Academic journal article Social Security Bulletin

The Prevalence of Employer-Provided Benefits by Industry of Employment and Implications for Social Security Disability Insurance Claiming Behavior

Academic journal article Social Security Bulletin

The Prevalence of Employer-Provided Benefits by Industry of Employment and Implications for Social Security Disability Insurance Claiming Behavior

Article excerpt


The two largest federal income assistance programs for individuals with disabilities are Social Security Disability Insurance (DI) and Supplemental Security Income (SSI), both administered by the Social Security Administration (SSA). The Social Security Act defines disability as "the inability to engage in substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment which can be expected to result in death, or which has lasted or can be expected to last for a continuous period of not less than 12 months." Although both programs use that definition, their eligibility requirements differ. DI provides cash benefits to workers who leave the labor force because of a mental or physical disability.1 These individuals have a work history and an earnings record, they have paid Federal Insurance Contributions Act (FICA) taxes, and they are unable to earn at the SGA level because of their disabling condition(s). DI benefits replace some of the earnings lost because of disability. SSI, on the other hand, provides means-tested payments to working-age individuals with low income and few resources who are not able to work because of disability. Some SSI recipients also qualify for a modest DI benefit.

Applications for DI disabled-worker benefits increased from about 1.3 million in 2000 to a peak of 2.8million in 2010. About 2.2 million workers applied for DI benefits in 2016 (SSA 2018, Table 60). Various factors may have contributed to the fluctuating trends in DI applications and enrollment over the years, such as changes in the prevalence of employee access to employer-sponsored health insurance (Livermore, Wittenburg, and Neumark 2014). Employers may voluntarily offer health insurance and paid leave to provide their employees with security against unforeseen events that might arise during their productive years. Such benefits offer economic stability for workers and their families, which in turn helps to insulate the wider U.S. economy against potential shocks. Employer-provided benefits can be seen as a partnership among businesses, individual workers, and the government, in that employer costs for many such benefits are partially offset by tax advantages. In addition to providing employee benefits voluntarily, employers are obligated to contribute to government-administered programs via taxes. Social Security coverage (for disabled and retired workers and their dependents), unemployment insurance, workers' compensation, and family and medical leave2 are, for most jobs, mandatorily provided (Employee Benefit Research Institute 2011, Chapter 1). One would expect to observe little or no variation in the coverage of most workers under these mandatory programs. However, the voluntary provision of employee benefits, such as employer-sponsored health insurance, paid leave, and short- and long-term disability insurance, might vary widely.

Analyzing the potential interactions between elective employer-provided benefits and application for DI benefits can provide useful insights to employers, workers, and policymakers. In this research note, we examine the extent to which employers in different industries offered selected types of health insurance and paid leave to employees and compare those patterns with the industry distribution of DI beneficiaries' last employment. Such statistics could be used to test the assumption that employees who have access to employer-sponsored health insurance and paid leave would use those benefits to delay or forestall a workforce exit because of a disability. Depending on the nature and severity of the disability, access to timely care also could dissuade some workers from filing disability claims (Dement and others 2015; Schimmel Hyde and Livermore 2016).


Several studies have explored the relationship between the health condition of U.S. workers, the availability of health insurance, and DI application volume (Livermore, Stapleton, and O'Toole 2011; Du Bois and Donceel 2008). …

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