Michael Cohen Talks Past, Present, Future on Principal Insurance Podcast
DBL Center president and CEO Michael Cohen was recently invited to speak on the Principal Insurance You Belong in Business podcast, discussing “how business valuation and succession planning go hand in hand” with host Kyle Munson and Principal advanced solution director Lance Hennesay.
Appropriately, Munson started off the podcast with a “dad joke” style pun (we will spare you the details – you’ll have to listen to the podcast), which led Michael to lead off with an anecdote about his father, DBL Center founder David Cohen. Michael and David met famous comedian Don Rickles at the legendary New York Friar’s Club when Michael was a member.
Mike shares:
My dad tells Don Rickles, “I loved watching you growing up…” and Don looks right at my father and asks, “What do you do for a living?”
My dad says, “I sell insurance.”
And Don Rickles says to my dad, “Show business is my life. When I was a kid I sold insurance, but nobody laughed.”
Leaving Entertainment for Insurance
Unlike Rickles, Michael Cohen left his own stand-up comedy career behind – except for the occasional December appearances on-stage during DBL Center holiday parties – to follow in his father’s footsteps as DBL Center CEO.
Since 2017, Cohen has made great strides to:
- Modernize DBL Center’s operations and streamline renewals with The Broker Dashboard
- Build business value and ramp up marketing efforts through a top-ranking website, featuring resource centers, news pages, and informative blog posts
- Expand offerings across multiple states with the growth of Paid Family and Medical Leave in New York, Massachusetts, and Connecticut
However, Cohen wasn’t always so dedicated to the statutory insurance business. “I used to tell my father, ‘The more you ask, the less I want to do it.’ I told him, if you’re such a good salesperson, why don’t you give me a pitch on why I should get into it?”
Cohen continues: “I was graduating high school, prior to entering Boston University, where I wanted to pursue film and television. In the beginning I didn’t know specifically what I wanted to be, but I was very struck by [the film] Jerry Maguire and I thought maybe I’d be an agent.
My dad kept asking me, ‘If God Forbid something happens to me, your mother wants nothing to do with the business. So why don’t we keep the money in the family?’
From a financial planning perspective, he wanted me to be involved.”
Cohen says, “After doing a stint in the entertainment business for six or seven years, I found a way to parlay my passion into helping him make money in his business. Now I’ve been doing this 17 years come July 1, 2021.”
Michael Cohen Discusses Business Sales in Today’s Environment
The podcast continued with Cohen and Hennesay sharing ideas on selling a business in today’s market, where 2020 will always stand as an exception to all rules or trends on profitability and valuations.
Hennesay noted that many valuation specialists will downplay the significance of 2020 numbers in a weighted average scenario, but that business owners looking to sell at their peak may choose to wait until 2020 moves further into the rearview mirror.
Munson pointed out that only 31% of business owners said they feel confident selling their business right now, while 72% are confident about their ability to adjust to shifting demands, even in the last year.
Cohen falls into this second category, pointing out one of his father’s favorite adages: “Stick to sewing” or “stay in your lane.”
“I never knew what that meant, growing up, but it’s just a simple way of saying don’t be a jack-of-all-trades,” Cohen said. “I sell plenty of lines of disability here – in a good economy you’ve got New Jersey TDI / NJ TDB, New York DBL, Hawaii TDI, enriched DBL in NY, FMLA, STD, ancillary benefits… that’s plenty on my plate. I don’t need to take on major medical. I’ve got enough going on for people to take me seriously as a consultant in the niche that I’m in.”
Modernizing and Growing the Business
Since founder David Cohen’s passing, technology has become a driving force behind The DBL Center’s success. With the 2017 launch of The Broker Dashboard: Net Revenue Tracker, The DBL Center disrupted the niche insurance sector with cutting edge technology.
“I didn’t know, back then, that the Broker Dashboard would expand into apps in The App Store and the Google Play store, for both iOS and Android mobile devices,” Cohen said. “It’s a revenue tracking system, essentially, and that’s what most business owners care about – the bottom line.”
Full Circle
Today, Cohen keeps his eye on the bottom line and satisfies his urge to entertain through podcasts, including his Rep Roundtable discussions and “On the Mic with Mike” sessions where he interviews DBL Center employees and brokers.
To hear more, including more David Cohen wisdom shared by Michael Cohen, listen to the full Principal podcast here. You can also view more DBL Center interviews in our News section.
Paid Family Leave in Connecticut: DBL Center Opens New England Office
In the past several years, Paid Family Medical Leave legislation has been sweeping across the Northeast. The DBL Center has been at the forefront of guiding brokers to make the most of this new revenue stream, which can be bundled with ancillary benefits to provide business owners with cost savings while brokers enjoy increased commissions.
