Your Benefits Package At Work: Health Insurance.

September 7, 2015 by Frank West

Your Benefits Package At Work: Health Insurance.

One of the most overlooked parts of an overall financial plan is the benefits package you receive from your employer. Making benefits decision can often be a difficult process. Most of the time, I have found that people wait until the very last day of open enrollment with their employer only to quickly check the boxes that they checked last year without any research on what may be their best options. Remember, that your compensation package from your employer should always be looked at from a total economic package point of view. This means looking at your cash compensation plus benefits plus stock options, fringe benefits, etc. If you view your compensation only from a myopic point of view such as salary, you won’t be able to really analyze what you are getting paid from your employer nor the true value of your benefits package.

One of the first decisions you will have to make upon your benefits election is to choose the type of health insurance coverage you want for the next year. It is important to note that your company may have changed health care providers, deductible, or the overall plan they use with the current health insurance carrier so compare closely when you make this election. Here are some items to consider when you select your health insurance through your employer’s benefits package.

What were my ‘real’ out of pocket medical costs for the prior year? Most employer sponsored retirement plans will have the option of allowing you to put money in an FSA (Flexible Spending Account) which is a way to essentially put away dollars pre-tax for items such as medical, dental, and dependent care expenses and use them on a tax-free basis during the year. The rub on these accounts is that they are use or lose during the calendar year, so you don’t want to bank away too much on an annual basis. However, what I have found to be more of the case is that employees either don’t participate at all or participate at a very low amount because they haven’t taken the time to really calculate their out of pocket costs from the prior year.
Can I take advantage of a Health Savings Account plan within my employer’s plan? Although not all employer sponsored plans offer this type of solution, I predict that you will see more and more of these as annual enrollments continue in the years ahead of us. The Health Savings Account really means that you are choosing a high deductible health insurance plan through your employer (it will most likely be the same insurance company). This will automatically reduce your medical premiums you pay out of pocket, and it will also allow you to bank dollars pre-tax into an account that is NOT use or lose for items such as medical, dental, and vision expenses. This could help you reduce your tax liability for the current year, and it may actually reduce your overall medical cost out of pocket if you don’t go to the doctor that often. This is absolutely something to look into come benefits time.
Do my doctor’s still take this type of insurance? If your employer changes insurance companies or sometimes even the type of plan, the doctor’s you currently use may not take that particular type of insurance. If you really like the doctor’s you currently use, it may make some sense to call their offices and give them the particulars around the insurance company and type of plan you are going to choose so you can stay in the group of physicians you really like.
Did anything change with co-pay or in/out of network costs? If you don’t look at this closely, it may appear to you that your overall premiums out of every paycheck are only going up slightly. However, if there was an increase to co-pay items such as doctor’s visits or prescription drugs, then you could see an overall increase for the year. In addition, your plan may have originally covered 100% after your deductible is fulfilled for in network and 80% for out of network procedures. When open enrollment comes, you need to really look at the plan line by line to see if there were any major changes so you don’t get hit with unexpected bills.

Recruit, Reward, & Retain Your Most Productive Employees.

August 31, 2015 by Frank West

Filed Under: employee benefits Tagged With: Executive Benefits

What Types of Insurance Do I Need?

July 9, 2015 by Frank West

When you find a new job and sit down to look at the benefits you may be surprised at the options that are available to you. It may seem overwhelming to consider all of the insurance that you can purchase. Do you really need all of the insurance or can you pass on some of the policies? Is it possible to be over insured? It is also important to check on your insurance to see if you qualify for better rates. Some insurance like home insurance or car insurance is a given> Learn about the other insurance options.

health-insurance-need.jpg - PhotoAlto/Federic Cirou/PhotoAlto Agency RF Collections/Getty Images

1. Do I Need Health Insurance?

Health insurance is something your should have. You run the risk of financial ruin without it. Even if you are relatively healthy, if you are involved in a serious accident or suddenly develop appendicitis, you may end up owing tens of thousands of dollars in medical bills before you are done. If your employer covers you, you should take advantage of that plan, if you are self-employed you may want to consider high deductible health insurance as a money saving option. More »

2. Do I Need Life Insurance?

Life insurance is another benefit that is offered by many employers. Generally employers will offer a basic life insurance policy equal to one year’s salary at no cost to you. You may have the option of purchasing more insurance through your benefits package. If you are single and do not have children, you may be fine relying on just the insurance provided by your employer. However, if you have responsibilities towards a spouse or children you should insure yourself to help them in the event of your death.

