Business Uses of Disability Insurance – Part II – Wage & Salary Continuation

EVERY EMPLOYER IN AMERICA will probably face this devilish problem:

Two employees are badly injured in an auto accident that occurred on their way to a company training session. One had been with the Company eleven years and the other, two years. Neither can financially sustain themselves on Workers’ Compensation Benefits.

PROBLEM: Should the employer continue the paychecks to these desirable employees and who are wanted back at work? Should the employer continue the pay of the eleven year employee and not the two year employee? Should the employer relate to them as does the IRS and brand them as Ex-Employees and pay them not at all? No payments made after the accident will be tax deductible because there was no Tax Qualified Wage / Salary Continuation Plan in effect.

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