Vision Insurance

Sunday, February 21, 2016

The Definitive Guide to Workplace Benefits

✔ Michael Kuhn 2/21/2016 10:46:00 PM

Below you'll find my Guide to Workplace Benefits. Let me know if you have any questions about my guide in the comments section below. I want this post and along with my workplace benefits videos to be the best, most comprehensive and helpful guide about workplace benefits available. Your questions will help me provide a better, more insightful guide.

Health Insurance Benefits, Programs & Services

Health insurance pays for covered medical expenses, while other programs provide tax savings for health care expenses and other services to promote and treat your health and well being.

Major medical plans
Prescription drug coverage
Section 125 plan
Flexible spending accounts (FSA)
Health savings accounts (HSA)
Employee assistance program (EAP)
Wellness programs
Tobacco cessation programs
Teledoctors
Healthcare price transparency tools
On site health clinic
Athletic facilities

Dental & Vision Insurance Benefits

Taking care of your teeth is what dental insurance benefits are all about. From eye exams, to eyeglasses to contacts, vision insurance help employees pay for the costs of eye care.

Life Insurance Benefits

Life insurance provides a death benefit to a beneficiary when an insured that is covered under the policy dies. Below I've listed the types of life insurance that might be made available to employees at work either under the terms of a group term life insurance contract or an individually owned contract.

Even though life insurance is a pretty simple concept, many employees still get confused about what their life insurance options are both at work or on their own on an individual basis. Most employees know they have something at work but aren't sure how much or what type it is.

It's not also not uncommon for those responsible for administrating the life insurance programs for an employer group to not know all the details about how they work. This sometimes includes not just the human resources professionals but also the agents who put these programs in place.

Here's a collection of resources to help you get a better understanding of life insurance provided at work.

Flexible Working Hours, Telecommuting, Paid Time Off, Sick Pay, Workers Compensation & Disability Income Insurance Benefits

Paid time off and medical leave provide time off when you need it while sick pay, workers compensation and disability income insurance policies provide money to employees when they are sick or hurt and can't work because of it. Flex time and telecommuting provide you more freedom and control in how they work.

Paid time off (PTO)
Sick pay plans
Workers compensation
STD: Short term disability income
LTD: Long term disability income
Family medical leave
Flex time
Telecommuting

Critical Illness/Specified Disease Insurance, Accident Insurance & Other Indemnity Insurance Benefits

Critical illness and specified disease insurance pays you money in the event an employee is diagnosed with a critical illness or specified disease. Accident insurance pays benefits directly to the insured for covered services related to an accident, while other indemnity insurance programs offer payments for other medical services not covered by health insurance plans.

Articles about critical illness you can read here on my site:

Long Term Care Insurance Benefits

Long term care insurance is a little understood insurance benefit that some employers choose to offer their employees.

Saving Money, Retirement Plans and Financial Planning

Saving money for emergencies, for retirement and planning for the future.

Direct deposit
Premium direct deposit
Savings bonds
Social Security
Retirement plans
Stock options
Financial consulting

Other Workplace Benefits

In addition to insurance benefits, there are a number of other benefits that employers offer to their employees. Here are a few additional workplace benefits you might see offered.

Benefit statements
Purchasing programs
Home & auto insurance discounts
Prepaid legal plans
Employer sponsored identity theft protection
Pet insurance
Educational assistance
Achievement awards
Adoption assistance
Dependent care assistance
Employee discounts
Transportation (commuting) benefits
Cell phone
Moving expense reimbursement
Unemployment insurance
Meal plans

The above guide to workplace benefits is a good foundation for the types of programs that employers might choose to offer their employees.

Tuesday, October 20, 2015

Accident Insurance Critical Illness Insurance Dental Insurance Disability Income Insurance Health Insurance Life Insurance Vision Insurance

What are Voluntary Benefits?

✔ Michael Kuhn 10/20/2015 01:13:00 AM

You might think of voluntary benefits as insurance benefit plans that employees can purchase "voluntarily" through their employer if they decide they want to enroll in them. While technically this is true, it also implies that some insurance benefits are required to be purchased by the employee. But this is not the case. Employees are not required to buy any insurance benefits at work. All insurance products offered for purchase through an employer are optional benefits as far as the employee is concerned.

Mandatory Benefits: The Employer Must Provide Them By Law

For an employer though, it's different. There are some benefits that the employer must provide to employees. Mandatory benefits are things like:

Paying social security taxes
Providing unemployment insurance
Providing workers' compensation

It's the law - or mandatory - that an employer provide the benefits listed above. They have no choice.