As we increase our services in Connecticut and Massachusetts, especially, we’ve been expanding our base into New England with a physical presence in Connecticut. This allows us to service our New England brokers better with a local presence.
Brokers in Connecticut and Massachusetts have turned to The DBL Center in the past year to navigate Paid Family and Medical Leave in Connecticut and Massachusetts. We’ve been helping brokers manage PFL in NY since 2017, so we’re familiar with the transition. Most importantly, we can help brokers use statutory coverage as a springboard to sell highly profitable group ancillary benefits, including dental, vision, and group life / AD&D.
Statutory Insurance Experts in New York, New Jersey, and New England
However, as Connecticut and Massachusetts solidify their Paid Family and Medical leave legislation, there are bound to be nuances in the laws that make them different from New York. Already, Connecticut has different paperwork to fill out to privatize PFML in CT. And the definition of a “family member” that someone can take leave to care for hasn’t been fully defined, but it may be less restrictive than New York’s laws.
Learn more about Connecticut Paid Family and Medical Leave here in our resource center.
Having local insurance experts in New England that can focus exclusively on our New England brokers will allow The DBL Center to provide the same level of expert, personalized service across Massachusetts and Connecticut as we have been doing for 45+ years in New York, New Jersey, and Hawaii.
DBL Center Hires New Group Sales Rep to Support Paid Family Leave in Connecticut and New England
As we focus on customer service and PFML in Connecticut and Massachusetts, we’ve brought on an industry expert with an office in Trumbull, Connecticut. Brian Dewey, the newest DBL Center Group Sales Representative, comes to us from major carriers Sun Life and Ameritas and has been a staple in Connecticut insurance for nearly a decade.
A Massachusetts native and Stonehill graduate with degrees in Economics and Finance, Dewey specializes in group ancillary benefits and will stay on top of the ever-evolving statutory benefits legislation in Connecticut, where he currently resides, and in his home state of Massachusetts.
The DBL Center: On the Cutting Edge of Statutory Benefits and Technology
With our extensive knowledge of Paid Family and Medical Leave coverage, The DBL Center is here to support New England brokers through the confusion of the first year of this new benefit and beyond. Brokers who take advantage of our white-glove, personalized service also gain access to our state-of-the-art Broker Dashboard: Net Revenue Tracker, helping you track renewals, cancellations, and commissions easily from any internet-enabled device.
Reach out to The DBL Center and Brian Dewey to learn more about how to help your customers save money by privatizing PFML in Connecticut today.
DBL Center Helps Brokers Privatize Connecticut Paid Family Medical Leave
As Connecticut employers prepare to make their first contributions to the Connecticut Paid Leave Authority for Paid Family Medical Leave in Connecticut, many business owners are wondering if it pays to privatize PFML through a top-rated insurance carrier. Since the program was first announced last year, Connecticut insurance brokers have been wondering the same thing. Is there profit in privatizing PFML in Connecticut?
Cathy Brown, Vice President of Employee Benefits at Brown & Brown of Connecticut, Inc., a publicly-held insurance carrier in Rocky Hill, CT, shares her thoughts on navigating the introduction of PFML, the challenges, pitfalls, and opportunities Connecticut brokers face.
“Since the end of last year, we’ve been exploring opportunities with different carriers to see if it pays to privatize this paid leave and write the policy through a trusted carrier rather than the Connecticut Paid Leave Authority,” she said.
Paid Family Medical Leave Premiums May Vary by Industry
In some cases, the choice looks like a no-brainer. The DBL Center has secured quotes for businesses in certain low-risk industries that save employees money on the 0.5% standard premium charged by the state. “We’ve had some quotes come in at 0.4%,” Brown says, “so automatically we are saving employees money by privatizing the plan.”
That 0.1% point can add up over time, especially for high-earners. But in other cases, the quotes may come in the same. Brown points out that premium prices often depend on the industry, as certain industries are deemed higher risk for employees to take paid family leave or paid medical leave for illnesses not covered by workers’ compensation.
For instance, healthcare workers may have a higher risk of catching a communicable disease in their workplace, but since it can’t be traced back to a specific workday incident, it would not qualify for workers’ compensation and the employee would file for short-term medical leave, instead.
Similarly, healthcare workers may be more likely to take paid leave to care for family members. “The definition of who constitutes a ‘family member’ here in Connecticut is very broad,” Brown says. “It hasn’t been fully defined by the department of labor. But if your line of work is in the healthcare field, you might be more likely to be the one to take a leave of absence to care for someone in your family, because you’re the one who knows how to do that.”
Industries dominated by women of child-bearing age may also have a higher incidence of paid family leave claims. A 2019 report from the University of Chicago found that 48% of new fathers and 55% of new mothers have taken time off to care for a newborn. When it comes to taking leave to care for a family member, the margin gets even slimmer: 28% of working men and 31% of working women took time off to care for a family member.
