Many Employers do not Know What They Spend on STD

March 19, 2007 ( - A recent survey from the International Society of Certified Employee Benefit Specialists (ISCEBS) found 41% of employers do not know what they spend as a percentage of payroll on short-term disability (STD) benefits.

In a press release, ISCEBS said most employers treat disability as a payroll practice, making it hard to determine costs. Of survey respondents who did know what they spend on STD, 53% said they spend between 0% and 5% of payroll on the benefit, 6% spend between 6% and 10%, and 2% said they spend 11% to 15% of payroll on STD.

In addition, survey results indicated the majority of employers who offer a STD benefit do not require employee contributions (86%). The employers who do require employee contributions to their STD plans said the requirement hinders employee enrollment, according to the press release.

Recent STD benefit changes reported by survey respondents included outsourcing administration (27%), decreasing the amount of income replacement provided by the plan (22%), and other changes including switching vendors, increasing benefit levels and lengthening the elimination period as the most prevalent changes (61%).

Among other things, employee perception of the value of a STD benefit was a hurdle to plan changes cited by respondents.

A report of survey results is here .