3. Do I Need Disability Insurance?

Disability insurance will help to cover you in the event that you are no longer able to work. This insurance will help you to pay your bills and make ends meet while you are coping with an illness or injury. This is generally good insurance to have. Short-term disability will help to cover maternity leaves and fill in the waiting period before disability insurance kicks in.

4. Do I Need Dental Insurance?

Dental insurance can help to pay for your dental checkups and other work that you need done. You need to carefully look over your policy to make sure that your dental benefits are more than the premiums you are paying. If the plan will not save you money, you may want to shop around for a dentist and look for a dental discount card to save on the cost.

5. Do I Need Long Term-Care Insurance?

Long term care insurance will help to pay the cost of care if you end up needing to be in a nursing home or an assisted living facility. Since you are young and in your twenties you may opt to wait on this insurance. A good time to get this insurance is in your late thirties, after that the rates begin to rise rapidly. If you have a condition that makes you think you will need this sooner, you should get it. If you have a family history of certain conditions such as Alzheimer’s you may consider purchasing it earlier to lock in lower premiums.

6. Types of Insurance: Do I Need Cancer Insurance?

Cancer insurance may also be available to you. Unless you have a strong family history of cancer, this is one insurance that you are pretty safe not having. You should make it a priority to save money to cover the extra medical bills that may arise from this or any other serious health problem.

Definition:

Cancer insurance is a benefit that will pay you money if and when you are diagnosed with cancer. The policies vary widely, so it is important to carefully read the policy before you purchase. Some policies will be pay a designated amount once you are diagnosed with cancer. This is to help defray costs such as missed work and out of pocket expenses. Other cancer insurance is supposed to cover the amount that your insurance would not cover.

Many cancer policies are risky because they have so many exclusions and limitations. Additionally your traditional health insurance may decrease the amount it covers as a result of the cancer insurance. You should carefully examine every limitation and benefit before you sign up.

Filed Under: employee benefits, Group Health Benefits, Health Insurance Tagged With: Group Health, insurance broker

5 Ways to Reduce Small Business Health Insurance Costs.

June 30, 2015 by Frank West

Business health insurance is a major cost of doing business, especially for small companies and mom-and-pop firms. With premiums soaring, many small business owners are asking their employees to shoulder more of the financial burden or cutting benefits entirely.

The New York-based Commonwealth Fund, an advocacy group for health care reform, says small business health insurance costs average 18 percent more than those of larger businesses. In California, health insurance costs increased 10 percent in 2006 alone, according to the California Employer Health Benefits Survey.

Those costs have proven too high for many small businesses. According to the U.S. Chamber of Commerce, more than 45 million Americans are uninsured, and approximately 60 percent of the uninsured are employed by small businesses.

In 2006, the average monthly cost for health insurance for small group plans, which are largely used by small businesses, was $311 per month, according to a survey by America’s Health Insurance Plans, a trade group representing health insurance companies. The average premium for a family of four was $814 per month, the association reported.

Small business health insurance may take a huge chunk out of your revenue, but benefits often attract better employees and help retain existing workers. Satisfied, healthy employees are more likely to help your business grow. If you’re struggling to provide health insurance, here are some tips that could reduce your small business health insurance costs.

1. Keep employees healthy. Motorola Inc., for example, has instituted a comprehensive wellness program that includes disease management for afflictions such as asthma and diabetes, as well as offering flu shots, cancer screenings, smoking-cessation sessions and a round-the-clock phone line staffed by nurses. The company found that for every dollar it invested, it saved $3.93, according to a 2003 report by the U.S. Department of Health and Human Services report, “Prevention Makes Common Cents.” Likewise, heavy machinery manufacturer Caterpillar estimates that its wellness program will save the company $700 million by 2015.

Such wellness programs don’t just keep company accountants happy. They’re also popular with workers. Pharmaceutical giant Pfizer Inc. found that 85 percent of its employees in its New York offices participated in at least one wellness program, and that 80 percent used on-site facilities such as fitness centers or physical therapy, according to the HHS report.

2. Reduce coverage. Cutting coverage or asking your employees to contribute more to the plan is a logical step to reducing small business health insurance costs. The downside of this strategy is that it will likely prove unpopular with workers.

It’s fairly common for businesses to exclude dental and vision insurance, but talk to your employees to see what they want covered. They might opt for having dental and vision insurance and a health savings account, for example.

3. Consider health savings accounts. Health savings accounts are an increasingly popular option for owners of small businesses. These tax-exempt accounts, which are used to pay for certain medical expenses, could reduce your small business health insurance costs while giving your employees tax breaks.

