2. Managing Employee Benefits: Adding a Long-Term Disability Benefit It is time for the annual review of benefit offerings at Medfirst Pharmaceuticals. With more than 1,500 employees and growth on the horizon, Director of Compensation Harold Jones knows that he must ensure that the benefit package is attractive to potential new employees while still meeting the needs of current employees. Medfirst has a diverse workforce that includes scientists, administrators, support staff, and field sales employees. Harold thinks that the current package is attractive but that more options might add overall value. The company currently offers a health insurance plan, a retirement savings plan, a generous paid time-off allowance, life insurance, and short-term disability insurance. Harold has reviewed benefit utilization reports and also an employee satisfaction survey and finds that, overall, employees are satisfied with their benefits. Medfirst is focused on retaining employees over the long term, and several questions on the employee satisfaction survey ask about their concerns related to their employment at Medfirst. While employees seem confident that the company is on the right track to remaining successful, employees noted that they were concerned about their financial security and long-term opportunities at Medfirst. Harold thinks that these feelings may be a result of external forces, such as the recent downturn in the economy, coupled with excessive media coverage of health problems that continue to plague the public in general. page 187 As Harold reflects on these employee concerns, he considers some employees over the last several years who have had to take extended leaves of absence due to medical problems. One employee in particular had to have back surgery that left him out of work for almost a year. Harold knows that the absence of income and the high medical expenses caused a toll on this employee, who had to borrow from his retirement account in order to pay his home mortgage during that time period. Harold knows that stories such as this are becoming more common and that giving employees some relief from such concern would be welcomed. Thus, he is considering offering a long-term disability insurance option for employees. A long-term disability insurance benefit would provide employees with income continuation in the event of an illness or injury that leaves an employee unable to work for a period of greater than six months. Harold learns that there are some options such as partial disabilities coverage, which provides employees some payments if they are able to continue working only in a part-time capacity due to their illnesses or injuries. Such an option hadn't occurred to Harold, and he realizes that he needs to learn more to determine if Medfirst should offer long-term disability insurance. 1. How do disability insurance benefits differ from workers' compensation? 2. If a company already offers short-term disability insurance, why should the company consider long-term disability insurance? 3. Do you think the long-term disability insurance benefit would be a valuable addition to Medfirst's benefit offerings? Should the company include the partial disabilities coverage?