Is a business required to provide disability insurance coverage for its employees?
A. No. While it is common to provide “employee benefit” coverage for workers, the law generally does not require a business to do so. However, in the case of disability insurance which is a component of an employer-sponsored health plan, that situation is changing. Specifically, the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which took effect January 1, 1998, and one of the main features of the Act, guarantees the continued availability of health insurance, regardless of medical condition, for those already with coverage through employment or otherwise. For this reason, and others relating to court cases and state laws, while there may be no initial obligation to offer health insurance, once health insurance is in place for an employed person it will generally remain available. This is especially so in employment situations governed by collective bargaining agreements.
