Group Retiree Health Plans: Can Your Clients Benefit?
Group Retiree Health plans can reduce out-of-pocket healthcare costs for those ages 65+.
In today’s era of job-hopping and quiet quitting – the phenomenon where employees remain at their jobs but don’t perform at their highest level – enticing employees to stay engaged is more important than ever.
The FIRE movement, or Financial Independence, Retire Early, is leading more individuals to live frugally, plan ahead, and leave their jobs in their 30s, 40s or early 50s – well below the average retirement age.
For employers desperate to keep good employees in the workforce – and in their companies – it’s crucial to evaluate your healthcare insurance, disability insurance, paid family leave and ancillary benefits. But you should also think about retirement benefits, including a Group Retiree Health plan, as important recruiting and retention tools.
Think about it this way: Health care costs account for 15% of the average woman’s retiree’s income and 9% of the average man’s retirement income, according to a study by the Center for Retirement Research at Boston College. A portion of these costs come from paying for Medicare Part B and Part D premiums, Forbes reported. Average Part B premiums cost more than $170 per month in 2022 but can go as high as $538 for high-earning retirees. Part B also requires a 20% coinsurance payment.
Who Will a Group Retiree Health Plan Benefit the Most?
If you’re an insurance broker looking to write Group Retiree Health as part of a benefits package that includes short-term disability, private Paid Family and Medical Leave, and ancillary benefits, it’s important to remind your clients that company owners and the c-suite – who are often closer to retirement age than mid-level employees – will stand to save the most from a Group Retiree Health plan. After all, their out-of-pocket healthcare costs, just based on Medicare premiums, could be more than double the average employee.
Providing Group Retiree Health Benefits, which can cover copays, deductibles, and coinsurance, can entice employees at every level to stay with your company until they ready to retire and – perhaps more importantly – until they are ready for Medicare at age 65. A good benefits package is no substitute for a positive company culture, clear direction, and room for advancement. But for future-focused employees thinking about how they might pay for retirement, it can sweeten the deal.
What You Should Know About Group Retiree Health Benefits
Fully insured group retiree health benefits have no network requirements, which means that beneficiaries can receive treatment from any healthcare provider that accepts Medicare. No medical exam is required, and no medical questions are asked. The DBL Center can write Guaranteed Issue coverage for any retiree and their spouse over the age of 65 enrolled in Medicare A and b
Retirees can begin coverage any time of the year with a qualifying Medicare event.
Coverage may include deductibles, co-pays, and co-insurance, as well as prescription drugs. Plans are available where the retiree pays the premiums, the company pays the premium, or they can share the costs, with employers paying a flat rate or anywhere from 0% to 100% of the premium.
Your clients can opt to include ancillary coverage like vision, hearing, chiropractic, acupuncture, and physical exams as part of the plan. Some programs also provide gym access or at-home fitness tools and resources to plan members.
Who Are Group Retiree Health Plans Best For?
If you have clients who are currently providing retiree healthcare coverage but looking to reduce costs, switching to a GRH plan that works with Medicare coverage could be the solution. Likewise, if you have clients in industries such as manufacturing, financial services, universities, hospitals, utilities, public entities and even the insurance industry, GRH plans can help reduce their costs. These industries tend to have large numbers of retirees and employees close to retirement.
According to the U.S. Department of Labor, employers can shift, reduce, or terminate health benefits at any time. However, switching to a group retiree health plan can reduce costs while maintaining good relations. This is especially important for publicly held companies whose value can be swayed by negative media attention.
Group retiree health plans provide a balance that helps organizations control costs while providing coverage to retirees and offering those close to retirement peace-of-mind that their insurance benefits may cover some significant expenses in their later years.
The DBL Center has the resources and carrier relationships to help you write the best Group Retiree Health plans so your clients can provide the full benefits package expected by employees today. Meanwhile, as a DBL Center broker, you can expand your book of business and commissions with new and existing clients.
Long-Term Care Insurance: The Next Benefit You Need to Think About
When employees are in their 30s, job-hopping and looking for the organizations with the best salaries and benefits packages, long-term care insurance (LTC) is not usually on their minds.
But, the fact is, it should be.
Life insurance sales increased during the coronavirus pandemic. And it’s good that even younger employees started exploring their own mortality and ensuring their families are cared for in the event of their death.