However, working with an experienced insurance wholesaler like The DBL Center can help brokers get the lowest rates for their clients regardless of the industry. “We’ve been able to work through Michael Cohen and his team at The DBL Center to find out which insurance companies are best for which industries. He’s been able to help us navigate through our choices to get the best plans for our clients,” Brown says.
She adds that The DBL Center has helped her write plans without requiring her clients to add additional lines of coverage, such as long-term disability or other ancillary benefits. Not every employer is ready, financially or from a staffing standpoint, to add other employee benefits as they are just beginning to adapt to the challenges and costs of paid family medical leave.
Additional Benefits to Privatizing PFML for Connecticut Business Owners
Even if the premiums for privatizing PFML end up equal in cost to the state plan, Connecticut business owners can reap other rewards by privatizing paid family medical leave in Connecticut.
“It’s about our clients’ comfort level when it comes to helping their employees file a claim,” Brown says. “You can go it alone and let your employees work directly with the state or you can privatize and work directly with a top carrier, while having your broker to help you.”
Brown points out that The DBL Center’s knowledge has been invaluable in guiding her clients. Cohen’s experience in helping brokers roll out Paid Family Leave in New York, where it is written as a rider to short-term disability policies, is helping The DBL Center stay ahead of the curve as Paid Family and Medical Leave legislation ripples across the northeast states. “We’ve been able to reach out to Michael and his team as a resource. He’s help us interpret some of the legislation for us and even gotten on the phone with our clients to explain it to them in better laymen’s terms than we can, because of our lack of boots on the ground to this point,” Brown says.
Find All The DBL Center’s News and Videos In One Spot
We’re all busy and it’s not always easy to stay up on the latest statutory and ancillary employee benefit insurance industry news – or to get the helpful tips you need to grow your book of business. The DBL Center understands, which is why we’ve launched our In The News section.
See Your Broker Dashboard: Net Revenue Tracker in Action
Watch an overview of how to use your Broker Dashboard: Net Revenue Tracker to easily track renewals, cancellations and commissions from any internet-enabled device. You can also schedule a demo of this cloud-based app using the easy-to-access chat feature directly on the page.
If you’re not already using the Broker Dashboard, you’re missing out on a key benefit of working with The DBL Center as your wholesale general agency. The Broker Dashboard provides up-to-the-minute information on all the accounts you write with us, so you can gain better control of your business and track your direct billed policies.
Read More: Six Steps Insurance Brokers Should Take Today to Start 2021 Right
Meet The DBL Center Team
Get to know the people behind our wholesale general agency better in our one-on-one video series. DBL Center President and CEO Michael Cohen puts his years of stage experience and his passion for film to work as he interviews The DBL Center team, revealing their motivations, goals, and a few fun facts.
Stay Up to Date on Industry Insights with Rep Roundtable
Our Rep Roundtable series achieved industry-wide recognition. These short-form video podcasts launched in 2019, bringing together reps from our top insurance carriers to discuss industry trends and offer tips for brokers.
If you want to learn more about Paid Family Leave’s expansion into New England and beyond, examine the implications of technology on the statutory insurance industry, or find out how top carriers got their start in the field, this is the place to look.
Read More: New York Paid Family Leave Resource Center
Take a look, too, as The DBL Center marketing team “turns the tables” on Michael Cohen to interview him in a virtual series produced during the pandemic. Cohen discusses how the industry changed dramatically in 2020 and what brokers can do to network successfully and grow their business through enriched DBL and ancillary benefits, including Group Life / AD&D, which has seen increased demand in the past year.
Find Out What’s New with The DBL Center and Statutory Benefits
Of course, scroll down to our Press Release section to see the latest breaking news, from the Broker Dashboard app release on the iPhone App Store to PFL expansion across New England and, soon, into the western states of Colorado and Oregon. We’ll release more information about these new Paid Family Leave programs as it becomes available, and you can find it here in our press release section first.
Since our website’s revamp four years ago, we have aimed to give you the information and resources you need to run your insurance business. Our In The News section brings together some of our most valuable media in one place, so you can browse easily during short spurts of down time. We hope you’ll discover information, inspiration, and maybe even a laugh or two.
Are You Making Money Off THIS In-Demand Employee Benefit?
As insurance brokers, it’s your job to deliver the benefits your customers and their employees need, including packages that will help employers recruit and retain top workers. With remote work on the rise, employers have an endless talent pool to draw from as geographic location now matters less than it used to. And employee benefits have become more important than ever when it comes to attracting and retaining top talent.
A survey from Prudential Insurance revealed that 52% of employees would leave their job for one with what they deemed the “right” benefits. And 77% said benefits represent a “key part” of a compensation package.
But what benefits do employees want most during a pandemic?
