Should You Offer Identity Theft Protection as an Employee Benefit?

In recent years, identity theft protection has become a growing issue for individual consumers all over the country. The US Federal Trade Commission estimates nearly 10 million Americans fall victim to identity theft every year, and a recent study by Utica College's Center for Identity Management and Information Protection found that the median actual dollar loss for identity theft victims is $31,356. But the impact of these crimes on individual employees has turned the issue into a significant concern for employers, as well. In addition to the resulting personal stress and expense, identity theft can also cause a significant amount of absenteeism and lost workplace productivity. As a result, more companies are adding identity theft protection as an employee benefit to help their employees balance work-life needs.

Several businesses offer identity theft protection as a company-sponsored benefit to cover certain expenses and provide certain services to help victimized employees. One program offered by Wells Real Estate Funds in Norcross, GA, offers coverage for financial losses up to $10,000, as well as lost wages related to identity theft. Such coverage is often relatively inexpensive when compared to the long-term benefit that it offers employees. But if employers can’t afford to cover the premiums for their entire workforce, they can offer the benefit on a voluntary basis, with employees paying the cost at a discounted group rate.

Whether offered as company-sponsored or employee-paid, identity theft protection is becoming a more popular offering for employers because it also serves as a vehicle for limiting liability. An employer can take steps to protect itself simply by making the protection available and by holding mandatory employee meetings on identity theft and the benefits offered. If employees decline the coverage and later claim their identities were stolen as a result of the company's actions, the employer can provide signed proof that they attended the presentation and declined the coverage.

Employers can also extend this benefit as a function of employee education and provide additional resources for protection and recovery. Some businesses provide educational materials, or hold workshops to educate employees about the basics of identity theft and how to safeguard their personal records. Others offer discounted access to services and tools that either help protect employees from identity theft or help affected employees fix identity theft issues and cover associated costs.

Most of these benefits can be obtained through identify theft providers, voluntary benefit brokers, voluntary benefit aggregators, and select EAP and work-life providers. In addition, property and casualty insurance carriers are beginning to provide these services as a value-added offering or an additional premium based service.

Identity theft remains a serious issue in today’s society, and it will continue to create problems for consumers and employers alike for years to come. In fact, studies suggest that as much as 25 percent of the American population will be impacted by identity theft in the near future. By providing coverage for identity theft, businesses not only promote employee confidence and loyalty, but also can position themselves as an employer-of-choice in a competitive market.

For further information, please visit the following links:

Identity Theft as an Employee Benefit

Identity Theft: Limiting Your Employees’ Risk – and Your Liability

Identity Theft Issues for Employers

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October 24, 2008

Hill, Chesson & Woody strives to keep our clients' group decision makers abreast of trends influencing the employee benefits market. Look for Eyes on Benefits to bring you news and information affecting you and your employees.

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