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Articles for employers

Employee benefits are designed to make life easier for your hard-working team. But selecting, implementing and maintaining benefit programs can be a daunting task. Our Inside Track series offers a closer look at the products, features and regulations that drive the benefits business.

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Social Security Disability Income: Apply early for maximum benefits

Social Security Disability Income (SSDI) can provide important support for disabled employees—even if they eventually return to work. To maximize their potential benefits, employees on employer-sponsored disability leave should submit SSDI applications as soon as possible, even if they assume their disability is temporary. Fortunately, many carriers utilize vendors who specialize in assisting employees with this time-consuming process. Learn more about SSDI and how vendors can help.

Options for pregnancy-related leaves

Pregnancy is an amazing, yet challenging, time of life. Fortunately, many employers offer short-term disability income insurance that provides replacement income for time away from work due to sickness or injury, including time away for pregnancy-related conditions. Review some of the ways short-term disability coverage can help support pregnant employees and how these benefits may complement federal and state-specific leaves.

Maintaining proper beneficiary designations

Life insurance can be tailored to fit a wide array of financial needs, but the ultimate goal for most people is simple: passing along a death benefit to selected beneficiaries in the event of the insured’s death. That’s why designating beneficiaries is not a step to take lightly. Here’s what employees should know to avoid delays in payouts or benefits not being paid out as intended.

Understanding the “three-year look-back” rule

Disability insurance payments may be considered taxable income, and in some circumstances, taxes may be owed on only a portion of the benefits. In these cases, the percentage of benefits to be taxed is calculated using an IRS formula known as the “Three-Year Look-Back.” Understanding this important rule can help employers better discuss the tax implications of disability benefits with employees.

Disability benefits and the “FICA match”

Disability income insurance can help employees when they need it most. Since disability benefits may be considered taxable income, employers must be prepared to report and match any Social Security and Medicare taxes—commonly known as FICA—paid by employees when these benefits are paid. Get to know the rules and regulations regarding the “FICA match.”

Continuity of coverage when changing group life carriers

A change in group life insurance carriers is a seamless—perhaps even unnoticed—process for most workers. However, employees who are not actively at work on the new policy’s effective date could find themselves cut off from life insurance coverage. Fortunately, many carriers include continuity of coverage provisions in their contracts to help protect these employees.

Conversion vs. portability

Employer-sponsored group life insurance is often the only financial protection employees have. As a result, many workers are concerned about losing this coverage when they leave their current employer. Fortunately, most group life insurance policies include provisions that allow employees to either convert their coverage to a permanent personal policy, or to temporarily continue their existing coverage. 

Waiver of premium benefits: questions answered

Group life insurance provides affordable coverage for employees, but what happens if employees can no longer work because of permanent disabilities? Waiver of premium (WOP) riders offered with many carriers’ group life insurance products allow employees who become permanently disabled to continue their life insurance coverage without paying premiums. 

Summary plan descriptions (SPDs) under ERISA

Most employers and benefits professionals are familiar with the Employee Retirement Income Security Act—or ERISA. In addition to employer-sponsored retirement and health care plans, ERISA rules also apply to “employee welfare” plans such as group life and disability policies. Fortunately, guidelines permit the use of “wrap” documents or “wrappers” to provide the necessary information and disclosures for group life and disability plans to remain ERISA compliant.

The value of return-to-work programs for group disability plans

An employee’s time away from work due to a disabling illness or injury can have practical and financial implications for an employer. That’s why many insurers embed “return-to-work” programs into their group disability plans. An efficient return-to-work program can help contain the costs and reduce the duration of a disability—a win-win for both employers and employees.

Imputed income and the straddle rule

Group term life insurance is a benefit most employees don’t have to think about until they need it. But employers need to be aware of the potential tax implications of employer-sponsored group term life insurance coverage with benefit amounts over $50,000. Employers are responsible for including this taxable income—known as imputed income—as wages on employee W-2 forms. 

Navigating family and medical leaves

Since the introduction of the federal Family and Medical Leave Act (FMLA) in 1993—and the subsequent addition of state and municipal leave programs—employers have had increased responsibility for managing leaves of absence for their employees. That’s why many employers look to outside resources to help manage their leave administration platform.

The ADA and the “100% rule”

Under the Americans with Disabilities Act (ADA), employers are expected to make reasonable accommodations to assist employees dealing with disabling conditions. This typically prevents employers from requiring that an employee be 100% healed before returning to work. Fortunately, resources are available to help employers navigate this complex issue.

Pre-existing condition exclusions and group disability claims

Group disability insurance policies typically contain provisions that exclude coverage—or limit the payment of benefits for claims—based upon certain medical conditions that existed before an individual is covered under a plan. When considering disability insurance coverage, it is important to understand how these exclusions or limitations will affect your business and your employees.

Defining “disability” in group insurance contracts

There is no one-size-fits-all definition of “disability.” Because the scope, severity and duration of employees’ conditions vary, insurers look at several components when determining whether an individual is disabled according to the terms of a group contract. 

Understanding evidence of insurability

Applying for group life insurance is generally a simple process. However, when an employee’s requested coverage exceeds the group policy’s guaranteed issue amount, “evidence of insurability,” or EOI, may be requested by the insurer. EOI requirements vary by product and provider, but most carriers rely on similar forms and tests to obtain needed information. 