You must have a high-deductible health insurance plan to establish a health savings account. For example, in 2007 the minimum deduction for individuals is $1,100; for families, it is $2,200.

That means that you or your employees would have to pay $1,100 out of your own pockets for health care expenses such as doctors’ visits or prescriptions before you are reimbursed by the insurance company.

But there are benefits: In 2007, employers, workers, and their families can contribute tax-free up to $2,850 for individual health savings accounts or $5,650 for family accounts. These funds can only be used to cover health care costs, and employees can take their accounts with them if they leave. The funds generally do not expire.

Contributions and withdrawals are both tax-free, and individuals can claim tax deductions on their 1040 forms – meaning employees don’t need to itemize to get the tax break. Employer contributions are also tax-deductible for business owners but are not required. Individuals can also set up health savings accounts.

To establish or participate in a health savings account, your only comprehensive health insurance can be the high-deductible health insurance plan and they must be offered to all employees.

Health savings accounts benefit healthy employees who do not regularly see doctors. You or your employees can, however, have health insurance that specifically covers ailments, including certain diseases or illnesses, accidents, dental and vision care.

4. Join a group. Small group health insurance plans cover between two and 50 employees, although there are “group of one” insurance plans for the self-employed that offer similar benefits.

The larger your group, the lower your premiums will be. According to the America’s Health Insurance Plans 2006 survey, 80 percent of small groups polled had 10 or fewer employees in their health insurance plans, and the average monthly premiums for individuals was $330. Firms with between 26 and 50 employees paid $287 a month for single premiums.

If your business has fewer than 10 employees, you can still partner with other businesses or individuals and expand your group plan. Note that health care laws are governed by the states, so you’ll want to partner with people in your state.

5. Shop around. Health insurance is a huge business, so shopping around for different providers could reduce your small business health insurance costs. Start by searching the Internet and also ask other owners of small businesses what they pay for health insurance. Insurance agents will charge fees, but you’ll save time and they can investigate health insurance plans for you. The National Federation of Independent Businesses partnered with eHealthInsurance, a national health insurance agency that gives you several quotes online.

Filed Under: employee benefits, Group Health Insurance, Health Savings Account Tagged With: Group Health, insurance broker

Disability Insurance: The Overlooked Employee Benefit.

June 8, 2015 by Frank West

Disability Insurance: The Overlooked Employee Benefit

Does your pay stub include the cryptic three-letter code LTD with a tiny dollar amount that’s deducted each pay period? It stands for long-term disability insurance, and it pays to have it to provide for your family when you can’t work because of an injury or an illness like cancer. But many employees go without it. In fact, despite the fact that more employers are offering long-term disability insurance as an employee benefit, the number of employees insured is dropping.

That’s the troubling trend that the Council For Disability Awareness, a group representing 19 member insurance companies, found in its latest annual review of claims data for 2013. More than 213,000 employers offer long-term disability insurance through those companies, a slight increase for the second year in a row, after declines from 2009 to 2011. Yet the number of insured employees declined roughly 1.5% to 32.1 million last year (in 2009, 34 million employees had coverage).

There are a couple of reasons for the changing disability landscape, according to Barry Lundquist, president of the Council. One factor is that employers are focused on compliance with the new Affordable Care Act’s health insurance provisions—so employers and agents/brokers are saying they’ll deal with other benefits like disability insurance later.

Another factor is that when employers are adding disability insurance as a benefit today, it’s more likely that they add it as a voluntary benefit. That means the employee pays the full cost. Historically, the employer has paid the full cost, or at least for coverage up to a certain level. With employer-paid plans, employees are automatically enrolled. Sometimes you have the decision whether to make salary deferrals to increase your coverage. But with voluntary plans, enrollment hovers around 40%, Lundquist says.

Filed Under: Disability Income Insurance, employee benefits Tagged With: Disability Income Protection, employee benefits, Paycheck Protection.

5 Major Employee Perks That Help You Save Money.

June 1, 2015 by Frank West

Five company benefits you should take advantage of:

They say that a penny saved is a penny earned. Unfortunately, a penny earned isn’t always saved. With the high cost of living expenses, school tuition, family care, car maintenance, general inflation, a still-struggling economy, and — worst of all — debt, it’s a wonder some Americans manage to save any money at all. Even so, they might be leaving a huge source of savings opportunities untapped in the form of company benefits.

A scarcity of savings
The financial demands of everyday life often mean that people must live hand to mouth, paycheck to paycheck, with barely enough income to survive. Setting aside some savings, whether it’s for that rainy day next week or that retirement fund four decades from now, can become an impossibility — an intangible goal that’s set aside for months or years.

