Employee Benefits

4 Things Life Insurance Is Not | CA Employee Benefits Agency

Are you confused about life insurance? I don’t blame you. When I first started writing about finances more than a decade ago, my understanding of life insurance was limited.

I knew about life insurance because it was offered through my employer, and I thought a $50,000 policy was a lot of money. I also recognized insurance company names from late-night TV commercials and the occasional bit of junk mail.

I understood “insurance” to be that stuff that you had to have for your car, your home, and your health. The “life” part was a big, blurry blob of “other.” If that’s how you’re feeling, here are a few tips that might help bring things into focus—by understanding the “nots.”

1. Life insurance through work is generally NOT enough. Since learning this myself some years back, I’ve noticed that many people never explore life insurance past what is offered through their work. Policies through work are a great benefit to have, but are usually limited to one- or two-times your salary or a fixed amount like $50,000. Plus the coverage typically ends when your employment there does.

How far will an amount like that go when you consider what’s left behind for your loved ones: the loss of your income and mostly likely debts and bills. What about things like rent or mortgage, child-care and education costs?

An easy way to get a working idea of how much life insurance you need is with a Life Insurance Needs Calculator from a neutral source like www.lifehappens.org/howmuch.

2. Life insurance is NOT a luxury item. Many people have not even considered buying life insurance because they’re convinced it’s a luxury. In a recent study by Life Happens and LIMRA, consumers thought the cost of a 20-year, $250,000 level term life insurance policy for a healthy 30-year-old was three times higher than it generally is. Younger people, in particular, overestimate the cost of a term policy by a factor of five.

If you took a guess at what that policy above would cost, what would you say? It comes out to about $13 or so a month for that policy. Definitely not a luxury—most of us spend more than that on a meal out.

3. Life insurance is NOT just about covering funeral expenses. While covering funeral expenses is very important, and a major reason people purchase it, life insurance does so much more. If something happens to you, life insurance benefits can help replace lost income, or pay off a mortgage, or help ensure a college fund or safeguard a retirement nest egg.

The proceeds of a life insurance policy are generally tax free and can be used for anything your loved ones may need now and well into the future. Amazing, right?

4. Life insurance is NOT just for really healthy people. Granted, life insurance is less expensive the younger and healthier you are, but don’t discount it just because you’re not in triathlete shape!

Many people don’t considering buying life insurance because they think they won’t qualify. But when certain health conditions, such as diabetes or high blood pressure, are under control with a doctor’s guidance or medication, it’s often possible to qualify. You may even be able to get coverage after a heart attack. Just know that it is probably best to work with an experienced insurance agent if you are concerned about a health issue and qualifying for coverage.

Now, if you’re a bit overwhelmed with this information and perhaps don’t know where to start, just know that a life insurance agent will sit down with you at no cost to go over your needs and help you get life insurance coverage to fit your budget. If you don’t have an agent or advisor, go here for suggestions on how to find one. You can also tap the Agent Locator there to find someone in your area.

Remember, the right agent or advisor can help you make sense of the confusion and get you on track for the financial future you want—with the protection your loved ones need.

by Helen Mosher
Originally posted on LifeHappens.org

Choosing the Right Flexible Benefit for Employees | Cupertino Benefits Agency

Trying to decide which of the many employer-sponsored benefits out there to offer employees can leave an employer feeling lost in a confusing bowl of alphabet soup—HSA? FSA? DCAP? HRA? What does it mean if a benefit is “limited” or “post-deductible”? Which one is use-it-or-lose-it? Which one has a rollover? What are the limits on each benefit?—and so on.

While there are many details to cover for each of these benefit options, perhaps the first and most important question to answer is: which of these benefits is going to best suit the needs of both my business and my employees? In this article, we will cover the basic pros and cons of Flexible Spending Arrangements (FSA), Health Savings Accounts (HSA), and Health Reimbursement Arrangements (HRA) to help you better answer that question.

Flexible Spending Arrangements (FSA)

An FSA is an employer-sponsored and employer-owned benefit that allows employee participants to be reimbursed for certain expenses with amounts deducted from their salaries pre-tax. An FSA can include both the Health FSA that reimburses uncovered medical expenses and the Dependent Care FSA that reimburses for dependent expenses like day care and child care.