Voluntary Benefits: The Employer Can Offer Them If They Choose To Do So

However, it's not the law that an employer offer a product like life insurance that employees can purchase and so life insurance is a voluntary benefit as far as the employer is concerned.

So, the main reason we use the word voluntary is because there are some benefits employers must provide to employees that are mandatory. Anything not required by law is voluntary. The employer can offer them if they want but they don't legally have to.

Just Because A Benefit Is Voluntary Doesn't Mean There Are No Underwriting Requirements

I make the distinction between mandatory benefits and voluntary benefits being used in terms of whether an employer has to offer them by law for a very important reason. The reason is that most employers often use the word voluntary in a different context.

The context is that the word voluntary seems to mean that it's voluntary that the employee buy it and therefore there are no underwriting requirements on the employer to offer programs to their employees when there are.

It's important to understand that any program you offer to your employees does come with underwriting requirements attached to them, even if the employee pays the full premium.

Old School View Of Voluntary Benefits - Worksite Benefits

Traditionally, employee benefits have been broken down into two distinct categories. Those two categories are:

Group insurance This is insurance provided through group contracts that are owned and controlled by the group. These would be things like basic group term life insurance, group dental and group disability. While enrollment in these types of group benefits is voluntary, aside from the group health insurance, group contracts are often labelled ancillary benefits to differentiate them from the second category of insurance benefits.
Worksite benefits This is insurance provided through an individual insurance contract that is owned and controlled by the employee offered through work. These would be things like life, cancer and accident insurance. These types of insurance have historically been called worksite benefits or "voluntary" benefits. Typically, worksite products have their roots in individual contracts. Since employees owned these contracts, they could continue them after they left employment as well.

Both group and individual insurance offered through an employer help the employee. That's because the employer uses the group's buying power to negotiate a better deal than employees can get on their own for insurance they feel they need. This could be seen in:

Lower insurance premiums
Reduced underwriting requirements
Both lower premiums and reduced underwriting requirements
The convenience of paying premiums through payroll deduction

These are the true benefits that employers offer when offering voluntary benefits.

What I see in practice is that most employer groups often look at the group insurance contracts as the real benefits and focus most of their time on those. They often gave little thought or importance to the old school worksite benefits.

The insurance companies and agents offering those benefits through an employer were typically the second class citizen of insurance benefits with employers. More times than not, it was implied that the worksite benefits are available but we aren't going to do much to facilitate their purchase.

With the rising costs of health insurance, this attitude is changing because employer groups are reducing their contributions to the overall costs of an employee's benefits. Since the financial burden on the employee is increasing significantly, employers are under a lot of pressure to help employees find ways to assist them in paying these rising costs at their own expense.

The answer is a bigger focus on voluntary benefits to help fill those financial gaps.

The New Voluntary Benefits - Workplace Benefits

A transition has been made over the last few years from the old school of group contracts and individual worksite contracts. Those lines are being blurred. Today, the new landscape is that you've got the health insurance and then everything else is referred to as workplace benefits, aka "voluntary" benefits. These benefits are written through group contracts more than individual contracts like in the past.

These workplace benefits are now broken down into five different types of insurance plans. Those are:

Life insurance Life insurance provides money to employee's beneficiaries in the event they die to soon. The types of life insurance offered can be term, universal or whole life insurance.
Disability income insurance Disability income insurance provides income replacement in the event of a disability. There are two types of disability insurance, short term and long term.
Supplemental health insurance Supplemental health insurance provides medical coverage for gaps in an employer paid health insurance plan.
Accident insurance Accident insurance provides cash paid directly to the employee in the event of specific accidents.
Critical illness/specified disease insurance Critical illness coverage provides a lump sum payment to the employees in the event of certain catastrophic illnesses like cancer, heart attacks, and strokes.

Rising health insurance costs have put voluntary workplace benefits in the spotlight. Employers have figured out they can reduce health plan benefits or raise deductibles in the main health plan and then reduce their overall premiums. Employees then have the choice to fill the gaps important to them with the menu of workplace benefits but now at their own cost.

Conclusion

That's a summary of what the industry's view of what voluntary benefits are today.

In my view, I believe that if the employee has to pay the full cost of a voluntary benefit, then the benefits of ownership should also be included. So, while the industry has shifted their focus more on using group contracts to fill the need of the old worksite benefits, I still prefer individually owned insurance contracts at work whenever possible.

If you have any questions, feel free to let me know in the comments below.

GLG America