The Latest Facts on Long-Term Disability Insurance for Co-op / Condo Staff

Obviously not. Prudent employers and employees prepare for that option through two avenues: Social Security and Supplemental Security Income disability benefits and long-term disability insurance. As our population ages and disability continues to rise, condo and co-op boards need to have a human-resource policy in place that can handle the issue with a minimum of anguish, disruption and lawsuits.

Union Handles It

This is easier for co-ops and condos with using staff belonging to the Service Employees International Union's (SEIU) Local 32BJ. Its contract with New York City co-ops and condos specifies that workers are entitled to a disability pension if at least 60 years old and totally and permanently disabled, along with other provisions. Union co-ops and condos regularly contribute to the benefit fund per contract, and 32BJ handles the logistics. 

With non-union buildings, long-term disability insurance is usually provided by employers as part of an employee benefits package. If not, employees can purchase their own, private disability insurance, but this is often prohibitively expensive. Note that New York is among the six states and territories that require employers to provide disability insurance for an off-the-job injury or illness  (along with California, Hawaii, Wisconsin, Rhode Island and Puerto Rico). 

How It Works 

Long-term disability insurance takes over when short-term disability insurance benefits end, generally after three to six months. Long-term insurance, which usually pays 50 to 75 percent of a worker's salary, in most cases have a end-date of either a set number of years or until the employee reaches 65 and becomes eligible for Social Security.

The nonprofit insurance-industry group the CDA finds that disability claim payments by participating CDA members, which represent more than 75 percent of the commercial disability insurance marketplace, totaled $9.8 billion in 2013, a 1.6 percent increase from 2012.

Also in that timeframe, more employers offered long-term disability insurance benefit plans: 214,000, a slight increase for the second year in a row, after declines in 2009-2011. However, the number of employees insured by such plans dropped roughly 1.5 percent to 32.1 million last year, reversing the slight increase seen in 2012. As the CDA analyzed, "Since the number of companies offering disability benefit plans increased between 2012 and 2013, the decline in insured individuals may reflect the trend toward more disability plans offered on a voluntary basis in which not all eligible employees participate."

Where does this leave your co-op or condo? If you've union staff, there's essentially nothing more you need do. If you're not a union building, discuss with your board attorney and managing agent how best to address New York State law requiring disability insurance for staff. As with most staffing issues, a good disability plan, as part of a comprehensive employee benefits package, helps attract the best workers. 

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