July 2013

A recent nationwide study by the Washington National Institute for Wellness Solutions (IWS) found that only 10% of middle-class workers believe that they have enough savings to cover medical emergencies and the long-term cost of a critical illness.

Diseases such as cancer, heart disease, or Alzheimer’s can be life-changing financially, as well as personally. Although most respondents said that, even with Medical and Disability Income insurance, they would need out-of-pocket funds to cover their expenses from a serious medical condition, they lack the savings to fall back on. Nearly half (45%) felt they would never recover financially from a battle with Alzheimer’s or dementia; for cancer, the percentage is 38%.

Out of 1,001 survey participants between the ages of 30 and 66 and annual household incomes of $35,000 to $99,999, 75% have saved less than $20,000. Among these, half have less than $2,000 in savings – and one in four have no current savings.

One-fourth of respondents “did not know” what resources they would use to help offset their expenses, says IWS. Others would use credit cards (28%), loans from friends and family (23%) or financial institutions (19%) to help cover what insurance doesn’t.

Washington National Insurance Co president Barbara Stewart advises employees to give themselves a reality check about the financial burden of critical illness. “Find out what your current insurance will – and will not – cover” says Stewart, “and then assess your overall financial health. Identify the gaps between the resources you would need and the options you have.”

We’d recommend that you offer your employees Critical Illness coverage as a voluntary benefit that will provide an extra layer of financial protection when they face the challenge of a serious disease.

Long-Term Disability insurance (LTD) has been making headlines lately. According to The Wall Street Journal, although only 0.5% of federal disability recipients return to work, nearly 20% of workers with employer-paid LTD do. So with a success rate 40 times higher than that that of the government program, why is it that nearly 100 million workers don’t carry this benefit?

“There’s a coverage gap when it comes to disability, and educating [employees] is going to be important,” says Andrew Sullivan, SVP of Disability and Small Market Business at Prudential Group Insurance. He adds that worker awareness of their vulnerability to illness and accidents, and the availability of LTD will become increasingly widespread as more employers shift to 100% voluntary coverage.

The trend toward sharing the cost of coverage between employers and employees or having it paid entirely by employees depends on the quality of the enrollment support provided. One way of getting the younger generation of workers enrolled is to shorten the length of coverage, by letting employees choose how long they want to be eligible, say for two years, instead of until age 65. This approach can be especially effective because younger people often don’t believe that they’re going to get sick or have any accidents happen to them.

More and more employers are looking for reports and analysis of productivity and wellness programs to provide guidelines on how they can minimize or to prevent workplace-related disabilities.

According to insurance experts, widespread implementation of the Affordable Care Act over the next 18 months will have a significant impact on LTD and other voluntary benefits products.

For more information, please call or e-mail our agency.

Death will come to all of us – including your workers. At this emotional and stressful time, voluntary end-of-life products can help provide invaluable financial and medical comfort to those who your employees have left behind. In offering them these benefits, it’s essential to show sensitivity and concern for their needs.

Benefits such as Hospice Care, Travel Assistance, and Funeral Prepayment deal with highly sensitive issues and problems that have a significant impact on workers and their families, young and old alike. Hospice Care, for example, will help employees pay for health-related end-of life costs that their Health insurance doesn’t cover; Travel Assistance picks up the tab for their emergency medical treatment while traveling.

To help your employees make wise choices, you need to listen to their end-of-life issues with care and empathy based on an understanding of their needs. Make sure they understand that these benefits can offer financial assistance for them and their families if a terminal medical condition leaves them unable to work. Give workers a choice of programs based on their individual situation – for example, stressing the value of hospice care to a worker with a family history of cancer.

Do not try to “hard sell” end-of-life benefits! Bear in mind that it takes time for employees to find their emotional and financial comfort level in absorbing this information and making the best decision for themselves and their families.

The Employee Benefits specialists at our agency can offer you access to a wide variety of these programs and recommend those that are best suited to the needs – and pocketbooks – of your workers. Please feel free to get in touch with us at any time.

Are you getting the best return on your investment in employee benefits? Unfortunately, it’s not always not easy to answer this question. You might well have too much information on some programs – and too little on others.

To help employers evaluate the cost-effectiveness of health-related benefits program, experts recommend these guidelines:

1. Focus on the overall picture. It can be easy to miss the forest for the trees. For example, when measuring the impact of a return-to-work program, it’s easy to determine whether disabled employees are getting back on the job sooner. However, you also need to consider the overall impact of the program on your other health-related benefits.
2. Share information among programs. Most employers manage their health benefits in separate silos – Medical insurance in one place, Disability in another, and Workers Compensation in a third. Be sure to distribute every incident of medically related absence throughout the company. The more effectively you integrate your data among all your benefits programs, the better.
3. Benchmark your results against those of your peers. The easiest and most straightforward standard is how comparable companies in your industry are doing. Although this might not be a precise comparison, it should give you a fair idea of what your competitors are doing right (and wrong) with their benefits programs – offering guidance you can use to improve yours. For example, to compare your Short-Term Disability program with these of other companies, consider how the incidence and duration of disability incidents are related to underlying diseases in the workforce and the design of the plan (the elimination period, rate of wage replacement rate, maximum benefit period, and so forth).

We’d be happy to help you evaluate the cost-effectiveness of your benefits program. Just give us a call.