But everyone, from company executives to hourly workers should also be considering long-term care insurance as an important part of voluntary worksite benefits or individual benefits.
I was fortunate when I was younger, being in the insurance industry, that I had mentors who explained why I should buy LTC in my 30s. I got in while rates were low.
I know the peace-of-mind it gives me, today, knowing that my family won’t have to worry about taking on the burden of caring for me in my later years or facing financial hardship if they have to pay for my long-term care.
However, not enough insurance brokers are selling this benefit to their clients. Either you haven’t heard enough about it or you simply don’t realize the importance of it. Unless you are caring for aging parents, you may not realize how much long-term care costs or how important it is to alleviate the challenge of caregiving on family members.
Rates have gone up since years ago and will continue to rise. The best time to buy LTC would have been a decade ago. The second-best time, as they say, is now. It’s simply an easier sell right now than it will be in the future when rates go up again.
Before we go further, let’s explore the basics of LTC and LTC insurance.
What Is Long-Term Care?
Long-term care describes physical assistance with the activities of daily living (described as ADLs by medical professionals) for an individual who is elderly, injured or disabled.
Individuals in need of long-term care often need assistance with personal hygiene and getting dressed, as well as basic household tasks like cooking and cleaning. Caregivers typically do not provide nursing or medical assistance. Most caregivers cannot administer medications but can make sure the patient takes them. While they cannot treat or diagnose a medical condition, they should be able to recognize signs of medical emergencies or any changes in the patient’s condition.
What Does Long-Term Care Insurance Pay For?
LTC pays for assistance in skilled nursing facilities, assisted living facilities, and also at-home care. LTC will also pay for hospice care.
If the individual is being cared for by family members or someone else, LTC can pay for adult day care or respite care to give caregivers a break. Respite care benefits may be available before the patient has filed a claim for other LTC.
Why LTC Is So Important
Long-term care insurance fills in where Medicare, Medicaid, and medical insurance does not provide coverage for care for individuals who are chronically or terminally ill, injured, or unable to perform ADLs due to age.
Medicare typically does not cover long-term care and, if it does, only for 100 days. Typically, Medicare will only cover skilled nursing care, not coverage to perform activities of daily living.
Medicaid will only cover LTC or nursing care once all other assets have been depleted. This means anyone using Medicare for LTC will have no inheritance to leave their children and no other funds to splurge and enjoy their last days as best they can.
Most medical coverage only pays for acute care. Like Medicare, there are sub-limits or caps to the amount of extended care traditional medical insurance will pay for.
According to LongTermCare.gov, costs in 2016 (the most recent year the government has data available) for nursing home care in a semi-private room were an average of $6,844 per month. A private room would cost an average of $7,698 per month. You could afford a Manhattan apartment for those prices if you didn’t need skilled nursing care.
A one-bedroom unit in an assisted living facility ran an average of $3,628 per month.
If you opt for at-home care, APlaceForMom.com cites the median cost of in-home, full-time care at roughly $4,480 per month for 44 hours per week of care. The rate for in-home care services rose as much as 3.8% per year between 2004 and 2020. That was before inflation, the great resignation, and rising minimum wage pushed rates for hourly workers like Home Health Aides higher.
If your plan is to have children care for you if anything happens and you are unable to care for yourself, ask yourself this:
- Are my children financially stable enough to care for me?
- Would they have the time if they are working a full-time job?
- Do they live close enough to provide full-time care?
- Would it take away from devoting their time and attention to their children, my grandchildren?
- If one child takes on most of the burden, will this create resentment for their siblings and cause family squabbles?
These are all factors to consider, although you can’t put a price on them. Having LTC insurance can alleviate the financial and emotional burden and give your family options without having to worry as much about costs.
Whether you’re considering LTC for yourself or sharing the details with your clients in order to create an additional revenue stream with LTC commissions, the time to buy is now.
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.
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.”
Insurance Brokers: Don’t Let Summer Fridays Hold You Back from Your Sales Goals
As we enter a new working world post-pandemic, with many employers permitting flexible working hours or work-at-home arrangements, it’s required some adjustments.
A new McKinsey American Opportunity Survey revealed that 58% of Americans report having the opportunity to work from home at least one day a week, with 35% working from home five days a week.
Contrary to Tesla CEO Elon Musk’s belief that people who are working from home “should pretend to work somewhere else,” the assumption is that when employees are working from home, they’re really working.