Pros:

  • Benefits can be funded entirely from employee salary reductions (ER contributions are an option)

  • Participants have access to full annual elections on day 1 of the benefit (Health FSA only)

  • Participants save on taxes by reducing their taxable income; employers save also by paying less in payroll taxes like FICA and FUTA

  • An FSA allows participants to “give themselves a raise” by reducing the taxes on healthcare expenses they would have had anyway

Cons:

  • Employers risk losing money should an employee quit or leave the program prior to fully funding their FSA election

  • Employees risk losing money should their healthcare expenses total less than their election (the infamous use-it-or-lose-it—though there are ways to mitigate this problem, such as the $500 rollover option)

  • FSA elections are irrevocable after open enrollment; only a qualifying change of status event permits a change of election mid-year

  • Only so much can be elected for an FSA. For 2018, Health FSAs are capped at $2,650, and Dependent Care Accounts are generally capped at $5,000

  • FSA plans are almost always offered under a cafeteria plan; as such, they are subject to several non-discrimination rules and tests

Health Savings Accounts (HSA)

An HSA is an employee-owned account that allows participants to set aside funds to pay for the same expenses that are eligible under a Health FSA. Also like an FSA, these accounts can be offered under a cafeteria plan so that participants may fund their accounts through pre-tax salary reductions.

Pros:

  • HSAs are “triple-tax advantaged”—the contributions are tax free, the funds are not taxed if paid for eligible expenses, and any gains on the funds (interest, dividends) are also tax-free

  • HSAs are portable, employee-owned, interest-bearing bank accounts; the account remains with the employees even if they leave the company

  • Certain HSAs allow participants to invest a portion of the balance into mutual funds; any earnings on these investments are non-taxable

  • Upon reaching retirement, participants can use any remaining HSA funds to pay for any expense without a tax penalty (though normal taxes are required for non-qualified expenses); also, retirees can use the funds tax-free to pay premiums on any supplemental Medicare coverage. This feature allows HSAs to operate as a secondary retirement fund

  • There is no use-it-or-lose-it with HSAs; all funds employees contribute stay in their accounts and remain theirs in perpetuity. Also, participants may alter their deduction amounts at any time

  • Like FSAs, employers can either allow the HSA to be entirely employee-funded, or they may choose to also make contributions to their employees’ HSA accounts

  • Even though they are often offered under a cafeteria plan, HSAs do not carry the same non-discrimination requirements as an FSA. Moreover, there is less administrative burden for the employer as the employees carry the liability for their own accounts

Cons:

  • To open and contribute to an HSA, an employee must be covered by a qualifying high deductible health plan; moreover, they cannot be covered by any other health coverage (a spouse’s health insurance, an FSA (unless limited), or otherwise)

  • Participants are limited to reimburse only what they have contributed—there is no “front-loading” like with an FSA

  • Participant contributions to an HSA also have an annual limit. For 2018, that limit is $3,450 for an employee with single coverage and $6,900 for an employee with family coverage (participants over 55 can add an additional $1,000; also, remember there is no total account limit)

  • Participation in an HSA precludes participation in any other benefit that provides health coverage. This means employees with an HSA cannot participate in either an FSA or an HRA. Employers can work around this by offering a special limited FSA or HRA that only reimburses dental and vision benefits, meets certain deductible requirements, or both

  • HSAs are treated as bank accounts for legal purposes, so they are subject to many of the same laws that govern bank accounts, like the Patriot Act. Participants are often required to verify their identity to open an HSA, an administrative burden that does not apply to either an FSA or an HRA

Health Reimbursement Arrangements (HRA)

An HRA is an employer-owned and employer-sponsored account that, unlike FSAs and HSAs, is completely funded with employer monies. Employers can think of these accounts as their own supplemental health plans that they create for their employees

Pros:

  • HRAs are extremely flexible in terms of design and function; employers can essentially create the benefit to reimburse the specific expenses at the specific time and under the specific conditions that the employers want

  • HRAs can be an excellent way to “soften the blow” of an increase in major medical insurance costs—employers can use an HRA to mitigate an increase in premiums, deductibles, or other out-of-pocket expenses

  • HRAs can be simpler to administer than an FSA or even an HSA, provided that the plan design is simple and efficient: there are no payroll deductions to track, usually less reimbursements to process, and no individual participant elections to manage

  • Small employers may qualify for a special type of HRA, a Qualified Small Employer HRA (or QSEHRA), that even allows participants to be reimbursed for their insurance premiums (special regulations apply)