The Ancillary Benefits Employees Want Most
Health insurance remains important, of course, with 86% of employees calling it a “must have.” But dental, vision, and disability coverage now rank in top spots, as well. Respectively, 69%, 41%, and 41% of survey respondents said they require these ancillary benefits.
But there’s another benefit that’s also topping many lists: Group Life / AD&D coverage. “Here in The DBL Center office,” says The DBL Center President and CEO Michael Cohen, “we’re getting more calls than we ever have to bundle Group Life / AD&D with other lines of coverage. The pandemic has put everybody in touch with their own mortality and they want to make sure their loved ones are taken care of if something happens.”
Insurance companies across the country noticed a spike in life insurance policy sales in the beginning of the second quarter of 2020, that hasn’t waned as we entered 2021. Haven Life Insurance Agency, a company owned by carrier MassMutual, reported a 34% increase in term life policies sold in the second and third quarters of 2020 versus the same time frame in 2019. Northwestern Mutual reported a 15% increase in policies sold between April and September 2020 versus the same time period in 2019. LIMRA, a financial industry organization, saw a 2% increase in policies sold industrywide, according to CNBC.
Industry experts told CNBC that the last time they saw a spike like this was in the days and weeks following the September 11, 2001 terrorist attacks.
Why Group Life / AD&D Policies Represent Tremendous Value for Your Customers
Insurance industry reps told CNBC they saw the largest spike in term life insurance policies, especially for younger workers. But for many employees, group policies can provide affordable coverage without a medical exam.
Insurers cannot deny claims due to COVID, although premiums may rise in the future as an effect of low interest rates and high claims – much like they did in the P&C insurance industry after claims rose due to Hurricane Sandy.
Your smartest customers will want to offer their employees a voluntary or shared-cost Group Life / AD&D policy now, rather than waiting until rates rise. Only 60% of businesses currently offer Group Life / AD&D, so there is a tremendous market to tap.
Adding Group Life / AD&D to existing customers’ policies can help offset the losses insurance brokers experienced with so many small business owners closing permanently due to the pandemic. Employers can opt to share premiums costs with employees or choose a 100% employee-funded voluntary group plan.
Tiered Plans that Provide the Best Coverage for Top Level Employees
Like enriched DBL coverage in New York, Group Life /AD&D coverage favors high-level executives and business owners when you choose a tiered plan. Executives in the top tier enjoy reasonable premiums, while coverage is based on basic annual earnings, so your top earners have a higher coverage cap.
You can read more about Group Life / AD&D and see a sample tiered plan here.
“It’s been a challenging year for brokers, and I don’t want to look at this as a silver lining,” Cohen says. “But it took a pandemic for people to realize how important life insurance coverage is for preserving their legacy and making life a little easier for their loved ones in case the unthinkable happens.”
It’s now the insurance broker’s role to point employers and their workers in the right direction to coverage that will meet their needs, scale as their family or standard-of-living grows and give them the peace-of-mind to focus on what really matters today.
Opportunities Grow for Statutory Insurance Brokers
The past year has brought shake-ups for statutory insurance brokers.
- Record-high rate hikes for temporary disability benefits (TDB) in New Jersey
- New Family Leave Insurance benefits for New Jersey
- Increased benefits for Paid Family Leave in New York
- The introduction of family and medical leave coverage in two more New England states
Smart insurance brokers can easily find a silver lining in much of the new legislation. Opportunities exist for statutory insurance brokers to expand into new regions, upsell enriched coverage, and guide business owners toward the benefits of a private plan rather than writing their insurance through their state’s fund.
In fact, 37 states threw their hats in the ring this past election to pass Paid Family Leave acts on a state level. As more states embrace paid family leave legislation, it could ultimately become federal, where it would work in conjunction with the federal Family Medical Leave Act (FMLA), which offers unpaid job protection for those who are out of work due to illness or to care for family members.”
Statutory Disability Coverage Across the U.S.
Moving into 2021, nine states, Washington D.C., and Puerto Rico offer statutory disability plans to employees. Of those states, only Hawaii, New Jersey, and New York provide options to privatize statutory disability through an independent insurance carrier.
Take a look at this chart to see which states offer self-funding options in lieu of the state plan, and also which states permit private coverage through an insurance company.
Paid Family and Medical Leave Plans Across the U.S. at a Glance
California, New Jersey, New York, Washington, Massachusetts, and Rhode Island offer Paid Family Leave as subsets of statutory disability plans. For instance, PFL in New York is written as a rider to DBL coverage.
In New Jersey, Family Leave Insurance is included automatically with TDB premiums. In Massachusetts and Connecticut, the Paid Family and Medical Leave Act covers both family leave and medical leave. It can be written through the state fund or through a private insurance carrier.
It is important to note that workers cannot collect statutory disability or paid family leave concurrently with unemployment insurance or workers’ compensation benefits.