Several studies show that employees permitted to work remotely are actually more productive – by as much as 47%, according to one report.
But can we talk about Summer Fridays for a minute?
As an employer, it’s a challenge to find a balance between flex-time and productivity. The DBL Center has always offered our staff Summer Fridays. Between June and September, we cut out early to enjoy an extended weekend with our families. This allows more time for travel, relaxing, running errands, or soaking up the sun Long Island’s amazing beaches.
But even with our reduced office hours, The DBL Center team is there when you need us. Our 24/7 chat means someone can answer your questions promptly – from wherever we may be. And when we’re in the office, we are 100% available with all the tools and resources you need to help your clients navigate an ever-evolving landscape of statutory and voluntary employee benefits.
How to Cope When Summer Fridays Become Summer Thursdays – And More
In many companies, we are noticing that Summer Fridays are bleeding into Summer Thursdays, with people enjoying three-day work weeks or other flexible arrangements for the summer. For employers who can make this work within their company culture, flexible hours are a proven retention tool.
Then you have vacations, holidays, corporate get-togethers or team retreats, and there are a dozen things pulling people out of the office and away from their desks all summer.
Those who are still in the office four, or even five days, a week must work around these limitations. They might be unable to reach colleagues whose input is needed to get a job done. Projects can face delays. And it can be frustrating to not get immediate answers to questions. Fortunately, there are some tactics you can use to get things done.
Maximize Connection Time with Partners
When people are out of the office for extended periods, it can make it more difficult to get quotes, move processes along, or close deals. This is true whether they are co-workers or business associates.
Maximize the time when people are most reachable early in the week to schedule meetings and calls. Use Thursday afternoon and Friday morning for deep focus work that may not require input or feedback from others.
Look at it this way: Without a million meetings, you can get more of your work done on Thursday and leave more time for play and a relaxing weekend!
Prioritize To Get More Done in Less Time
There’s no need to be staring longingly out the window at the horizon while your colleagues are gazing at a beach sunset. Whether you use time-blocking, the Pomodoro Method, or some other tactic, consider ways you can be more productive during your time in the office. Then, you can enjoy your Summer Fridays without a heavy weight on your shoulders.
Don’t Let Yourself Burn Out
Finally, it can be easy to become resentful watching others take advantage of flexible hours while you’re tied to your desk. Find outlets, whether it’s a weekend getaway with your family or time at the gym every evening, to avoid burning out.
Know Your Benefits
Take note of the time and benefits available to you if you’re caring for a new child in your life or an aging parent. You may be able to file a PFL claim in NY or PFML in several other states to get paid for that time you’re bonding with your child or sitting in a doctor’s waiting room with a relative.
Partner With Companies Who Are There for You
Finally, choosing the right partners. With The DBL Center as your wholesale general agency, we can help make it easier for you to keep your business moving through the summer and achieve your monthly, quarterly, and annual sales goals.
Our resource center can help you find the answers to many questions regarding paid family and medical leave across the U.S., voluntary worksite benefits, and statutory disability insurance.
Our proprietary Broker Dashboard: Net Revenue Tracker puts all the information you need about cancellations, renewals, and commissions at your fingertips, whether you’re in the office, working remotely, or on the road.
You’re never on your own with The DBL Center as your wholesale general agency. We are here to help you accomplish more in less time so that you can enjoy your summer, as well.
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.
Individual Life Insurance and Carve-Outs for Disability Can Help Your Clients Retain Top Execs
When we write group benefits, including statutory disability and ancillary benefits, we often showcase how insurance coverage like enriched DBL in New York can aid in recruiting and retaining new employees and middle management. But are your clients focused on their high performers, top-tier employees – and themselves, as the company owners? Individual life insurance, fully funded by the employer, and executive carve-outs for disability insurance, can give employers and top executive the coverage they need.
Are you helping your clients explore ways you can enhance their insurance coverage to benefit company owners and high-performing executives?
Starting Salaries are Higher Than Ever
College graduates are earning more than previous generations, and the salaries they command in this tight labor market may not seem commensurate with their experience in any given professional field. The National Association of Colleges and Employers survey lists starting salaries for 2022 college graduates at roughly $55,000, which is 2.5% higher than last year.
Think about this: Undergrads are leaving school expecting a starting salary of $85,000. And if they are going into petroleum engineering or another technical field, that expectation would not be wrong. Technical majors average $80,000 annually, in their first year of work, while petroleum engineers can pull in close to $88,000, according to statistics from ThinkImpact.com.