  • Funds can remain with the employer if someone terminates employment and have not submitted for reimbursement

Cons:

  • HRAs are entirely employer funded. No employee funds or salary reductions may be used to help pay for the benefit. Some employers may not have the funding to operate such a benefit

  • HRAs are subject to the Affordable Care Act. As such, they must be “integrated” with major medical coverage if they provide any sort of health expense reimbursement and are also subject to several regulations

  • HRAs are also subject to many of the same non-discrimination requirements as the Health FSA

  • HRAs often go under-utilized; employers may pay an amount of administrative costs that is disproportionate to how much employees actually use the benefit

  • Employers can often get “stuck in the weeds” with an overly complicated HRA plan design. Such designs create frustration on the part of the participants, the benefits administrator, and the employer

For help in determining which flexible benefit is right for your business, contact us!

by Blake London
Originally posted on ubabenefits.com

Look Backward to Plan Forward | CA Benefits Agents

We have entered Open Enrollment season and that means you and everyone in your office are probably reading through enrollment guides and trying to decipher it all. As you begin your research into which plan to choose or even how much to contribute to your Health Savings Account (HSA), consider evaluating how you used your health plan last year. Looking backward can actually help you plan forward and make the most of your health care dollars for the coming year.

Forbes magazine gives the advice, “Think of Open Enrollment as your time to revisit your benefits to make sure you are taking full advantage of them.” First, look at how often you used health care services this year. Did you go to the doctor a lot? Did you begin a new prescription drug regimen? What procedures did you have done and what are their likelihood of needing to be done again this year? As you evaluate how you used your dollars last year, you can predict how your dollars may be spent next year and choose a plan that accommodates your spending.

Second, don’t assume your insurance coverage will be the same year after year. Your company may change providers or even what services they will cover with the same provider. You may also have better coverage on services and procedures that were previously not eligible for you. If you have choices on which plan to enroll in, make sure you are comparing each plan’s costs for premiums, deductibles, copays, and coinsurance for next year. Don’t make the mistake of choosing a plan based on how it was written in years prior.

Third, make sure you are taking full advantage of your company’s services. For instance, their preventative health benefits. Do they offer discounted gym memberships? What about weight-loss counseling services or surgery? How frequently can you visit the dentist for cleanings or the optometrist? Make sure you know what is covered and that you are using the services provided for you. Check to see if your company gives discounts on health insurance premiums for completing health surveys or wellness programs—even for wearing fitness trackers! Don’t leave money on the table by not being educated on what is offered.

Finally, look at your company’s policy choices for life insurance. Taking out a personal life insurance policy can be very costly but ones offered through your office are much more reasonable. Why? You reap the cost benefit of being a part of a group life policy. Again, look at how your family is expected to change this year—are you getting married or having a baby, or even going through a divorce? Consider changing your life insurance coverage to account for these life changes. Forbes says that “people entering or exiting your life is typically a good indicator that you may want to revisit your existing benefits.”

As you make choices for yourself and/or your family this Open Enrollment season, be sure to look at ALL the options available to you. Do your research. Take the time to understand your options—your HR department may even have a tool available to help you estimate the best health care plan for you and your dependents. And remember, looking backward on your past habits and expenses can be an important tool to help you plan forward for next year.

Wearable Technology in the Workplace | California Benefit Advisors

Don’t lie--we ALL love gadgets. From the obscure (but hilariously reviewed on Amazon) Hutzler 571 Banana Slicer to the latest iteration of the Apple empire. Gadgets and technology can make our lives easier, make processes faster, and even help us get healthier. Businesses are now using the popularity of wearable technology to encourage employee wellness and increase productivity and morale.

Do You Have Mixed Emotions about Open Enrollment? | CA Benefits Agency

It’s typical to have mixed feelings about the annual benefits open enrollment period. Dread for the additional administrative workload and potential benefits cost increases… Anticipation of newer, more attractive, and easier to administer plans… It makes for a fall season that causes many HR professionals and benefits brokers to drown their misery in pumpkin spice lattes.

Better Benefits Attract and Retain Talent

A high-quality employee benefits package is one of the best tools in your arsenal to attract the right talent, enhance employee engagement, and retain your most valuable employees. According to a May 2018 Harris Poll/Glassdoor survey, nearly half (48 percent) of U.S. workers cited attractive company benefits and perks as key factors in their likelihood to apply for a job, and other surveys have found that excellent benefits play a role in retaining employees.

