Employees may think that they can’t afford a big policy, but it’s often a good idea to join the plan at the lowest level and cost, even if the policy is not large, says consultant Mike Miles. That gets your foot in the door and often ensures that you can “buy up” in the future on a guaranteed issue basis should something happen that would make you uninsurable.
Miles is vice president and senior employee benefits consultant at Gregory and Appel Insurance. During his presentation at a recent boot camp sponsored by BLR®, he was joined by colleague Janet McClure, vice president and worksite marketing team leader.
The Challenge of Well-Off Decision Makers
One interesting problem that McClure has encountered is that the decision makers are generally among the more highly compensated employees, who tend to have enough discretionary income to deal with most financial emergencies.
Unfortunately, that colors their decisions, says McClure, and may mean that a program that would be very helpful to those without significant discretionary income isn’t offered because the decision maker doesn‘t understand the needs of the workers farther down the totem pole.
Accident Plan—How It Fills Gaps
McClure offers this comparison that a client asked for. You can see that the carriers provide different reimbursements, but overall, both carriers will make payments that cover a good portion of the overall cost of treatment.
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Claim Example—Accident with Fractured Ankle
|
Benefit |
Carrier A Pays |
Carrier B Pays |
|
ER visit |
$50 |
$150 |
|
Initial Hospital Admission |
$1,000 |
$1,000 |
|
7 Days Inpatient |
$1,750 |
$1,400 |
|
Major Diagnostic Exam |
$150 |
$100 |
|
Surgery—Open Ankle Fracture |
$1,200 |
$600 |
|
Appliance (Crutches) |
$100 |
$25 |
|
MD Follow-Up Visit |
$50 |
$300 |
|
Physical Therapy |
$150 |
$0 |
|
Accident Policy Pays |
$4,450.00 |
$3,575.00 |
|
Amount Owed for Medical Expenses (Estimated) |
$5,073.42 |
$5,073.42 |
|
Employee Loss of Income Based on 8 Weeks and $42K Salary and Collecting STD (Estimated) |
$1,885.03 |
$1,885.03 |
|
Total Employee Out‐of‐Pocket Expense (estimated) |
$6,958.45 |
$6,958.45 |
|
Amount Not Offset (Actual Out-of–Pocket Expense) |
$2,508.45 |
$3383.45 |
Benefits Beyond Health
Although most voluntary insurance is health-related, many employers do offer other types, including:
- Homeowners/auto Insurance
- Identity theft (rampant)/legal plans (litigious society)
- Discount purchasing programs, especially for big-ticket items like appliances and computers (This may be particularly attractive to employees with low credit ratings or whose lines of credit are full, because those don’t matter when paying through payroll deduction.)
- Pet insurance
Set It and Forget It
When it comes to insurance, people tend to “set it and forget it,” says Miles. People spend a lot more time researching their new car than they do considering their insurance and financial situations. It’s important to do a complete and thorough personal lines review, says Miles. Often a voluntary lines provider can help with the counseling.
Voluntary benefits—one more thing for comp and benefits managers to cope with. Meanwhile, “Maintain internal equity and external competitiveness and control turnover, but still meet management’s demands for lowered costs.” “No more cost increases for health care.” Heard those before?
Many of the professionals we serve find helpful answers to all their compensation questions at Compensation.BLR.com®, BLR’s comprehensive compensation website.
And there’s great news! The site has just been revamped in two important ways. First, compliance-focused information has been updated to include the latest on COBRA, Lilly Ledbetter, and the FMLA. Second, user features are enhanced to make the site even quicker to respond to your particular needs:
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The services provided by this unique tool include:
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Try BLR’s all-in-one compensation website, Compensation.BLR.com®, and get a complimentary special report, Top 100 FLSA Overtime Q&As, no matter what you decide. Find out more.
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- Merit Increase, Salary, and Benefits Surveys. The service includes the results of three surveys a year. Results for exempt and nonexempt employees are reported separately.
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If we sound as if we’re excited about the program, it’s because we are. For about $3 a working day, the help it offers to those with compensation responsibilities is enormous.
This one’s definitely worth a look, which you can get by clicking the links below.
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