An Analysis of Private Long-Term Disability Insurance Access, Cost, and Trends

The authors use data from the National Compensation Survey to examine private long-term disability insurance (LTDI) access, cost, and trends over time. In 2013, one-third of employers provided access to LTDI. Compared with those without LTDI access, workers with access were more likely to work full time, have jobs with higher wages, work in larger establishments, and be employed in industries and regions with lower disability prevalence. The average cost for employers to provide LTDI to most types of workers who currently have access is typically 0.3 percent to 0.6 percent of their total wages. This proportion is slightly smaller than the disability insurance component of the Social Security payroll tax, a component that is 0.9 percent of wages. A slight increase in LTDI access rates occurred over the past decade (2003 through 2013), although only a minority of workers have the option of LTDI. These findings suggest that any type of expansion in LTDI access would affect primarily workers who have lower wages, work in small establishments, and have higher imputed disability prevalence, given that these individuals were least likely to have coverage in 2013.