Employees today expect their employers to be creative, consider employee needs, make benefits easy to use, and offer them choices to help manage their lifestyles. Besides health insurance, benefits protecting their incomes, such as disability insurance, financial planning, and retirement plans are important. In addition, consider that employees are tech savvy and expect to have online tools and calculators, along with complete communications, to assist them in making decisions regarding their benefit options.

5 Steps for Success

To prepare for this year’s open enrollment, focus your efforts on designing the best benefits and communications program. Make the most of marketing your benefits programs to your employees by:

  1. Reviewing workforce demographics and benefits usage to get a better understanding of employees’ stages in the lifecycle. Knowing your audience and targeting benefits communications to meet those lifecycle needs makes the benefits more personal and relevant. Employees with young families, older workers preparing for retirement, empty nesters, and young singles all have distinctly different benefits needs and interests.

  2. Packaging benefits by target group with messaging that speaks to each group’s needs while consistently reinforcing the overall benefits strategy and company branding in the messaging. Different communications delivery systems may also be important to different employee groups.

  3. Starting the messaging with why the benefits are structured as they are and what the company’s overall benefits strategy is designed to accomplish. Don’t sugarcoat any bad news about changes in the benefits program. Employees will see through it and resent attempts to hide changes that may be perceived as negative. This is a good time to highlight the important value of their benefits programs, promote wellness, encourage retirement savings, and encourage cost-effective usage of benefits programs.

  4. Keeping the messaging straightforward. Provide clear information, checklists, and decision support tools that are easy to follow. Have the details available but keep the key messages and “what you need to do for enrollment” information central to the enrollment materials.

  5. Bringing company managers and supervisors into the discussions prior to launch. Give them a heads up regarding the upcoming benefits changes and enlist their help in the process.

4 More Things to Consider

The next step is to tackle the “how” of the benefits communications and enrollment program, including:

  1. Communications delivery methods. Electronic communications? Mobile apps? Webinars? In-person company meetings? Text messages? Packages mailed to home addresses to involve the family? Use of social media? Intranet messaging? Gaming techniques? Frequent emails or instant messaging? Live hotline for questions and concerns? Combination of all methods?

  2. Enrollment methods. Online? Manual? Mobile? Make it as administratively simple as possible for both employees and the benefits administration staff. Use electronic tools if the budget allows.

  3. Timing. Establish a timeline working backwards from the date that the information must be completed with the carriers and other benefits providers. Then work forward to deliver the communications program.

  4. Frequency. Employees need time to consider their options and allow the information to soak in. Consider sending employee prompts and reminders so that the enrollment process is completed in a timely manner.

The annual open enrollment communications opportunity is precious — you can influence how employees see benefits or cost changes, motivate employees to change their health or savings habits, and let employees know that management is listening, considering their feedback valuable, and responding to their needs.

by Laura Kerekes
Originally posted on thinkhr.com

Addressing Mental Health Care at Work | California Employee Benefits Advisors

Nancy Spangler, senior consultant at the Center for Workplace Mental Health of the American Psychiatric Foundation, says that one in five adults has a mental health disorder, and one in 10 has a substance abuse problem. In addition, major depression and its associated conditions cost the U.S. over $210 billion every year. Clearly, mental health is an issue we need to investigate both in our offices and across the country.

Many organizations have found that simply by working with employees to recognize depression, build empathy, and find resources, increased EAP utilization while claim dollars did the opposite. In most cases there was no formal program involved—leadership simply began talking about the issue, and the reduced stigma led to better health (and better offices!).

What can we do besides reducing stigma, especially from the top down?At the 2018 Health Benefits and Leadership Conference, experts listed five “buckets” of challenges in addressing mental health: access to care, cost of care, stigma, quality, and integration. Breaking these down into individual components not only helps employees find the support they need and deserve, but it further reduces stigma by refusing to separate mental health from medical coverage or wellness programs. Experts also recommend inviting EAPs to visit offices in person, instead of simply suggesting employees call when they can. Another increasingly popular technique is text-based therapy. This a great fit for many employees because someone is always available and the conversation is always private, even when the client is sitting at a desk in a shared space.

In addition to reducing stigma through transparency and access, employers can also help increase the quality of care available to employees. One key move is simply asking for data. How do vendors evaluate quality, meet standards, and screen for illness? Do health plan members have confidential ways to report their experiences? Mental health care should be seen no differently from other kinds of health care. Employees who have access to quality, destigmatized mental health care build stronger, more functional, and ever-happier workplaces.

