The Impact of Short- and Long-Term Disability
It’s important for agents, brokers, and benefits representatives to understand and discuss the impact of short- and long-term disability with your firm or client. Disability insurance products are good for organizations, and good for employees. They help employers recruit and retain talent, and help workers weather financial challenges caused by work absences.
Duration of Short-Term Disability: According to the Disability Management Employer Coalition, the average duration of short-term disability claims is about 30 to 90 days. 1
Duration of Long-Term Disability: The Social Security Administration reports that the average duration of long-term disability claims is about 34 months. 2
Work Loss Days: Employees with disabilities (both short- and long-term) experience, on average, 15.6 work loss days per year, compared to 7.2 days for employees without disabilities, according to the National Safety Council. 3
Cost to Employers: According to the Bureau of Labor Statistics, short- and long-term insurance plans generally cost $0.15 per employee, on average, per hour worked. This premium is between 1% and 3% of an employee’s total compensation. 4 While most employers pay the entire premium, an option is to share the cost with the employee. The portion of the premium paid by the employer is generally taxable to the disabled employee.
Impact on Productivity: The Integrated Benefits Institute estimates that disabilities lead to a productivity loss of approximately $1,100 per employee annually. 5
Mental Health Issues: About 50% of long-term disability claims are related to mental health conditions, highlighting the need for mental health support in the workplace. 6
Employer Challenges: A survey conducted by the Society for Human Resource Management found that almost 60% of employers face difficulties managing the return-to-work process for employees on disability.
Risk of Unemployment: The unemployment rate for individuals with disabilities is significantly higher, often around 8.8%, compared to 3.7% for those without disabilities, according to the Bureau of Labor Statistics. 8
With an average duration of nearly three years, a work absence caused by a disability can cause a significant financial strain for any household, and poses challenges for any employer.
- Disability Management Employer Coalition, 2023 DMEC Employer Leave Management Survey. 2024 https://dmec.org/resources/surveys-and-benchmarking/
- Social Security Administration, What We Mean by Disability, 2024, https://www.ssa.gov/benefits/disability/qualify.html#:~:text=You%20cannot%20do%20work%20at,or%20to%20result%20in%20death.
- National Safety Council, Work and Death Injuries, 2025, https://injuryfacts.nsc.org/technical-appendix/work-deaths-and-injuries/
- Bureau of Labor Statistics, Employee Benefits in the United States, 2024, https://www.bls.gov/news.release/pdf/ebs2.pdf
- Integrated Benefits Institute, Poor Health Costs US Employers $575 Billion and 1.5 Billions Days of Lost Productivity. 2020, https://news.ibiweb.org/poor-health-costs-us-employers-575-billion,
- Advisory Council on Employee Welfare and Pension Benefit Plans, Report to U.S. Acting Secretary of Labor, 2023, https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/about-us/erisa-advisory-council/2023-long-term-disability-benefits-and-mental-health-disparity.pdf
- State of the Workplace Study, SHRM, 2023, https://www.shrm.org/content/dam/en/shrm/research/SHRM-State-of-the-Workplace-report-2021-2022.pdf
- Office of Disability Employment Policy, Disability Employment Statistics, 2025, https://www.dol.gov/agencies/odep/research-evaluation/statistics
