Nearly 40% of American women experienced a life event during the COVID-19 pandemic that impacted them financially. Many of those women took time off – or left the workforce entirely – to care for loved ones.
As I noted in a statement for the record for a U.S. House Ways and Means Committee’s hearing this week, the pain of a lost paycheck for families is profound and immediate. It also creates long-term financial consequences, especially for women. On average, women lose more than $300,000 in wages, social security benefits, and retirement plan accumulations over their lifetime when they take time off from work to provide care to a family member. The financial impact of women’s caregiving decisions today is often magnified when they reach retirement age.
There is a void in the United States when it comes to paid family and medical leave, and we need to change how we value and support caregivers. Whether it’s childbirth, adoption, a family health crisis, or a worker’s own health needs, workers shouldn’t have to choose between their paycheck and the health and wellbeing of their family. Our country needs a meaningful, accessible and affordable solution for paid family and medical leave. And that solution needs to build on the existing private sector system.
America’s life insurance companies are actively engaged in supporting families with paid family and medical leave. More than 40 percent (62.7 million) of all civilian workers are provided paid medical leave under their employer’s short-term disability plan and half of civilian workers in a union have access to short-term disability benefits. Short-term disability plans provide paid leave for employees’ inability to work due to a medical condition and increasingly paid family leave benefits are being added to employees’ benefit choices.
In addition, ACLI members help employers and their workers navigate their paid leave experience with return to work programs, absence management tracking and coordination, and compliance with existing leave requirements at the federal, state and local level. Disability income insurance carriers pay more than $20 billion in paid leave claims each year, and the average processing time for a claim is less than two weeks.
All Americans should be able to take time off work to care for their family without facing economic hardship. The need for action is clear, and there is an historic opportunity right now for the public and private sector to collaborate. America’s life insurance companies stand ready to meet the moment as we work together towards meaningful reform that will bolster caregiving and help American families protect their financial future