2020 Brought Changes to Statutory Disability and Paid Family and Medical Leave
Let’s take a look at the year in review and some of the changes that were instituted for statutory disability and family medical leave coverage across the U.S.
After Waiving the Signature Requirement to Privatize TDB, New Jersey Increased Premiums and Benefits
In 2019, New Jersey waived the signature requirement for employers to obtain temporary disability benefits coverage through a private carrier. In the past, employers needed to obtain signature consent from 50% + 1 of employees to privatize TDB in New Jersey.
This presented opportunities for brokers, since it became easier than ever to convince business owners to switch to a private carrier for superior service, more flexible benefits, and up to 20% cost savings.
In 2020, New Jersey increased TDB insurance premiums, but also expanded disability coverage up 85% of a worker’s average weekly wage, up to $881 per week. The state also expanded its Family Leave Insurance benefits and eliminated the 7-day waiting period to begin collecting FLI benefits.
The increased premiums give business owners more reasons than ever to write their TDB coverage through a private insurance broker.
New York Increased PFL Coverage as Per Initial Plans
New York State made headlines in 2017 when it introduced one of the most robust Paid Family Leave plans in all 50 states, rivaling California’s generous policy.
Benefits continued to increase through 2021, when they will reach a high of 67% of the current statewide average weekly wage (AWW). Workers can collect up to $971.61 per week in 2021.
With PFL benefits at their maximum, it’s more important than ever for New York business owners to consider enriching DBL coverage so it is in line with PFL.
Massachusetts Signed the Paid Family and Medical Leave Act
Massachusetts announced the MA Paid Family Medical Leave Act, PFML, in the middle of the year, with coverage beginning January 1, 2021. These benefits cover paid leave to care for infants, or children newly adopted or fostered within the past 12 months. Additional benefits will roll out July 1, 2021, with time off to care for any family member with a serious health condition.
Connecticut Introduced Family and Medical Leave Insurance
Following in the steps of neighboring New York and Massachusetts, Connecticut also introduced a Paid Family Medical Leave Act that goes into effect January 1, 2022, but employers must register with the CT Paid Leave Authority by December 31, 2020. Payroll deductions for PFML begin on January 1, 2021 for the state plan.
Private Plans Create Happy Customers
As more states add paid family leave benefits to their statutory disability programs, it’s important to understand the opportunities insurance brokers have to give their customers top-notch service, flexible claims, and potentially lower premiums through private coverage.
Reference the PDF here for clarity on the states currently offering PFL, FMLA and statutory disability or rolling out programs in the new year so you can be prepared to provide your customers with the best statutory disability benefits for their money.
To provide quotes for statutory disability for new customers, you’ll need a census containing the ages, genders, and salaries of all the owners and employees of the corporation. Reach out to The DBL Center through our chat box or call us at 631.293.5100 to get started.
In Addition to NJ Disability Insurance Rate Hike, New Jersey Expands Family Leave Insurance Coverage
Insurance brokers in the tri-state area know that New Jersey recently expanded its NJ disability insurance (TDB) to create one of the most competitive disability coverage packages in the country. The new TDB coverage provides income replacement of up to 85% of a worker’s average weekly salary, capped at $903 per week for 2021.
As of January 1, 2021, New Jersey employees must contribute .47% on the first $138,200 of earnings (capped at $649.54 annually). Meanwhile, employers contribute based on employee earnings, capped at $35,500 total annually.
While the NJ disability insurance premium increase may not have made New Jersey business owners happy, it represented an opportunity for brokers to present the advantages of privatizing TDB coverage for better service, expanded benefits, and cost savings of up to 25%.
As you approach New Jersey businesses to make the transition to a private plan for temporary disability benefits insurance, business owners may have questions about other changes to statutory benefits legislation in New Jersey.
Knowledge is power, and can help you build trust with your customers and prospects when you can answer their questions not just about TDB coverage, but about Family Leave Insurance (NJFLI) and changes to the New Jersey Security and Financial Empowerment (SAFE) Act. The SAFE Act protects victims of domestic violence or violent sexual attacks with 12 weeks of job-protected leave.
What Brokers Need to Know About FLI
Previously, New Jersey business owners with more than 50 employees (living in any state) were required to provide 12 weeks paid leave and job protection to their New Jersey employees to care for an ill or injured family member or to bond with a newborn or newly adopted child.
Changes to NJFLI legislation have expanded the definition of a family member to virtually anyone with a “close association equivalent to a family member.” In addition, employers with 30 or more employees (not 50) must provide FLI coverage to their employees who live in New Jersey. The state has also waived the 7-day waiting period to begin collecting FLI benefits. Finally, NJ employees do not have to use two weeks of PTO before filing an FLI claim; they can collect benefits and PTO concurrently or wait until their FLI has run out to use their PTO.