 

by Bill Olson
Originally posted on ubabenefits.com

Final Rule on Short-Term Limited-Duration Insurance | California Benefits Firm

On August 1, 2018, the Internal Revenue Service, the Department of Health and Human Services (HHS), and the Department of Labor (collectively, the Departments) released a final rule that amends the definition of short-term, limited-duration insurance. HHS also released a fact sheet on the final rule.

According to the Departments, the final rule will provide consumers with more affordable options for health coverage because they may buy short-term, limited-duration insurance policies that are less than 12 months in length and may be renewed for up to 36 months.

The final rule will apply to insurance policies sold on or after October 2, 2018.

For more information, contact us!


by Karen Hsu
Originally posted on ubabenefits.com

Do Single People REALLY Need Life Insurance? | California Benefits Advisors

Many people make the assumption that life insurance is for married couples and those with kids. While it is true that not all single people need life insurance, there are a number of reasons when it can make (really) good sense.

 

1. You have student loan debt. Many people assume that your debt dies with you, but that’s not always the case. While the loans through the federal government are discharged (aka forgiven) if you were to die, personal loans that have a cosigner are generally not. That means if your parents, for example, co-signed your student loan through a bank, they would be responsible for paying the rest of the loan if something happened to you. There are instances when the bank has called for the loan to be paid in full immediately following a death. You don’t want to leave your parents dealing with grief and loan payments.

2. You’re living with your significant other. When you’re living together, a lot becomes shared financial responsibility. Consider this example: You need both your incomes to meet the mortgage or rent where you’re living. Have you thought about what happens if one of you dies prematurely? Would the other partner have to sell up? Find a new place to live immediately? And this is just one example of many shared financial responsibilities couple have. Adequate life insurance is an easy answer to those questions.

If your parents co-signed your student loan through a bank, they’d be responsible for paying the rest of the loan if something happened to you.

3. You plan on having kids … someday. It may not be now, but when kids do come, so do the expenses and bills. According the USDA, it costs $245,340 to raise a child to age 18, and that’s without factoring in the cost of college. Getting life insurance in place now means you have coverage in place for when you do have a child. Plus, you protect your insurability for the future. … and that leads us to the next reason.

4. You’re young and healthy. Age and health are two major drivers of how much you’ll be paying for life insurance. Why not lock in a low price if you have both of those working for you? Did you know that a healthy 30-year-old can get a 20-year $250,000 term life insurance policy for about $13 a month? Doable, right? Don’t wait until a health issue or age puts life insurance out of your reach.

5. You know you’ll be taking care of family members in the future. This may mean aging parents or perhaps you have a special-needs sibling that you help care for and support financially. What would happen to them if something happened to you and your support disappeared? Life insurance can ensure that there is money in place to fund those needs into the future. This is where it might be wise to consider a permanent life insurance policy (one that’s there for your lifetime, as long as you pay your premiums).

6. It will pay for your funeral. No one likes to think about such things, but the truth is if you die, someone will have to pay for your funeral. You wouldn’t want to leave your parents, partner or other family members struggling with grief as well as paying for a funeral and burial, which can cost an average of $7,100.

If any of this sounds daunting, just know that it does’t have to be. You can start by doing a quick calculation on your own to see if you need life insurance with this Life Insurance Needs Calculator. And just know that you can also talk things through with an insurance agent—at no cost. They will help you figure out how much you may need, and also find a policy that fits into your budget.

 

Originally posted on lifehappens.org

 

Wearable Technology | California Employee Benefits

Don’t lie--we ALL love gadgets. From the obscure (but hilariously reviewed on Amazon) Hutzler 571 Banana Slicer to the latest iteration of the Apple empire. Gadgets and technology can make our lives easier, make processes faster, and even help us get healthier. Businesses are now using the popularity of wearable technology to encourage employee wellness and increase productivity and morale.

According to a survey cited on Huffington Post, “82% of wearable technology users in American said it enhanced their lives in one way or another.” How so? Well, in the instance of health and wellness, tech wearers are much more aware of how much, or how little, they are moving throughout the day. We know that our sedentary lifestyles aren’t healthy and can lead to bigger health risks long term. Obesity, heart disease, high blood pressure, and Type 2 Diabetes are all side effects of this non-active lifestyle. But, these are all side effects that can be reversed with physically getting moving. Being aware of the cause of these problems helps us get motivated to work towards a solution.

