough by employers and there isn’t a great deal of understanding around coverage.”
Contract and gig workers would benefit the most from these policies, yet often income insurance is offered to full-time employees only. Currently, there are approximately 110 million working adults in the U.S. that don’t have income protection. Asteya is working to change that by offering income insurance plans for contract workers, gig-economy workers and freelancers.
“When income protections are offered, these benefits are usually reserved for full-time employees only,” Williamson says. “This leaves contract workers in a particularly precarious situation because they are denied both paid sick leave and income insurance from their employers.”
Employers should take it upon themselves to openly delineate the differences between income protection and sick pay at the beginning of an employee’s life cycle, and promote its use when necessary, as much as they do for sick leave and other forms of PTO.
“Employers [should] be more proactive than reactive in educating their employees on the differences between sick pay and income insurance,” Williamson says. “Upfront transparency and employee education is the best policy here.”