The SAFE ACT and NJ Family Leave Insurance
Employees who file for leave under the SAFE Act now also qualify for FLI benefits, without having to use their PTO first. Again, they can use PTO concurrently or after FLI benefits run out. The SAFE Act applies to any New Jersey employer with 25 or more employees in the organization.
Why It Pays for Business Owners to Privatize NJ Disability Insurance
The new FLI legislation isn’t putting any money in brokers’ pockets. But it’s important to know how it works to guide your customers toward the right benefits for their employees
Privatizing NJ disability insurance (TDB) does not affect FLI coverage, but does provide New Jersey business owners with the white-glove service they deserve, a chance to bundle ancillary benefits for added savings, and benefits that match or exceed the state plan at an equal or lower cost.
Contact The DBL Center to learn more about how benefits have changed for New Jersey business owners – and how you can use this knowledge to expand your book of business.
What Can Employees Do When Temporary Disability Runs Out?
Post updated on November 15, 2020
Covid-19 has brought many challenges to business owners, HR directors, and employees across the Northeast. It has also created many questions regarding temporary disability benefits and eligibility.
As a trusted insurance broker, it helps to have answers to frequently asked questions regarding temporary disability and long term disability payments. One of the most frequently asked questions, recently, addresses employees with lingering illnesses or injuries not incurred in the workplace: “What can I do when temporary disability runs out?”
Fortunately, there are multiple solutions. As a P&C insurance broker with The DBL Center’s vast network of top-rated carriers behind you, you’re equipped to assist with at least two of these:
- Private disability insurance (DI), sometimes called Disability Income coverage
- Group Long-term disability (Group LTD)
If a customer asks what their employee can do when statutory short term disability (TDB in New Jersey, DBL in New York, and PFML in Massachusetts and Connecticut) or private group short-term disability (STD) runs out, here are some options you can suggest.
Social Security Disability Insurance (SSDI)
Some people with an illness or injury may try to apply for Social Security benefits. However, to qualify for Social Security / Disability benefits, you must be unable to work for at least one year, or have an illness that will lead to death. The time between 26 weeks and a year is a long span to live without any income if you are unable to work.
Group Long Term Disability Coverage (Group LTD)
Group long-term disability insurance increases the length of time of coverage up to 60 months. Employers can choose from “same occupation” or “any occupation” coverage. Class I coverage, for the executives in a company, offers up to 60% of income replacement up to $15,000 per month.
The cost to the company is actually very small, especially if the employer purchases coverage bundled with statutory benefits or other ancillary benefits, like dental, vision, and Group Life / AD&D.
Group LTD benefits higher level employees in the same way enriched DBL does in New York, providing income replacement at a minimal cost. Employers can avoid tapping into their 401K or selling other investments. Let’s face it – especially in today’s market, selling stocks may not be the best answer for high-earners to free up capital for living expenses!
In addition to providing company owners and high-level executives with a safety net and peace-of-mind should they become injured or disabled, a generous group LTD package can also benefit the company as a whole.
It may help entice star talent, but, more importantly, it can help a business retain high-quality employees after they bounce back from an illness or injury. If a company takes care of someone in their time of need, they will return to work with a degree of loyalty. In fact, due to the strain financial difficulties place on a person’s health, having disability coverage to provide for themselves and their family could, in fact, help make a return to work after injury or illness possible.
Private Long-Term Disability (LTD) Insurance
For business owners who don’t want to make the investment in Group LTD, or for self-employed individuals, independent contractors, and solopreneurs, private long-term disability insurance provides an income replacement solution.
Since the premiums on this insurance are paid out-of-pocket, after taxes, the disability income is not taxable. Claimants receive their full benefits when they need the money most.
Why Healthy Individuals Need Disability Insurance More than Ever Today
Disability insurance may seem like a tough sell when it is not mandated by the state. But the coronavirus pandemic has made many people come to terms with their own health and even their mortality. More than ever, people are thinking about their financial future should they be unable to work for any length of time. This includes COVID-19 long-haulers, those who experience symptoms even after the worst of the illness has passed.
The Social Security Administration estimates that a 20-year-old employee faces a three in ten chance of becoming disabled before age 65. Other reports say one in four workers becomes disabled during their working life. These odds increase for heavy smokers, people who are overweight, or those who have a chronic condition such as heart disease, diabetes, or high blood pressure. And these numbers have undoubtedly risen since the pandemic.
Yet, only 45 percent of millennial workers have long-term disability insurance, according to The Hartford Financial Service Group. More than 20 percent of millennials said they would need help from family or friends or move back in with their parents if they were unable to work due to illness or injury, while another 20 percent would have to rely on credit cards or borrowing against their 401K retirement account.