Fitbit, Apple Watch, Pebble, and Jawbone UP all have activity tracking devices.  Many companies are offering incentives for employees who work on staying fit and healthy by using this wearable technology. For example, BP Oil gave employees a free Fitbit in exchange for them tracking their annual steps. Those BP employees who logged 1 million steps in a year were given lower insurance premiums. These benefits for the employee are monetary but there are other pros to consider as well. The data collected with wearable technology is very accurate and can help the user when she goes to her physician for an ailment. The doctor can look at this data and it can help connect the dots with symptoms and then assist the provider with a diagnosis.

So, what are the advantages to the company who creates wellness programs utilizing wearable technology?

·      Job seekers have said that employee wellness programs like this are very attractive to them when looking for a job.

·      Millennials are already wearing these devices and say that employers who invest in their well-being increases employee morale.

·      Employee healthcare costs are reduced.

·      Improved productivity including fewer disruptions from sick days.

The overall health and fitness of the company can be the driving force behind introducing wearable technology in a business but the benefits are so much more than that. Morale and productivity are intangible benefits but very important ones to consider. All in all, wearable technology is a great incentive for adopting healthy lifestyles and that benefits everyone—employee AND employer. 

 

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Benefits of an Annual Exam | California Benefit Advisors

Have you ever heard the proverb "Knowledge is power?" It means that knowledge is more powerful than just physical strength and with knowledge people can produce powerful results. This applies to you and your staff's annual medical physical as well! The #1 goal of the annual exam is to GAIN KNOWLEDGE. Annual exams offer you and your doctor a baseline for your health as well as being key to detecting early signs of diseases and conditions.

#1 GOAL

of your annual exam is

to GAIN KNOWLEDGE

According to Malcolm Thaler, MD, "A good general exam should include a comprehensive medical history, family history, lifestyle review, problem-focused physical exam, appropriate screening and diagnostic tests and vaccinations, with time for discussion, assessment and education. And a good health care provider will always focus first and foremost on your health goals."

Early detection can cut costs that result from chronic diseases. By encouraging your employees to schedule AND attend their annual physical, you will see that their productivity will not suffer because of an undiagnosed condition. Early detection reduces no-shows or call-outs; it reduces costs of training a temporary worker brought in to substitute for the employee while out on sick leave; early detection can also cut costs that result from chronic diseases. Employers spend on average $18,000 yearly per employee for costs related to illness and loss of productivity.

So how can you combat these rising costs? Your workplace can sponsor Wellness Programs such as a Nutrition Fair where your employees learn how to make healthy meals for their family, healthy snacks, and how to make wise food choices when going out to eat with co-workers.  Find an exercise program that can be employee led such as a running or walking club, group fitness programs that only require a TV and DVD player, or an employee run cross-fit style fitness program.

"By providing employee wellness programs that include event-specific physicals, many nationwide employers have decreased their employee health care burden by $1 - $3 for every $1 spent.  Other analyses show that wellness programs, including annual physical exams, have reduced employers' health costs by an average of 26.1%."

Here are some tips on fun and easy ways to promote overall health and wellness in your workplace:

1.    Stock the snack cabinets with healthy, pre-portioned snacks.

2.    Offer standing desks to allow workers options to get moving while working.

3.    Find a 5K in your community and put together a company team.

4.    Sponsor different "challenges" like "8 glasses of water a day" or "A mile a day" and the winner of these challenges receives a prize at the end of the month.

Through these easy changes, you will see your workforce gain confidence and better health while losing weight and bad habits! Win-Win!

 

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Disability Income Protection is an Employee Benefits Rising Star | California Employee Benefits

According to recent studies disability income is a rising star in the employee benefits market. This is due to a variety of factors. Most poignantly insurance company attempts to court and educate employee benefit advisers about the product, historically low national unemployment and financial impact of the recent tax reforms.

In discussions with successful financial and employee benefits professionals across the country, one of the common traits observed is their ability to adapt their business in the midst of market change.  To accomplish this, professionals must not only pay attention to industry trends, but also anticipate how to shift an organizational process to maximize positive outcomes.  Of equal importance is optimizing the client experience.  Executed successfully, this type of innovation will result in phenomenal business rewards.

Is this disability income protection trend an opportunity wave you should ride?

