How Disability Insurance Reforms Change The Consequences Of Health Shocks On Income And Employment.
Being employed guarantees you a regular income month after month. However, employed persons are vulnerable to unforeseen events in life. The events can result in income loss. Some common events that result in income loss include injuries and illnesses.
Luckily though, employed workers can purchase disability insurance to protect them against such events. While disability insurance is common in most countries, it doesn’t fully address the challenges faced by disabled or injured workers in the labor market.
Many intergovernmental organizations have called on countries to reform their disability programs to address this sad reality. For instance, the Dutch government carried disability insurance reforms to address the plight of disabled or injured workers.
Such reforms have changed the consequences of health shocks on employment and income among disabled or injured workers.
What are the Challenges Facing Disability Coverage
Disability insurance has some flaws that necessitate its reform. Generally, most of the challenges have to do with the eligibility criteria and getting approval for claims.
In order, to change what the DI covers, how its defined has to change. For instance, a policy that offers benefits to the claimant if they are unable to perform their current job is much better than one that provides a claim on the condition that the claimant is unable to do any job.
Besides, it’s estimated that slightly half of the people who apply for disability insurance get approved. What happens to the huge percentage whose application gets denied? If an employee has to count on the coverage, the figures should give hope. That calls for enacting reforms that offer greater benefits, cut down the wait time, and offer options to the self-employed and unemployed group.
However, that doesn’t mean making DI eligibility criteria less stringent. The reforms should focus on streamlining the process and making it less stressful for the employees.
Here is a comprehensive look at the long-term implications of disability insurance reforms.
Impacts of Disability Insurance Reforms
Major Improvements In the Labor Market
Disability insurance reforms have led to a tremendous improvement in the labor market among disabled workers. The labor market has historically exposed these workers to a health shock from the start of their disability.
Employed workers are more likely to get benefits associated with disability insurance, courtesy of the reforms. Moreover, they are likely to keep their jobs after experiencing injuries. Also, self-employed disability insurance has become more affordable for self-employed workers.
Offers An Alternative Compensation For Unemployed and Self-Employed Persons
Disability and injuries can happen to anyone, whether unemployed or employed. Disability insurance reforms don’t just cater to employed persons who are eligible for disability insurance. There is self-employed disability insurance to cater for the self-employed and an alternative compensation for the unemployed as well.
This group can apply for unemployment insurance since they aren’t eligible for disability insurance. Still, they can apply for social assistance if they aren’t suitable for compensation under any unemployment insurance program. However, social service pays lower benefits than other disability compensation programs.