While employees don’t want to consider being one of the 25 to 30 percent of people who become disabled, it’s a reality. And most disabilities are caused by illness, not injury. Knowing they are protected, whether through private income replacement insurance or employer-funded long-term disability benefits offers peace-of-mind and greater financial security.
Guide Your Customers to the Best Financial Decisions and Grow Your Book-of-Business
As a broker, remind your customers that temporary disability coverage doesn’t have to be “all-or-nothing.” Voluntary group long-term disability coverage can be fully employee-funded, with no out-of-pockets costs for the employer (other than the employer’s insurance premiums to cover themselves). Since this is a pre-tax benefit, some employees may enjoy the tax benefits, too, although it means they will have to pay taxes on their disability income if they ever make a claim.
Employers also have the option to split the costs of group LTD with their employees, or to fund the benefit completely as an incentive to recruit and retain top talent. You can help your customers weigh cost factors with the benefits of employee recruiting and retention based on their industry and region.
It costs more to gain a new customer than to upsell an existing account. In these challenging financial times, consider Group LTD, along with other ancillary benefits, as a means to grow your book-of-business and increase your commissions.
And don’t forget to use your Broker Dashboard to track it all! Schedule your free demo of this state-of-the-art statutory insurance net revenue tracker today.
Group STD v. MA FMLA: What’s the Difference Between MA Paid Family Medical Leave Act Benefits and Short-Term Disability?
Prior to the introduction of the MA Paid Family Medical Leave Act, Massachusetts workers relied on group short-term disability plans to cover partial income replacement for a non-work-related illness or injury.
With MA PFMLA benefits set to go into effect on January 1, 2021, (and additional benefits under the act to begin July 1, 2021), employers may wonder how this affects the need for group STD benefits within an organization.
Should employers and employees still invest in voluntary group short-term disability benefits?
What’s the difference between Group STD vs. PFMLA in Massachusetts?
Short Term Disability or Group STD vs. MA PFML (MA Paid Family Medical Leave Act)
MA PFML is a statutory benefit that all employers in Massachusetts with more than 25 employees must provide. It is similar to Paid Family Leave in New York, which is written as a rider to DBL coverage. The Massachusetts law adds a medical component to combine medical disability coverage with family leave benefits.
Employers can write their benefits plan through the Commonwealth of Massachusetts or opt for a private plan that:
- Meets or exceeds the benefits level and duration
- Has the same or more lenient requirements
- Offers the same or lower premiums than the state plan.
Costs will typically be shared between the employer and employee, although the employer may opt to fund more than their minimum percentage.
On the other hand, short term disability or Group STD is a voluntary benefit that can be funded by the employer or employees or shared between the two.
Do Massachusetts Workers Need Group STD Insurance Coverage?
Group short term disability coverage typically lasts until group long-term disability benefits (most commonly called “disability income,” or DI) begin. Your customers should know that MA Paid Family Medical Leave Act benefits offset disability insurance coverage; premiums may be lower for a group STD plan in Massachusetts since the MA PFML plan covers partial income replacement.
In New York, employers have the option to enrich DBL coverage to pay out more than the state maximum benefit. In Massachusetts, a group STD plan can fill this role. The MA Paid Family Medical Leave Act has a maximum weekly benefit cap of $850, which means that high-earners making more than $80,000 will receive a lower percentage of their income than others who are not maxing out the benefit.
As the owner of a Massachusetts business or a c-level executive or human resources director, investing in STD coverage for your employees can also benefit you should you become ill, injured, or unable to work.
Group STD Bridges the Gap Between Long Term Disability and MA Paid Family Medical Leave Act Benefits
In 2021, the MA Paid Family Medical Leave Act pays workers for up to 20 weeks of personal medical leave. However, if the worker already filed a claim for family leave or personal leave within the past calendar year, they may not be able to collect for the full 20 weeks this time around.
On the other hand, employees can collect STD income replacement for up to 26 weeks, regardless of other, unrelated leave.
Long-term disability insurance typically goes into effect 26 weeks after an employee becomes disabled. Short-term disability can provide income replacement for those six weeks (or more), when PFML runs out and before LTD kicks in.
Having financial peace-of-mind with income replacement can reduce stress on the employee and improve retention rates within a company. Combining PFML with Group STD and the best long-term disability insurance , plus ancillary benefits like dental, vision, and Group Life AD&D can help set a Massachusetts business apart. Being able to describe and explain these benefits to business owners can help Massachusetts brokers thrive in any economy.
FMLA vs. PFML in Massachusetts: Understand the Difference
It’s important to reiterate, as well, that PFML and other state paid family and medical leave programs are not the same as the MA Paid Family Medical Leave Act. FMLA only provides job protection, not income replacement. Additionally, some of the requirements and definition of a family member in Massachusetts may differ from the federal legislation. However, since FMLA in Massachusetts covers both partial income replacement and job protection, a Massachusetts employee should be able to take the necessary time off and know they will have a similar job description, position, and salary when they return to work.
