Private and Employer-provided benefits are very similar in terms of the benefits they provide and how they are managed. They cover a wide range of insurance areas, like health insurance, life insurance, short-term disability, long-term disability, and other specialty insurance. Both are managed by private insurance companies, like Anthem Health, Lincoln Financial, Mass Mutual, New York Life, etc, and offer similar coverage. The biggest differences between Private and Employer insurance are Transferability and Eligibility criteria.
Transferability: Employer-provided benefits are only available through your employer so you will also have to sign up for new benefits with every new employer, and you will lose access to the benefits once you leave an employer. This is important to remember because if you get fired as a result of your HD before you can use your short-term or long-term disability, you will lose access to those benefits.
Eligibility Criteria: Employer-provided benefits generally have fewer criteria than Private benefits, meaning they are easier to obtain, because Employer-provided benefits are regulated by federal law. Often, Employer-provided benefits will guarantee you a minimum benefit, like life insurance equal to your yearly salary, without having to complete an application or meet any minimum criteria. If your employer pays the premium for a long-term disability policy, you do want to make sure the policy will cover your HD – most policies, whether Employer-provided or private, will not cover a condition that was diagnosed more than 24 months before you started paying into the policy.
For more information about Private and Employer-provided benefits, check out this helpful webinars: