4 Reasons to Sell IDI – Individual Disability Insurance
Previously, we discussed ways that Individual Disability Insurance (IDI) can protect the financial assets of the high earners in any organization. But DI plays an important role in balanced health care coverage.
Post-pandemic, employers are still working to recruit and retain top employees and to prevent falling victim to trends like “quiet quitting,” where an employee shows up for work but isn’t fully invested in the company or results. And, of course, now more than ever with inflation at the foreground, employers are looking to control costs while delivering more valuable benefits to employees.
Individual Disability Insurance represents an affordable, practical solution to these challenges and more. But it’s important for insurance brokers to know how to position this benefit and overcome objections to increase sales.
Understanding these four advantages of IDI can help.
IDI Can Supplement LTD for a Company’s High Earners – Including Owners
We covered the advantages of IDI for a company with many high earners in this post. Emphasize the fact that group coverage is a great foundation. But many executive employees may need additional insurance based on the maximum monthly benefit cap for LTD.
Understand that Individual Disability Insurance Can Stabilize the Cost of LTD Over Time
The DBL Center can work with you to redesign your clients’ LTD benefits package. By reducing the LTD maximum benefits and then offering IDI for individuals earning more than $200,000, the new program reduced LTD costs for the firm. The premium cost for the combination plan was slightly higher than the original program but will stabilize the costs of LTD over time. As older, higher paid employees retire and younger executive officers join the team, IDI premiums will go down while the LTD benefits will remain the same.
IDI Can Be Written as an Employee-Paid Benefit
Insurance brokers often hear that clients don’t want to increase their benefit costs right now at a time when the cost of everything else in the supply chain, including energy, maintaining and operating fleet vehicles, and even the price of equipment and consumables is going up.
Group LTD and individual DI coverage are both available on an employee-paid, voluntary basis. By offering IDI as an option, you are passing costs onto higher paid employees who can afford to make the decision to secure their financial future – and probably have the insight to do so.
You can also offer these benefits on a shared-cost basis. By bundling the two products and offering multi-life DI, you may still qualify for discounts through The DBL Center’s top-rated carriers.
IDI Is Part of a Balanced Healthcare Plan
Recruiting and retention is one of the top challenges for employers in virtually every industry today. Robust employee benefits packages have been shown to reduce turnover rates, which saves money for employers in the long run.
If an employee becomes ill or injured, health insurance covers hospital stays, doctors’ bills, and typically medication and treatments. But that’s not the whole picture. Individual Disability Insurance, along with other voluntary worksite benefits, can help an employee make ends meet and reduce financial stress. Alleviating financial worries can often lead to faster recovery. The right benefits package can also reduce turnover and foster a sense of employee loyalty, something that is shown to be lacking in today’s workplaces.
The right employee benefits packages are more important than ever when so many workers are voicing dis-satisfaction, contemplating job hopping, and demanding more from employers.
You may even be facing the same challenges in your insurance agency. Showing empathy toward your clients while sharing affordable solutions will help you meet the needs of today’s workforce and build lifelong customers.
Let The DBL Center help you with our white glove, white label service, bundled rates, and relationships with top carriers. Start here with a free quote.
DBL Center Discusses PTO and PFML with Arch Insurance’s Sonja Spruiel
How does PTO work in states with disability and family leave benefits?
As a growing number of states roll out statutory Paid Family and Medical Leave programs and short-term disability insurance benefits, employers, HR managers, benefits advisors, and insurance brokers, alike, are trying to understand how PTO and PFML interact in terms of claims.
In some states, employers can require workers to use their PTO first, but some states do not allow that. Understanding all the rules can be complicated, especially for insurance brokers selling these new PFML benefits across multiple states.
Fortunately, said Sonja Spruiel, who serves as the Regional Business Development Manager, Accident and Health, for Arch Insurance, “The broker doesn’t have to be the expert.”
She added, “I position myself as the expert because I read into the laws and create spreadsheets for my company. If brokers bring an expert to the table who is knowledgeable about the products and can really be consultative to the client, it can help them navigate the transition into these mandated paid leave programs.”
That’s just one of the ways insurance brokers can benefit from using an insurance wholesaler with close relationships with top carriers. Spruiel sat down with The DBL Center marketing team to unravel the different paid family and medical leave benefits in different states and how they affect PTO for employees in those states.
Understanding PTO and PFML / State Disability Laws
“Some states allow employers to require the employee to use PTO first, and some states do not allow it,” Spruiel said as the starting point to a deeper, state-by-state dive.
In places like New Jersey, it’s desirable to use PTO to fill in gaps, she explained.
The state has a one-week waiting period for disability benefits paid through the New Jersey State Insurance Fund, so employees may be able fill in their missing income with PTO. “A lot of employees elect to receive PTO so they can receive pay for those seven days,” Spruiel said.
Additionally, New Jersey employees may use PTO in increments to make their weekly earnings whole. “In New Jersey, if an employee is earning 85% of their wages up to a cap, they can use PTO to get paid up to 100% of their pre-disability earnings,” Spruiel said.
Connecticut employers are allowed to require their employees to use PTO – or allow them to opt to use PTO concurrently with Connecticut Paid Leave – as long as the total compensation doesn’t exceed the employee’s full regular pay. The Connecticut law also permits employers to mandate that workers use their accrued vacation time, but must allow the worker to retain at least two weeks of PTO or vacation time, according to CTPaidLeave.org.
In Massachusetts, an employee can opt to use PTO to receive income during the seven-day waiting period for PFML, but they aren’t required to. They can also opt to use PTO instead of PFML at any time during leave if the benefit is higher.
However, employees in Massachusetts, cannot use PTO concurrently with PFML on the same day to make their salary whole. They can, however, collect PTO and PFML benefits within the same week, but not on the same day, according to Mass.gov.
As you can see, rules vary across states and, in some states, employees may not have a need to use their PTO.
“States like Oregon and Colorado, which do not have a waiting period and benefits start on day one, cannot require an employee to use PTO. If an employee elected to take PTO, it would be an offset to the benefit,” Sprueil said.
The Future of Paid Family Medical Leave
As we spoke, the topic came up regarding a federal paid family and medical leave program and how this may (or may not) affect the disparate state programs. The federal Family and Medical Leave Act provides employees in companies larger than 50 lives with unpaid, job-protected leave. But, so far, there has been no federal paid leave program.
If legislation passes, Spruiel said it would be a “minimal benefit,” and that states would still have the option to meet – or exceed – the requirements through their own programs. “States with programs in place would not be subject to the federal plan.”
This would leave the future of privatized FMLA and PFL benefits secure as a revenue stream for insurance brokers and as a recruiting and retention tool for employers, as well as for states that are competing for tax revenue from homeowners and employees.
FMLA Benefits as a Recruiting and Retention Tool
With skilled office workers able to work from virtually anywhere, many states are trying to prevent “brain drain,” or the phenomenon of skilled workers relocating from more expensive regions. Robust, state-mandated benefits can help attract higher income workers and, therefore, tax revenue, to specific states with competitive FMLA laws in place.
“Many of the bigger states already have plans,” Spruiel said. “A smaller state may not see a desire for the expense of administration of a program, so they may let the federal program reside in their state. But there are a lot of other states to compete with in this world of remote working, so there’s a big edge for states who choose to be competitive on this.”
We can expect to see more state plans introduced, even if federal paid leave legislation manages to pass through Congress within the next few years.
With that in mind, Spruiel emphasized that it is usually a worker’s “payroll state,” or the state where they complete the majority of their work and pay taxes, that determines their statutory benefit eligibility and the state where they would file a paid leave claim. “Remote work is changing the landscape of everything,” Spruiel said.
It’s more important than ever for statutory insurance brokers to position themselves as a resource to employers and benefits supervisors. In many cases, that means fostering relationships with carriers through The DBL Center. As a concierge for brokers, we can act as your back-office staff and help guide your clients through this ever-evolving landscape of employee benefits.
How IDI Insurance Can Cover Your Clients' Top Executives
Are you using IDI coverage to fill gaps in your clients’ executive benefits packages?
When HR and benefits departments create group benefits plans, they often focus on the majority of employees – hourly wage workers, middle management, and those earning less than $10,000 a month gross income.
But we know that the c-suite, including the business owner, plays a key role in daily operations and the success of the business. Retention of high-level employees is crucial to a company’s growth and longevity.
In many ways, the c-suite is no different than other employees: They want a robust worksite benefits package and they want to know that their income is protected in the event of disability.
Most plans include provisions for group long-term disability (LTD) as a foundation for income protection. In states like New York and New Jersey, which have statutory short-term disability, LTD picks up where STD or DBL leaves off.
Yet many group plans do not offer the type of coverage high-earners need to maintain their lifestyle and pay their bills if they become sick, injured or disabled and unable to work in their current occupation. Because of caps on benefits, LTD insurance often replaces just 40% of their salary for a six-figure earner.
That’s where Individual Disability Income (IDI) insurance comes in. Through our network of carriers, The DBL Center is able to offer standard issue IDI insurance beginning at 5 lives.
What You Need to Know About IDI Insurance
As an insurance broker, if your client has at least 5 employees earning at least $100,000 annually, you can help them find the right policy. These plans provide up to 75% income replacement and can include base pay and bonuses.
The plan has a broad definition of disability, as it covers individuals if they can’t work in their own occupation. The DBL Center can write policies with a multi-life discount of 20% to 30% and unisex rates. This is an employer-sponsored benefit and, depending on the policy, your clients may be able to use IDI premiums as a line of credit toward their other group policies.
You should also be aware that coverage is:
- Non-cancellable / guaranteed renewable up to age 65
- Portable should the employee leave the firm
- Offered on a Standard Issue – GSI Basis at 5 lives
Who Can Benefit from IDI Insurance?
Recruiting and retaining employees in highly technical fields, including technology and banking and investments, has become more difficult following the pandemic. People want opportunities to work remotely. Many executives, engineers, and other high-performing individuals have moved away from tech hubs to work in areas with warmer climates during the pandemic.
Offering robust worksite benefits packages remains one of the best ways to recruit and retain top workers. If you have clients in banking, technology, consulting, accounting, engineering, or the legal field, who employ at least five highly compensated individuals, they can benefit from this coverage.
IDI fills the gap where LTD leaves off. Highly compensated individuals can leave their investments where they are, which is crucial in a bear market, and meet their living expenses and pay additional medical expenses that may arise from their disability, with IDI coverage.
Highly successful people and top earners have a way of making ends meet and providing for their family in any circumstances. But borrowing against a retirement account or selling investments is not the best financial choice in a bear market. Nor is it a good idea to borrow money against real estate holdings or other investments when interest rates are rising.
Especially in today’s inflationary economy, it’s important for your clients to ensure that all employees have adequate disability coverage to reduce employee stress. When a disabled executive doesn’t have to worry about money or providing for their family, they can focus on healing and recovery. That can mean a faster return-to-work, which benefits the individual and the organization.
Take a look at your current book of business and pinpoint organizations with more than 5 high earners. Actively selling IDI can be a great way to boost your business in the fourth quarter while delivering the benefits your clients need.
Reach out to The DBL Center, your back-office staff for disability benefits and more.
New Jersey Brokers: Increase Commissions By Privatizing Statutory Family Leave Insurance
Insurance brokers serving New Jersey now have another opportunity to increase commissions with statutory benefits: Family Leave Insurance.
By law, New Jersey business owners are required to provide FLI coverage for employees to bond with a new child within the first 12 months, care for a family member with a serious health condition, or to seek legal counsel, medical care or other assistance following domestic or sexual violence.
The DBL Center is in a position through our carrier relationships to provide robust benefits – equal to or better than those provided by the state plan – with discounted premiums when clients bundle FLI benefits with TDB in New Jersey or with in-demand voluntary and worksite benefits.
If you are a broker in New Jersey looking to boost your business with existing clients and write new business by helping NJ companies gain compliance with state statutory insurance laws, tremendous opportunities lie ahead.
Five easy steps is all it takes.
Make a List of Current New Jersey TDB Clients
The easiest way to write new FLI policies is with your clients who already understand the benefits of privatizing TDB coverage in New Jersey. Although FLI has been a statutory benefit in New Jersey for more than a decade, only recently did major carriers begin offer private policies.
The Broker Dashboard: Net Revenue Tracker makes it easy to view all your in-force TDB clients with a click from anywhere you might be: a laptop or desktop computer or on your smartphone through our Android or iOS app.
Evaluate Their Coverage to Identify Gaps or Needs
Take a look at their coverage, if they write ancillary benefits or voluntary worksite benefits with your agency, as well. Look for gaps in their coverage based on their current census. Do they have a lot of high-earners that do not have the coverage they need should they become ill or injured? Is their business protected should the owner die or become disabled? Are they providing their employees with options for voluntary dental and vision benefits?
Of course, they are probably writing their FLI benefits through the state, and may not even be aware that they can privatize FLI for the same advantages they receive with a private TDB policy.
When you set up your meeting, you’ll want to be prepared to talk about family leave insurance and ancillary and voluntary worksite benefits to show your clients maximum savings.
Understand the Advantages of a Private FLI Plan
When your clients bundle TDB and FLI coverage together, they can coordinate benefits with a single intake, saving time. They will enjoy integrated claims management, reducing the burden on their HR team or employee benefits managers. Plus, employees and employers will gain access to a personalized claim service with their own case claim representative and experienced nurses as a first point-of-contact for claims.
Benefits are guaranteed to be as good or better than the state plan for both FLI and TDB, and clients can save money by bundling them together. Add long-term disability coverage, ancillary benefits like Group Life / AD&D, dental and vision, and voluntary worksite benefits for additional savings. Plus, clients gain the benefit of one point-of-contact for all their claims needs. When employers privatize FLI, they have the option of contributing to premium costs for their employees. Under the state plan, FLI premiums are entirely employee-funded.
Make a Call
Once you’re well-versed in the benefits of privatizing FLI in New Jersey and have a good concept of what ancillary and voluntary worksite benefits your clients may need, make that call. Set up that appointment.
You will have all the support you need with The DBL Center as your back-office staff. We can provide a free rate quote with just a census and salaries for any company.
Our team may even notice gaps in coverage that you didn’t identify and can share a quote that will ensure your clients have all the coverage they need, including statutory TDB and FLI.
Write Their Private TDB and Family Leave Insurance Policy In Time for January 2023
Beginning January 2023, new rates and premiums take effect for TDB and private FLI coverage. Write policies now to start the first quarter of 2023 to take advantage of the low rates and better service with private TDB and FLI.
Reach out to The DBL Center now for information or guidance to pursue this new opportunity for New Jersey insurance brokers.
Massachusetts PFML: Help Your Clients Privatize Now
Paid Family and Medical Leave went into full effect in January 2021 and benefits were fully rolled out by July 1, 2021. As of last summer, any eligible employees could file a claim to receive benefits. Maximum leave time varies depending on the reason for leave.
Qualified employees could receive:
- Up to 20 weeks off for a serious health condition
- Up to 12 weeks for birth, adoption or new foster event within the first year
- Up to 12 weeks to care for a family member with a serious medical condition
- Up to 12 weeks related to the deployment of a family member in the military
- Up to 26 weeks to care for a family member with a serious health condition who is in the military
Although it was optimal for employers to privatize Massachusetts PFML benefits within the first year in order to avoid pre-paying their first year of premiums to the State Fund, there’s still plenty of opportunities to make the switch for 2023.
As Fall approaches, it’s the perfect time for New England insurance brokers to approach current clients and new business, alike, to share the tremendous advantages of privatizing Massachusetts PFML.
Identify Your Warm Market for PFML
While you should always be prospecting for new business, it makes sense to reach out to your clients who already trust you and rely on you for other lines of coverage. You may be able to help them save money by bundling statutory PFML in Massachusetts with voluntary worksite benefits and ancillary benefits.
First, identify your clients mandated to provide PFML coverage to their employees. This includes any organization with more than 25 covered workers. Covered workers include all W-2 employees, regardless of part-time or full-time job status and any 1099 contractors in an organization with a workforce made up of more than 50% independent contractors.
Businesses with less than 25 lives can also offer PFML to employees on a voluntary, employee-funded basis.
Share the Advantages of Private PFML
Once you’ve identified clients who already write their health insurance, life insurance and other ancillary benefits, or voluntary worksite benefits such as accident insurance, through your agency, remind them that it’s almost time to renew their statutory PFML coverage for 2023.
If they have a policy with the state, they may have experienced claims delays, slow customer service, or a lack of flexibility in how they receive payments. Or maybe they are just wondering if they can find a lower rate with a private policy.
Private PFML policies in Massachusetts must provide benefits equal to or better than the state plan, with the same or greater duration, at premiums equal to or lower than the state plan.
In our experience, private plans have delivered better customer service and more flexibility at rates equal to or less than the state plan. Plus, clients can save money by bundling other benefits with their PFML policy.
All you need to write their policy is a census of lives in the organization, male and female, plus their salaries. Private plans must be approved by the state, so it’s a good idea to start providing quotes now in time for the January 1, 2023 deadline.
Demonstrate Your Expertise
By relying on The DBL Center as your back-office staff, you can share your knowledge as an expert in Paid Leave. Since New York introduced the groundbreaking PFL Act in 2017, The DBL Center has led the way in statutory paid family and medical leave.
Our partnerships with carriers that write paid family and medical leave in a growing number of states help us provide the lowest premiums and greatest options in statutory, ancillary, and voluntary benefits.
Your access to our Broker Dashboard: Net Revenue Tracker makes it easy for you to let your customers know when their renewal is due, helping you to better manage cash flow and track commissions along with renewals and cancellations.
Reach Out to New Clients
New businesses open every day in Massachusetts, and many don’t understand the complicated process of statutory employee benefits. Use multiple marketing tactics, including direct email, social media advertising, paid search, and local networking to find new businesses and start the important conversation about statutory benefits with them.
The same goes for attracting businesses who have been around a while but may not realize how much your insurance agency can offer them. Today’s company owners and benefits managers are more demanding than ever before when it comes to receiving the best customer service. They want an insurance broker who has their best interests at heart and can help identify gaps in coverage that could be hurting their business – and their bottom line.
The DBL Center has the tools, resources, knowledge, and industry connections that can help you set your insurance brokerage apart.
New England brokers have the unique opportunity to discover what New York tri-state area brokers have known for years; statutory benefits are a great way to expand your book of business, build relationships, and open the door to commission-boosting ancillary benefits.
At The DBL Center, we are always here to help you build your reputation as a statutory benefits expert.
The DBL Center Expands Staff with New Group Benefits Consultant William Quinn
As the need for disability coverage, paid family and medical leave, and group benefits grows across the U.S., The DBL Center continues to expand its team to better serve insurance brokers.
The DBL Center welcomes William Quinn, Senior Relationship Consultant for Group Benefits, to its growing family. In this new role, Quinn will work with brokers to help their clients identify risk gaps and provide long-term sustainable insurance solutions to close those gaps. “I believe in helping clients seek synergistic, long-term solutions for gaps in employee benefits,” he said.
Quinn comes to DBL Center from Principal Financial Group, where he was a senior account executive specializing in group benefits. Before that, he briefly filled the role of Director, Account Management for Liazon, a leading private benefits exchange. He started his insurance industry career with Rose & Kiernan, Inc., where he spent more than a decade, earning the title of Assistant Vice President.
It was at Principal Financial Group that Quinn first met DBL Center founder David Cohen, whose spirit and legacy lives on in his son, DBL Center President and CEO Michael Cohen. From those early meetings, Quinn was impressed by how friendly, welcoming, and receptive The DBL Center team was in supporting group benefits to complement their statutory lines of DBL in New York, TDB in New Jersey, and TDI in Hawaii.
In his position at The DBL Center, Quinn will assist our internal salespeople’s broker relationships by adding group ancillary benefits in order to leverage their renewals and assist with enrollments. These products include dental, vision, Group Life / AD&D, long-term disability, absence management and voluntary worksite benefits.
Michael Cohen commented, “Bill Quinn’s extensive experience working with a top carrier, coupled with his professionalism and the respect he has earned from brokers over the years, makes him the perfect addition to our team. He will be working as the bridge between statutory / paid leave insurance and our ancillary benefits department to help cross-sell lines of coverage, fill gaps, and support our brokers in a rapidly changing world of employee benefits.”
Eager to join the company beginning August 1, 2022, Quinn said, “The DBL Center has always been a great partner for their carriers in helping promote the group insurance model for brokers and their clients. It’s a great team with an excellent work ethic and a solid approach to doing business.”
Can a Business Use Disability and Life Insurance to Fund a Buy / Sell Agreement?
The DBL Center is your trusted resource for statutory disability benefits, like TDB in New Jersey and DBL in New York, that your clients need. But insurance brokers should also consider sharing the advantages of other types of coverage.
Key person insurance and business life insurance are critical products that many business owners overlook. Likewise, long-term disability insurance for executives and company owners can help the owner and their family financially survive a tragic event. These insurance benefits can also be used to fund a buy-sell agreement if ownership needs to be transferred to one or more of the partners.
What Is Key Person Insurance or Business Life Insurance?
Key person insurance is one of the many ancillary benefits DBL Center brokers can access to provide a full suite of coverage to their clients. Key person insurance, sometimes called business life insurance, protects the company’s financial well-being if a leader, whether that is a company founder, partner, or a top-level executive, dies or can no longer perform their job duties.
But if a business has multiple owners, the situation can become a bit more complicated.
What Is a Buy-Sell Agreement?
Often, business partnerships have an agreement in place to facilitate the sale of the company to one of the owners if something should happen to the other owner. In a buy-sell agreement, the owners will have the right (and, in some cases, will have an obligation) to purchase another owner’s shares if an owner dies or becomes disabled.
A buy-sell agreement can provide necessary income to the deceased or disabled owner’s estate. It also helps ensure the owner’s estate is compensated for the work, time, knowledge, and capital the owner invested in the business.
But what if the other partners don’t have the capital to purchase the owner’s share in the company?
That’s where key person insurance, business life insurance, or even long-term disability insurance for executives can come into play.
Any of these products can be used to fund a buy-sell agreement and transfer ownership of the company to the surviving, working partners.
Using Business Life Insurance or Long-term Disability to Fund a Buy-Sell Agreement
When the company uses business life insurance, the policy will be used to fund the purchase of the owner’s shares, paying out to the owner’s estate while giving surviving partners full ownership of the company.
A long-term disability policy can be used in the same way if the owner is still alive, but disabled and unable to perform their job duties any longer.
Using Life Insurance in a Cross-purchase Agreement
Alternatively, a cross-purchase agreement names each of the owners as beneficiaries on each other’s policies. This can get more complicated, according to an article that originally appeared in the Thomson Reuters’ Estate Planning Journal.
Rather than having a single policy covering the business, there must be life insurance policies for each of the owners, with the other owners named as beneficiaries. If there are three owners, you would write six life insurance policies, so that each party is a beneficiary for the others.
Help Your Clients Plan for an Uncertain Future with the Right Insurance
Having the right insurance protects not just individual employees and business owners, but the company as a whole.
By looking beyond statutory benefits like DBL and TDB, you can position your insurance brokerage as a trusted resource and consultant to your clients. Selling benefits like key person insurance, long-term disability, and executive life insurance not only helps boost your commissions, but helps give your clients peace-of-mind that their company is protected against any contingency.
Questions to Ask to Find Holes in Your Clients’ Insurance Coverage
As the statutory insurance industry prepares for July 1 renewals, it’s a good time for insurance brokers to help them identify gaps in coverage that may be filled by ancillary benefits.
The introduction of paid family and medical leave programs in a growing number of states opens new markets to statutory brokers. DBL Center brokers who specialize in short-term disability in New York and New Jersey understand what it’s like to roll out a new benefit program based on experience with New York PFL.
As such, you are uniquely qualified to help your clients with these new benefits in Massachusetts, Connecticut, and beyond. Plus, you have the advantage of the DBL Center’s proprietary Broker Dashboard: Net Revenue Tracker to keep your clients aware of renewals and pending cancellations.
Guiding Your Clients to Enhanced Benefits Packages
As you’re reviewing benefits for third quarter DBL and TDB renewals in July, take some time to ask your clients about their other employee benefits to identify holes in their coverage or areas – especially in regard to executive benefits packages, ancillary benefits, and long-term disability insurance (DI).
You can list some of the most common ancillary benefits and ask your clients if they offer these options to their employees. But it’s better to start a dialogue that discusses their needs.
Questions to Ask
You might start by asking about the demographics of their employees.
- Do they have mostly older workers who may be thinking about long-term care coverage?
- Do they have millennial and GenX employees who are anticipating braces for growing children on the horizon and need a good dental and vision package?
- Do they have Group Life / AD&D coverage that can help attract employees with families?
Then, move on to the specifics of today’s economy:
- Do their current short-term and long-term disability insurance packages meet their employees’ needs in these times of high inflation?
- Could stand-alone PFL benefits help New York employers save money on this statutory benefit?
- In light of PFL and FMLA laws, does the company offer enough in the way of benefits for employees who would never take advantage of these benefits?
- Can accident insurance and enriched DBL help provide more to employees who don’t have any need for family-related benefits?
Finally, look to the upper level of employees and the business, itself:
- What about the executives: Are top employees covered well enough in the event of illness or injury?
- Can the business survive the loss of key employees, either temporarily or permanently?
Once you’ve determined the make-up of the workforce and the business owner’s biggest concerns regarding the future of their business, you can make the best recommendations.
When Cost Is a Factor: How Much Insurance Coverage Can Your Clients Afford?
