Group Disability Insurance

Group Disability Insurance in Texas

Serving Cedar Park, New Braunfels, San Antonio and surrounding areas

Protect Your Employees’ Income When Life Disrupts Work

Running a business means planning for the unexpected—not just for your company, but for your people. Group disability insurance helps protect your employees’ income if they’re unable to work due to an illness or injury, while also protecting your business from disruption, turnover, and financial strain.

At Dowd Insurance Agency, we help Central Texas business owners design group disability insurance plans that make sense for their team, budget, and long-term goals—without making the process complicated or overwhelming.

What Is Group Disability Insurance?

Group disability insurance replaces a portion of an employee’s income if they’re unable to work because of a non-work-related injury or illness. Unlike workers’ compensation, which only applies to job-related injuries, disability insurance covers everyday situations—surgeries, chronic conditions, accidents at home, or serious illnesses.

These policies are offered as part of an employee benefits package and can be fully employer-paid, employee-paid, or cost-shared.

Think of it this way:
Health insurance helps pay medical bills.
Disability insurance helps pay the bills at home.

Why Group Disability Insurance Matters for Employers

Many employees assume they’re financially protected if something happens—until they realize how limited their options are.

Savings often run out faster than expected
Social Security Disability can take months or years to qualify
Workers’ comp only applies to job-related injuries

Offering group disability coverage helps:

Protect employees’ financial stability
Reduce stress during extended absences
Improve retention and morale
Strengthen your overall benefits package
Position your business as a competitive employer

For many Central Texas businesses, disability insurance is one of the most appreciated—and least understood—benefits you can offer.

Types of Group Disability Insurance Coverage

Short-Term Disability (STD)

Short-term disability insurance provides income replacement for temporary disabilities.

Typical features:

Benefit duration: 3–6 months (sometimes up to 12 months)
Waiting period: 7–14 days in many cases
Income replacement: usually 50%–70% of gross wages

Common examples:

Recovery from surgery
Complications during pregnancy
Broken bones or short-term illnesses

STD helps bridge the gap between sick leave and a full return to work.

Long-Term Disability (LTD)

Long-term disability insurance provides income protection for more serious or ongoing conditions.

Typical features:

Benefit duration: several years, to age 65, or Social Security retirement age
Waiting period: commonly 90–180 days
Income replacement: usually around 60% of income

Common examples:

Cancer treatment
Severe injuries
Chronic or degenerative conditions

LTD is often the backbone of a strong group disability program.

How Group Disability Insurance Works (Simple Example)

Let’s say an employee earns $5,000 per month and suffers a serious illness that keeps them out of work for several months.

Their short-term disability replaces 60% of income after a short waiting period
If the disability continues, long-term disability takes over after STD ends
Monthly benefit helps cover rent, groceries, utilities, and other essentials

This structure allows employees to focus on recovery—not financial survival.

Key Policy Features to Understand

Group disability policies can vary significantly. Some of the most important components include:

Elimination period – How long an employee must wait before benefits begin
Benefit percentage – Portion of income replaced
Benefit cap – Maximum monthly payout
Definition of disability – “Own occupation” vs. “any occupation”
Pre-existing condition limitations
Tax treatment – Depends on who pays the premium

We walk through these details with you so there are no surprises later.

Employer-Paid vs. Voluntary Disability Insurance

Employer-Paid Plans

Stronger benefit and retention tool
Premiums paid by the business
Benefits may be taxable to employees

Voluntary (Employee-Paid) Plans

Minimal cost to the employer
Employees choose participation
Benefits are often tax-free

Many Central Texas employers use a hybrid approach, combining a base employer-paid benefit with optional buy-up coverage.

Is Group Disability Insurance Required?

Group disability insurance is not legally required in Texas. However, many businesses choose to offer it because:

Employees increasingly expect income protection benefits
It complements health, life, and workers’ comp coverage
It helps protect productivity and workplace stability

In competitive hiring markets like Austin, Round Rock, and surrounding areas, disability coverage can be a meaningful differentiator.

Frequently Asked Questions (FAQ)

Is disability insurance expensive for employers?

In many cases, no. Group rates are often surprisingly affordable, especially when spread across multiple employees.

Does this replace workers’ compensation?

No. Disability insurance covers non-work-related injuries and illnesses. Workers’ comp only applies to job-related incidents.

Can small businesses offer group disability insurance?

Absolutely. Many carriers offer plans specifically designed for small and mid-sized businesses.

Can owners be covered under the plan?

Yes, in many cases business owners can be included, depending on ownership structure and carrier rules.

Why Work With Dowd Insurance Agency?

As an independent insurance agency, we’re not tied to one carrier. That means we can:

Compare multiple disability insurance providers
Customize coverage to fit your workforce
Explain complex terms in plain language
Coordinate disability coverage with your other employee benefits

We work with business owners throughout Central Texas, including Austin, Cedar Park, Round Rock, Georgetown, Leander, and surrounding communities.

Ready to Explore Group Disability Insurance?

If you’re considering group disability insurance—or want to review an existing plan—we’re happy to help. We’ll walk you through your options, answer questions, and help you build a benefits package that protects both your employees and your business.

Contact Dowd Insurance Agency today to start the conversation.