View our glossary of short-term disability coverage here for more information on various benefits and protected leave in different states.
Reach out to your friendly DBL Center representatives to learn more about bringing these important employee benefits to Massachusetts business owners.
As Connecticut Explores CT Paid Family Medical Leave (PFML), Brokers Should Start Reaching Out
Following in the steps of New York and Massachusetts, Connecticut will become the third New England state to offer Paid Family Medical Leave (CT PFML). Like the Massachusetts Paid Family Medical Leave program, CT Paid Family Medical Leave will cover both short-term medical leave for employees and family leave to care for specific family members, under one policy. The leave also covers:
- Victims of family violence
- Family bonding with infants, newly adopted or new foster children within the first year
- Exigency
- Donor leave
What Is CT Paid Family Medical Leave?
Deductions for CT Paid Family Leave begin January 1, 2021, but claimants can’t file for the benefit until January 22, 2022. Business owners can register to write coverage through the State Fund as of November 1, 2020.
The DBL Center is staying in touch with our carriers in the market, as well as with the CT State Insurance Fund, to determine when and how employers can write a private plan. The DBL Center is working closely with our network of top-rated, preferred carriers to determine who has filed to write in this market. We will keep our brokers up to date, as early education is sure to be a key to success in showing Connecticut business owners the benefits of privatized CT PFML.
To qualify for the benefit, employees must have been employed within the last 12 weeks and earned at least $2,325 in at least one quarter from the first four of the past five most recently completed quarters.
For instance, if an employee earned $2,400 in the most recently ended quarter, but only $2,000 in the four prior to that, they would not qualify. But if they earned $2,400 three quarters ago, and then their wages dropped to $2,000 for the past two quarters, they would qualify.
Former employees who met the earnings and have been employed within the prior 12 weeks are also eligible.
Additionally, self-employed individuals and sole proprietors can opt into CT Paid Family Medical Leave coverage, as can Connecticut residents who are employed in a different state.
What Employers Need to Know About CT Paid Family Medical Leave
All employers with one or more employees are covered under the PFML law. The law also provides employers with the tools and resources to comply with the applicable laws and promote a happy, healthy, and positive workplace.
Employers in the State of Connecticut play a crucial role in helping workers access to paid time off to meet their various personal and family health needs under the CT Paid Family Medical Leave law. They have to:
- Make Payroll Deductions – Beginning January 1, 2021, the funding to support the program will come in the form of employee payroll deductions. The employers have to make payroll deductions that are capped at 0.5%. Because contributions are only based on earnings up to the social security cap, the calculation might require estimations in some cases.
- Submit Employee Contribution – Employers are responsible for withholding as well as submitting the payroll deductions for each worker quarterly. These deductions are submitted to the CT Paid Leave Authority. Failure to make appropriate contributions can lead to penalties.
- Communicate with the Authorities and Employees to Discuss Leave Requests – Employees need to apply for time away from work to their employers. Also, they need to apply to the CT Paid Leave Authority for paid leave benefits to receive income replacement benefits while they are on leave. In some situations, the employee, the employer and the Paid Leave Authority might need to communicate with each other in order to establish the reason for the leave or to verify the duration and frequency of the leave.
How You Can Help Connecticut Business Owners Choose a Private Plan
As in New York, New Jersey, and Massachusetts, who all offer paid family and/or medical leave benefits, employers can say no to the state plan and opt into privatized CT Paid Family and Medical Leave benefits, instead.
However, current legislation will require employee opt-in and private carrier approval via a vote. New Jersey recently waived the 50%+1 signature requirement to privatize TDB coverage. But brokers hoping to move into the CT PFML market in Connecticut are likely to face challenges getting employee buy-in to privatize benefits.
The good news?
Time is on the side of Connecticut brokers, with the legislation set to go into effect January 1, 2022. Now is the time to begin showing Connecticut business owners the benefits of a private plan. We have New York, Massachusetts, and New Jersey as examples of the advantages of privatizing paid leave.
These advantages, in general, include:
- Better, one-on-one service with a broker who truly cares about Connecticut business owners
- A choice of top-rated carriers
- Benefits equal to or better than those offered by the state, for the same price or lower than the state offers
In addition to getting employees to vote to privatize CT Paid Family Medical Leave, employees must also vote on the specific carrier in order to satisfy the CT statutory requirement.
Now’s the time to begin educating Connecticut business owners and show them the vast choices of carriers and plans they have when they work with DBL Center brokers. It’s time to show them how they can save by bundling ancillary benefits like dental, vision, and Group Life / AD&D. And to show them how white-glove service makes a difference, especially when employers and HR directors are struggling to navigate a whole new world of employee benefits with CT Paid Family Medical Leave.