Of course, budgets are always a consideration when you’re optimizing employee benefits packages. It helps to remind clients that many benefits can be offered as completely voluntary and employee funded, funded by the employer, or on a cost-shared basis.
Having these options allows business owners to deliver competitive benefits without a dent in their bottom line. Even executive packages for life insurance and long-term disability can be written as buy-up coverage, fully funded by the executive with no cost to the company.
Using Paid Family and Medical Benefits as a Doorway to High-Commission Ancillary Benefits
Every quarter also brings new opportunities to write new business and expand your reach as an insurance broker. There is no easier way to get your foot in the door than with statutory benefits that every business owner needs to provide, by law.
DBL in New York and TDB in New Jersey have been on the books for decades. There are always new businesses entering the market in need of coverage. Plus, opportunities to privatize these benefits along with Family Leave Insurance in New Jersey and Paid Family Leave in New York opens doors for brokers.
It all starts with education about the products and presenting your insurance brokerage as an authoritative resource for statutory benefits. That’s where the DBL Center comes in as your back-office staff with the knowledge and experience to write Paid Family Leave in NY and other states now offering family and medical leave benefits.
From there, you can continue to ask the right questions to help benefits supervisors, HR directors and company owners develop the best benefits package to achieve their business goals. Disability insurance is just the beginning. Today’s workforce needs so much more in the way of insurance coverage.
When you pinpoint the holes in your clients’ coverage packages and show them ways they can affordably recruit and retain talent through the benefits today’s businesses and employees need most, they will rely on you as a trusted resource. The time to start is today.
Maryland PFML - Maryland Introduces Paid Family and Medical Leave Beginning January 2025
Insurance brokers and employers should begin preparing now for Maryland PFML.
Add Maryland to the growing list of states offering paid family and medical leave to many workers. As the federal government continues to discuss a U.S.-wide mandated paid family leave program, more state legislatures are introducing their own programs.
On April 9, 2022, the Maryland General Assembly voted to override Governor Larry Hogan’s veto of a broad-reaching PFML bill. The reasons an employee can take leave mirror New York’s legislation, which represented some of the broadest and best coverage in the country when it was introduced in 2017. Massachusetts and Connecticut then followed in New York’s footsteps.
The New York PFL plan was introduced in stages of increased benefits until 2021 saw the benefits fully phased in up to the maximum amount of $1068.36 per week for up to 12 weeks.
Maryland’s PFML benefits will become available January 1, 2025, but the state will begin collecting premiums on October 1, 2023. Benefits will begin at a $50 per week minimum, with a maximum of $1,000 weekly for up to 12 weeks in the first year. From there, maximum benefits will rise based on the state’s average weekly wage, with benefit caps announced for each year on September 1 of the prior year.
Who Qualifies for Benefits Under Maryland’s Paid Family and Medical Leave Act
Maryland patterned its eligibility requirements after states like New York, Connecticut, and Massachusetts. It is likely that a federal PFML program will also follow these requirements. Under the Maryland PFML law, employees can take leave to:
- Bond within a year of the birth, adoption, foster care, or kinship care of a child
- Care for a family member with a serious health condition
- Recover or treat their own serious medical condition that prevents them from working in their current position
- Care for a service member
- Run a household when a service member in the family is deployed
Family members include children, parents, in-laws, spouses, siblings, grandchildren and grandparents. Maryland excludes domestic partners from coverage.
Every business, individual or government entity that employs at least one individual in Maryland must provide PFML benefits to all employees who have worked at least 680 hours in the 12-month period preceding their leave. That means part-time employees who clock at least 17 hours per week are eligible for leave.
Self-employed Maryland residents can elect to participate in PFML but must opt in for an initial minimum time of three years and can then choose to renew annually.
What Employers Need to Know About Maryland PFML
While all the details haven’t yet been outlined regarding employee and employer contributions, according to a report issued by insurance carrier SunLife, employers with more than 15 employees will be required to contribute to premiums.
Covered employees will be responsible for 75% of the premiums, although employers can elect to cover a portion of the employee’s premiums as an added benefit. In smaller organizations, employees will be responsible for 100% of the premium costs, as are self-employed program participants.
Employers will need to begin submitting premium payments, deducted from payroll, beginning in October 2023.
What Brokers Need to Know About Maryland PFML
Employers have the option of establishing a private plan, either through a qualified carrier or on a self-insured basis. Private plans must provide the same or better benefits, rights, and protections with comparable or lower premiums and must be filed with and approved by the Maryland Department of Labor.