When reviewed more closely, Disability Income Protection placements within the context of employee benefits programs is a triple-win scenario for today’s economic environment.

The employer wins because it enhances the ability to attract, retain and recruit employees.

The employee wins as they are provided easy and efficient access to more adequately protect their most valuable asset, the ability to earn income.

The advisor wins because these new product placements drive new revenue and deepen the engagement with the customer. 

If your clients believe in providing traditional group long term disability coverage to their employees, they will likely engage in a discussion pertaining to enhanced disability income protection for executives and key contributors.

In an April 2018 article featured in Think Advisor titled, “Maybe Employers Are Ready to Be Aware of Disability Insurance”, Allison Bell cites comments on two major disability insurance companies’ recent earnings calls that securities analysts see increased employer interest in adding to disability benefits. This is thought to be attributed to the current state of the U.S. economy where near full employment levels have convinced employers that they have to do more to attract and retain good workers.

How can you position this opportunity?

  1. Focus On Incentive-Based Compensation - Most group long term disability insurance programs insure only base salary. However, most executives, sales professionals and other key contributors within an organization are compensated beyond base salary alone. Bonus, ownership distributions, stock bonus plans, and other fringe benefits add up to a significant portion of income uninsured by the group disability insurance program. When disability occurs without any other form of planning beyond a group program, these valuable employees are left in a devastating financial state, drastically disrupting their lifestyles.
  2. C-Suite Engagement. Although disability income programs are often implemented by an HR Team, they may not always have influence to make company decisions or recommendations for benefit programs. These programs are most successful when the executive team is engaged in the initial discussions for development. Focus on your clients where you have a strong relationship with the C-Suite to gauge their interest. After all, they are the most likely to benefit from this type of disability income protection program.

A Life Happens recent study called “What Do You Know About Disability Insurance?” concluded 7 in 10 employed Americans would have trouble in a month or less if they couldn’t earn a paycheck. This statistic emphasizes the importance of disability income protection insurance and why advisers need to be talking to clients about their options.

 

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Opioids in America | California Benefit Advisors

Lately, there’s been a big focus on America’s opioid addiction in the news. Whether it’s news on the abuse of the drug or it’s information sharing on how the drug works, Americans are talking about this subject regularly. We want to help educate you on this hot topic.

Check out this short video on Opioids to learn more!

Disability Insurance

“Your most valued asset isn’t your house, car, or retirement account. It’s the ability to make a living.”

No one foresees needing disability benefits.  But, should a problem arise, the educated and informed employee can plan for the future by purchasing disability insurance to help cover expenses when needed.

When you ask people what is the number one reason disability insurance is needed, most will answer that it is for workplace related injuries. However, the leading causes of long-term absences are back injuries, cancer, and heart disease and most of them are NOT work related.   In addition, the average duration of absences due to disability is 34 months.  So how do you prepare for an unplanned absence from work as a result of an injury or illness? Disability insurance is a great option.

Disability insurance is categorized into two main types.

·      Short Term Disability covers 40-60% of the employee’s base salary and can last for a few weeks to a few months to a year. There is typically a short waiting period before benefits begin after the report of disability.  This plan is generally sponsored by the employer.

·      Long Term Disability covers 50-70% of the employee’s base salary and the benefits end when the disability ends or after a pre-set length of time depending on the policy. The wait period for benefits is longer—typically 90 days from onset of disability.  This plan kicks in after the short-term coverage is exhausted. The individual purchases this plan to prevent a loss of coverage after short-term disability benefits are exhausted.

While the benefits of these disability plans are not a total replacement of salary, they are designed for the employee to maintain their current standard of living while recovering from the injury or illness. This also allows the individual to pay regular expenses during this time.

There are many ways to enroll in a disability insurance plan. Often times your employer will offer long-term and short-term coverage as part of a benefits package. Supplemental coverage can also be purchased.  Talk with your company’s HR department for more information on how to enroll in these plans.  Individuals who are interested in purchasing supplemental coverage can also contact outside insurance brokers or even check with any professional organizations to which they belong (such as the American Medical Association for medical professionals) as many times they offer insurance coverage to members.

As you begin planning for your future, make sure you research the types of coverage available and different avenues through which to purchase this coverage. For more information on disability and the workplace, check out:

·      Americans with Disabilities Act

·      The National Organization on Disability

·      Council for Disability Awareness

·      Social Security Administration

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