Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Brian Dawood,
Assurat Employee Benefits:
952.285.6128
br**********@******nt.com
Assurant
by Brian Dawood
IN TODAY’S challenging economy, you may be wondering how you’ll be able to afford the benefits your employees value.
Even if you have the same amount to spend on benefits as in the past, the increasing cost of medical insurance is probably requiring more of your budget, and leaving less for non-medical benefits. You may think you can’t afford to offer popular coverages, such as dental, life and disability insurance.
What you may not know is that employers have three options when it comes to providing benefits for employees. You can choose to pay for all, some or none of the premium.
Due to increasing medical insurance costs, the third option, where employers allow employees to pay 100 percent of the premium, is becoming increasingly popular. In fact, according to the Eastbridge Voluntary Overview, 64 percent of all employers offer at least one employee-paid product in their benefits portfolios. And 35 percent of all employed Americans own at least one voluntary product.
Voluntary products can enable you to enhance your benefits package at little cost beyond administrative expenses. At the same time, employees are able to purchase the benefits they want at more affordable group rates through payroll deduction.
Not only do employees generally spend less than they would if they purchased coverage on an individual basis, but also they are spared the task of researching available options on their own.
Plus, offering voluntary coverages through the workplace indicates your endorsement of the products, which can encourage employee participation in the plan.
Similar to high deductible health plans, voluntary benefits address the trend towards “consumerism,” allowing you to select the products you wish to offer, in the way that best fits the lifestyle needs of your employee group. Voluntary benefits also give employees the ability to pay for what they need, because they’re able to choose products and coverage amounts.
As a small-business owner, you should be aware that many employee benefits carriers have created voluntary non-medical products with you, your employees and your collective budgets in mind. When you talk with your broker about the options available, you’ll find that pricing of voluntary products is very competitive because risk is based on group employee demographics instead of an individual. Voluntary products can offer significant value, particularly when it comes to life, disability and dental insurance.
According to LIMRA International, one third of all adults in the United States carry no life insurance at all. When adding voluntary term life insurance to your benefits portfolio, you generally have the opportunity to choose between a multiple of earnings or a unit plan.
With a multiple of earnings plan, employees may purchase coverage in increments based on their annual salary, generally up to five times the amount.
With a unit plan, they may purchase coverage in units of a specified dollar amount (often $10,000).
Employers may also decide whether or not to make accidental death and dismemberment and/or dependent life coverage available for purchase with basic life insurance.
One feature employees particularly appreciate under a voluntary life product is portability. This means an employee can keep the coverage in place for a specified amount of time if he or she terminates employment with your company.
As with employer-paid coverage, not all voluntary disability insurance is the same. Some plans are designed to provide more comprehensive coverage, while others are created to cover only the most serious disabilities. The definition of disability included in a contract determines the circumstances under which a benefit will be paid and most benefits carriers offer you a choice of definitions to at a variety of price points.
Again, with consumerism in mind, you can offer an incremental plan that enables employees to purchase coverage that fits their needs. They can purchase coverage in dollar units up to a specified percentage of their salary. And similar to voluntary life, employees may be able to convert their group policy to individual coverage if they terminate their employment with you. It’s possible for employees to obtain solid disability coverage for as little as $20 per month.
According to research by LIMRA International, employees consider dental coverage the most important employee benefit after medical insurance. And a 2000 Surgeon General’s report indicates that about 70 percent of individuals with dental insurance receive regular preventive care versus only about 51 percent of those without coverage.
Voluntary dental insurance plans provide an affordable way to offer coverage and can help ensure that your employees receive the regular dental care they need to maintain not just their oral health but their overall health. This can help reduce medical costs and absenteeism.
Employers can a variety of plans that offer a choice of annual maximums, deductibles and coinsurance. You also have the opportunity to select the level at which preventive, basic and major services will be paid.
According to claims data from my employer, more than half of all dental procedures rendered during 2007 fell under the preventive or basic services categories, so think about choosing a plan designed to cover the majority of dental care provided rather than the minority.
If you haven’t done so already, talk with your broker about your benefits package and how voluntary products can enhance your offerings. Keep in mind, an employee survey can be an effective way to gauge employee interest in voluntary products.
With the help of a knowledgeable broker, you should have no trouble finding voluntary employee benefits that can help you and your employees stretch your budgets.