As PFML programs expand across the country, insurance brokers have more opportunities than ever before to build relationships and increase revenue with this statutory benefit. While PFML programs have not been the most profitable by themselves, statutory benefits represent a foot in the door to share knowledge and build trust.
Insurance brokers licensed in Maryland can help guide business owners through the process of establishing a PFML plan. Then, they can save those clients money by bundling ancillary benefits written through top insurance carriers.
The DBL Center has 45+ years of experience in the statutory market and has been on the cutting edge of New York PFL and other PFML programs from coast-to-coast since their inception. As your back office team, we can guide you to the best benefits packages for your clients, while the Broker Dashboard: Net Revenue Tracker app helps you stay on top of renewals, cancellations and commissions with just a few clicks.
Are you ready for Maryland PFML? We can help.
Colorado FAMLI Provides Paid Family and Medical Leave Benefits to Employees
Beginning January 1, 2024, Colorado workers gain access to paid family leave to take care of their own medical conditions or a loved one.
As major tech companies, including Twitter, Airbnb, DoorDash, and Reddit, advocate for federal paid family leave programs, more states are enacting legislation of their own.
Colorado recently joined New York, New Jersey, Massachusetts, Connecticut, and California with a paid family and medical leave program. Called Colorado FAMLI (Family and Medical Leave Insurance), the program will provide benefits to employees to take time off to care for themselves or a loved one who meets certain criteria.
In line with programs in other states, Colorado workers can file for FAMLI to:
- Care for a new child within the first year of birth, fostering, or adoption,
- Care for a family member with a serious health condition
- Heal from or take care of a serious health condition of their own
- Make arrangements for a family member’s military deployment
- Address immediate safety needs and life changes following domestic violence or sexual assault.
Eligible employees can claim up to 12 weeks of leave per year, according to the website famli.colorado.gov. Parents who experience pregnancy or childbirth complications may qualify for an additional four weeks of recovery time.
Colorado FAMLI Benefits and Premiums
The state of Colorado Department of Labor and Employment provides a benefits and premium calculator for employers and employees here.
Benefits range from 37% to 90% of an employee’s weekly wage, depending on the employee’s income. Benefits max out at $1,100 weekly or $13,200 annually for employees in the top tier, who normally gross $2,000 or more per week.
What Colorado Business Owners Need to Know About the FAMLI Program
According to a Fact Sheet issued by the CDLE, every employer must offer the benefit to their workers. Organizations with their own paid leave program in place can apply for an exemption.
Premiums equal 0.9% of an employee’s wage. Employers with 10 or more employees must pay at least half the premium due, or 0.45%, with the other half coming from employee payroll deductions. Employers will also have the option of paying the full amount of the benefit as an added perk and employee retention tool.
Employers with fewer than 10 employees do not have to contribute to the program but are responsible for remitting the employee’s share (0.45%) quarterly with money collected through payroll deductions.
The legislation goes into full effect on January 1, 2024, when employees can make claims and begin collecting benefits. Employers will need to begin submitted premiums to the Colorado Department of Labor and Employment by January 1, 2023.
Insurance Brokers Who Sell These Benefits in Other States Should Get Ready
Specific details regarding carriers and self-insured options are not yet available.
Insurance brokers who already provide private DBL, TDB, or FMLA coverage in other states may want to start thinking about covering Colorado businesses and their employees, as well. Colorado business owners will be looking for brokers with knowledge, expertise, and a network of carriers who understand these complex benefits.
The CDLE recommends that Colorado business owners begin communicating with employees in Fall 2022 to prepare them for the payroll deductions and upcoming benefits. Internal communications such as employee handbooks should be updated with relevant information as it becomes available. By Fall 2023, the CDLE says Colorado business owners should have “clear guidance and communications to employees around FAMLI benefits.”
Insurance brokers who have helped employers implement successful PFL and FMLA programs in other states by providing them with affordable benefits and packages that bundle ancillary benefits with paid family leave have unique opportunities in Colorado. To set the stage for success, you can:
- Begin collecting testimonials from clients in other states with similar programs,
- Begin building relationships with Colorado business owners,
- Prepare social media campaigns and other marketing efforts and paid ad campaigns directed to Colorado business owners.
Finally, stay tuned to The DBL Center news section to read about breaking developments in Colorado FAMLI.