Protecting Employees’ Identities: Why Employers MUST offer Identity Theft Insurance
Identity theft happens to millions of Americans each year. The effects of this can be devastating financially and emotionally to anyone who is victimized. The Federal Trade Commission reported in 2022 that the median loss for all identity fraud reports was $650 and the total amount lost by victims of identity fraud was $189,205,793 as published in the Consumer Sentinel Network Data Book 2022.
With that in mind, it is important to help your employees protect themselves and their loved ones by offering this valuable benefit. Not only can it help your employees prevent such financial and emotional devastation, but it can help your organization attract talent within your field, and increase employee satisfaction, and morale. At VSMG, we specialize in providing Arizona’s public entities with innovative solutions that address evolving needs and are here to educate on a viable benefit solution to the growing problem of identity theft.
Understanding Identity Theft
Identity theft comes in three different forms: financial, medical, and criminal.
Financial identity theft involves the unauthorized use of someone’s personal information to access financial accounts, open new accounts, or make fraudulent purchases. In an increasingly digital world, financial identity theft has become more prevalent and can result in significant financial loss and damage to the victim’s credit score. This is the most common form of identity theft with 441,882 credit card fraud cases reported in 2022, according to the Federal Trade Commission. Children are also at risk of identity theft with a reported 915,000 cases of identity theft in 2022 according to financial services research firm, Javelin Strategy & Research.
Medical identity theft happens when someone uses another person’s identity to receive medical attention. Consumer Sentinel Network Data Book reported 27,820 cases of identity theft related to medical services in 2022. Whereas this is not as common as financial identity theft, it can be extremely problematic for the victim. Examples of medical identity include accessing prescription medications, medical treatments, and even surgery under another person’s name.
Criminal identity theft involves using someone’s identity to commit crimes. A common example of this is when a criminal provides the victim’s personal information when arrested. This results in criminal records and legal issues being wrongfully attributed to the victim.
Regardless of the type, identity theft has terrible consequences for its victims. It can cause financial loss, emotional stress, and take a lot of time as people work to reclaim their identity. In today’s digital age, employers need to help employees protect themselves and their loved ones from the risks of identity theft.
What Identity Theft Insurance Covers
Identity theft insurance provides coverage and support if an employee or a covered dependent falls victim to identity theft. Depending on the provider, identity theft coverage and support can include recovering costs, including legal fees and lost wages, and services ranging from monitoring and detection to resolution assistance. These policies also provide access to specialists who support victims through the process of restoring their identities.
The majority of plans provide the following:
- Monitoring Services: Credit monitoring, identity monitoring, fraud detection alerts
- Recovery Assistance: Help with reporting identity theft to authorities, assistance with restoring credit and personal information, dedicated case manager support
- Financial Reimbursement: Coverage for lost wages due to time spent resolving the theft, reimbursement for legal fees, compensation for unauthorized electronic fund transfers
- Resolution Services: Support with contacting financial institutions and credit bureaus, assistance with filing and managing paperwork, help with disputing fraudulent charges
- Legal and Expert Advice: Access to legal consultation and advice, expert guidance on preventing future identity theft incidents
- Identity Restoration: Services to help restore a victim’s identity to pre-theft status, assistance with replacing important documents (driver’s license, social security card, etc.)
- Other Services: Coverage for child identity theft, medical identity theft resolution, assistance with social media account recovery
Benefits of Offering Identity Theft Insurance to Employees
Identity theft insurance is a relatively unique benefit that enhances your organization’s overall value to your employees. Protection is oftentimes something you only think about after you’ve become a victim.
By proactively including identity theft insurance as part of your employee benefits package, you help your employees safeguard themselves and their dependents from digital criminal behavior, and protect their financial security and emotional well-being. Moreover, you are showing a commitment to helping ensure the complete care of your employee’s needs.
Financially and emotionally sound employees are more committed, productive, and satisfied workers, and less likely to leave their employer. High employee productivity and satisfaction result in low turnover, which ultimately trickles down to your organization’s bottom line. It’s a win-win.
How to Implement Identity Theft Insurance
If you are considering identity theft insurance, you should first gauge employee interest and assess specific needs by conducting an employee survey. Once that has been done, take the time to select the right insurance provider because not all policies offer the same coverage. It’s important to select a few providers and to compare and contrast their offerings in terms of what they offer and what they cost to determine the most suitable provider for your employee’s needs and budgets. Employers should be sure to review their budgets if they plan to pay for or contribute to their employee’s identity theft insurance coverage.
The right identity theft insurance plan should integrate smoothly into your already existing employee benefit packages and benefit administration system. It should be easy to administrate and utilize when needed. Moreover, it should be effectively communicated and easily understood by your employees during Open Enrollment and throughout the year to ensure they are aware of the protection this insurance covers and use it immediately when needed.
VSMG’s Role in Incorporating Identity Theft Insurance
We help public entities by evaluating and implementing identity theft insurance for their employees. From assessing needs and selecting providers to customizing plans, we work closely with our clients to meet their unique requirements.
Need help or want to learn more? Contact us today.