Accelerated death benefit options

Most people associate life insurance with a lump-sum payment to beneficiaries at the time of an insured’s death. But there are times when the policy’s death benefit may serve the needs of the insured while he or she is still alive. An “accelerated death benefit” is an option found in many group life insurance policies. This provision allows terminally ill insureds to access a portion of their death benefit to help cover expenses such as health care and nursing homes.

Navigating statutory state disability plans

Among the many details employers must consider when shopping for disability benefit plans are the states where their employees work. Five U.S. states and one U.S. territory currently have state-mandated—or “statutory”—requirements for short-term disability coverage. Regardless of company size, most employers with at least one employee working in the statutory state must provide the state-required coverage to those employees or be subject to fines.

Coping in a complex world

The realities of day-to-day life can have a larger effect on employee performance and morale than many employers realize. Employee assistance programs (EAPs) provide resources employees may need to cope with personal problems that could ultimately affect your business.

Group accident coverage: Expense-based vs. scheduled benefit

For many employees, the cost of treatment after an accidental injury can make a bad situation worse. Group accident insurance is a relatively simple and affordable employee benefit that can help relieve some of the financial pressure from hospital stays, doctor visits, X-rays, physical therapy and more. Learn why groups should consider adding accident coverage to their employee benefits package and the advantages and drawbacks of two different policy types—expense-based and scheduled benefit.

Value-add programs can help employees save

Employees are used to health care benefits taking a bite out of their paychecks. But what about benefits that help manage or reduce expenses? That’s the idea behind many types of value-add programs that can be included with employee benefit plans. Here’s a review of some frequently used programs that can help employees make the most of their benefits coverage.

Maximizing the potential of Health Savings Accounts (HSAs)

Whatever direction health care reform takes in the future, health savings accounts—or HSAs—appear positioned to take a larger role. Like a 401(k) for medical expenses, these tax-advantaged savings accounts are designed to help employees accumulate money to spend on qualified medical costs. Here are some of the tax advantages and other benefits HSAs can offer.

Financial wellness at work with voluntary benefits

In today’s high-deductible marketplace, employees are expected to pay a growing share of their health care's plan out-of-pocket expenses. That’s why it’s important for employers to balance a cost-effective benefits plan with coverage that meets the needs of employees and their families. Voluntary benefits such as disability, accident and critical illness coverage can help employers ensure their workforce stays financially well while managing the bottom line.

Limited-benefit medical plans: fixed-payment vs. expense-based

Employees on high-deductible medical plans often shoulder significant out-of-pocket costs until their deductible is met. To alleviate the financial burden between when coverage begins and the deductible is met, several carriers offer limited-benefit “gap insurance” plans that provide a financial benefit when a covered medical event occurs. Expense-based products and fixed-payment indemnity products are both designed to supplement an employee’s existing medical coverage, but they differ in their approach.

Critical illness insurance

Medical emergencies can happen to anyone at any time. While medical and disability insurance help defray the cost of care and potential loss of income, additional out-of-pocket costs can add financial pressure to an already difficult situation. Critical illness insurance is designed to help with unplanned expenses that can add up quickly when a medical crisis hits.

Closing the coverage gap

High-deductible health plans (HDHPs) typically have lower monthly insurance premiums than low-deductible plans, and they encourage employees to be better health care consumers. But for some employees, meeting high deductibles can be a challenge. One solution is to help close the “gap” by pairing the HDHP with fixed-payment medical coverage.

Minimizing your self-funded plan’s health care risk

Stop loss is an essential purchase for employers who self-fund their employees’ medical benefit plans. If you're considering new coverage or a change at renewal, here are some questions you should consider during your evaluation process.

Advance funding for stop loss claims

Employers who self-fund their employees’ medical coverage typically rely on stop loss to help them cover large and unexpected claims. But stop loss is a reimbursement, and the employers must make the initial claims payments themselves. Fortunately, many stop loss carriers include advance funding provisions in their contracts that can accelerate the reimbursement of qualifying catastrophic claims.

Stop loss: What matters to carriers and employers

Stop loss helps protect employers who self-fund their medical plans from the financial risk of catastrophic claims. To secure the best stop loss coverage for company’s needs, it may be instructional to understand not only what employers should look for in a stop loss carrier, but also what carriers look for when pricing and evaluating the risk they are assuming.

Managed care networks and stop loss pricing

Managed care networks are preferred by self-funded plan sponsors (employers) because negotiated prices with facilities, physicians and other providers can help reduce overall costs. This is also true for stop loss carriers who insure self-funded plans. Premium discounts are usually offered when groups use managed care networks. Here’s what stop loss carriers look for in networks to provide the best pricing for their coverage.

High-cost pharmaceuticals and self-funded medical plans

The rapid expansion of biologics, compound drugs and specialty pharmaceuticals designed to treat a wide range of health conditions is exciting, but the corresponding and exponential rise in pharmaceutical costs can quickly overwhelm employer budgets. Get to know the benefits and costs of these innovative pharmaceuticals and how they can affect self-funded medical plans.

Resources to keep medical claims in check

As the price for medical care continues to rise, more employers are self-funding their employee health care coverage and using stop loss to protect their benefit plans against large or catastrophic claims. Learn how stop loss carriers and other partners can help mitigate excessive claim charges before they hit the books.