In a July 2011 poll of 2,700 people by the National Foundation for Credit Counseling (NFCC), 64% of respondents said they would borrow from family or friends, sell their belongings, or disregard other monthly expenses in the event of an unplanned $1,000 expense — anything but dip into their savings.

The remaining 36% replied that they would turn to their financial reserves, but there’s no indication of how soon, if ever, they’d be able to replenish that money.

Five company benefits you should take advantage of
There are plenty of ways to rescue your budget and save some money in the process — and you need look no further than your own workplace. Many companies offer benefits and compensation plans for employees that sadly go unused by many working professionals.

1. Retirement benefit plans
Once perceived as an alternative to Social Security pensions, retirement benefit plans are quickly becoming the norm. A 401(k) provided directly by employers can help their employees set aside cash directly into their retirement funds.

As with all important financial decisions, there are some pros and cons to consider before building your savings portfolio:

Pros:

401(k) contributions are pre-tax dollars, which means an employee’s deposits to the account aren’t taxed until distribution.
A high contribution ceiling that’s increasing: Starting in 2015, employees are free to funnel $18,000 per year into their 401(k)s, or up to $24,000 if they’re aged 50 or older.
Employers will generally match an employee’s contribution up to a percentage of the employee’s salary — up to 6% on average.
Don’t be pressured to choose between Social Security, personal savings, or a 401(k) for your golden years; you can build up and manage all three to your personal preferences.

Cons:

Although 401(k)s are a great way to build a nice post-career nest egg, if you pull those funds out prematurely, you could be faced with hefty early-withdrawal penalties.
Starting at age 70-1/2, you must begin withdrawing a minimum amount from the account each year. Otherwise, you’ll be penalized 50% of the amount you were supposed to withdraw.

Employer-sponsored retirement benefit plans are a great way to plan ahead for your post-work years, yet only one-third of Americans take advantage of them through their jobs, according to the Department of Labor.

2. Employer tuition assistance
Continued education can be invaluable for anyone looking to gain knowledge and enhance their professional skill set. It’s never too late to get into student mode and hit the books. However, tuition fees and student loans also come at a high cost that can be prohibitive.

So what better arrangement than getting paid to go to school?

Most employers offer tuition reimbursement for employees who enroll in matriculating classes or job-training seminars. If it’s directly related to your current position, you might be fully compensated. It’s also one of the best win-win situations for employee retention; continued training sends the message to superiors that you’re on the job and eager to grow and expand your career skill set.

However, as with any company-backed program, check with your human resources department to see how much schooling they’ll cover. Some employers may also have restrictions regarding the types of courses you can pursue and might even mandate a minimum GPA in order to qualify for reimbursement.

3. Automatic savings transfer
It’s one of the simplest, most straightforward ways to direct income from point A to point B. If you’ve already made arrangements with your bank to automatically transfer money from your checking to savings account, getting your employer on board to do the same can only help both your bank account and personal savings discipline.

Sign up for direct deposit and specify to your employer that a portion of your paycheck be allocated to a savings account or other destination of choice.

This option is one of the simplest and most direct ways to save money because it divides funds and then diverts them directly from one bank account to another, without any prerequisites or fine print to consider. No matter whether it’s $50, $100, or $700 a month, you can change the amount of money transferred to a savings account automatically. Further, the savings reserve is fixed and won’t devalue itself depending on market conditions.

4. On-site child care benefits
The U.S. Department of Agriculture reported last year that a middle-income, two-parent household will spend $39,420 on child care and education alone up through a child’s 18th birthday, grossly diminishing a family’s ability to save money for other necessities. But the advantages of an on-site, workplace day care are many, not the least of which is the shared belief that happy kids make for happy workers.

Bloomberg cited a study of hundreds of workplace-sponsored day care programs, and over 1,000 employees claimed that bringing their children to work was more affordable.

5. Discounts, fringe benefits, and other perks
Just as books of coupons often go unredeemed, you could be missing out on some valuable discounts offered through your employer. Many companies strike membership deals with airlines, insurance providers, and local health clubs, for example.

With a little planning, research, and follow-through, conserving money though your employer is simply a matter of partnering with your workplace and carefully managing your paycheck and the resources provided to you. Expenses might add up, but in time, so can your savings account. Check with your human resources department and inquire what programs and incentives are available to you.

Filed Under: employee benefits, employee perks Tagged With: employee benefits

Disability Insurance: The Overlooked Employee Benefit

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