While salaries for executives and upper management have also increased, these upper-level employees are not receiving raises that put them in line with new graduate salaries. ZipRecruiter.com reports that the average corporate executive salary for 2022 is $82,180 a year.
Look to Individual Life Insurance Coverage and Executive Carve-Outs to Level the Playing Field
Insurance coverage like individual life and disability carve-outs for top-level executives and company owners can aid in employee retention and deliver peace-of-mind to a company’s highest performers.
By reducing monetary worries and stress, the right employee benefits can help foster a positive company culture and a more productive workforce – starting from the top, down.
What Are Executive Carve-Outs for Life Insurance Coverage and Disability?
As most insurance brokers know, typical group life / AD&D coverage delivers a term life policy for up to $50,000, either funded by the employer, paid for by the employee with pre-tax dollars, or offered on a cost-shared basis. The coverage is usually not portable, which means the policy ends if the employee leaves or retires. Any additional coverage beyond the $50,000, funded by the employer, is typically considered a taxable benefit.
However, employers can opt for an EE (executive employee) carve-out to cover high performing individuals, c-suite executives, and owners or partners in a company. These EE carve-out policies are fully funded by the employer and may also generate tax incentives and deductions for the employer. Your clients may not be aware of how this incentive can help them and top-tier employees in their company, while reducing their tax liability.
A universal or whole-life carve-out is typically portable, which means executives hold the policy after the leave. The policy will accumulate cash value, which means it can be part of an executive’s retirement strategy.
Long-term disability carve-outs function in the same way, delivering enhanced, portable benefits to top executives.
Are Executive Carve-Outs Different from Buy-Up Coverage?
Another option to offer your clients is Buy-Up coverage. Like EE carve-outs, buy-up coverage for life insurance can be offered as an incentive to top performers or a reward to employees who have stayed with your company for years. It can help long-time employees feel valued amidst an incoming workforce that is demanding higher salaries and better benefits can past generations.
Buy-up coverage is offered on a voluntary basis, however, and doesn’t cost the employer any money out-of-pocket. It’s typically reserved for executives and high-performers, and can help incentivize longevity within a company.
How Enriched DBL Benefits the Highest Paid Employees in a Company
Finally, New York business owners should consider enriching DBL benefits up to 60% of an executive’s salary. Especially in the face of an uncertain investing environment, where many experts are predicting a bear market on the horizon, executives want to know they can tap into other resources to replace their income in an emergency.
Having enriched short-term disability coverage in the event of a non-work-related accident or illness means they can let their investments sit, rather than selling in a down market, when it may be harder to recoup losses later.
The DBL Center Can Help
Finding the right insurance coverage for your clients requires asking the right questions and honing in on the challenges they may face recruiting or retaining c-suite executives and top-level managers. What are the company executives’ biggest financial fears? How can the right insurance coverage give them peace-of-mind and potential tax savings?
The DBL Center team can work with you to pinpoint the insurance coverage your clients want, from universal life to enriched DBL. Plus, we have the technology, through our Broker Dashboard: Net Revenue Tracker, to help you track renewals and cancellations and stay on top of your clients’ evolving needs. It’s never too late – or too early – to help your clients enhance coverage to retain employees and boost productivity.
Ancillary Benefits: Did You Know The DBL Center Offers These Benefits?
Our brokers have come to trust us for the lowest premium rates and white glove service when it comes to statutory benefits, including DBL in New York, TDB in New Jersey, TDI in Hawaii and, now, Paid Family and Medical Leave in the New England states.
But, through our long-term relationships with top-rated carriers, we also provide a variety of other benefits to assist not just employees, but executive employees and business owners. After all, when accident, illness, or injury strikes, financial hardship does not just affect middle management or hourly wage workers. The pandemic taught us a stark lesson. Financial misfortune can strike anyone, at any time.
For many executive level employees, the right group benefits and disability insurance can help them avoid tapping into retirement investments or high-yield investments for day-to-day expenses. Instead, they can pay low premiums over time and receive the money they need to maintain their standard of living or, in the case of business owners, meet overhead costs to stay in business.
Bundling these executive benefits with ancillary benefits for all workers is often an easy sell. The ones who benefit most from executive carve-outs for life and disability, key person insurance, and enhanced dental and vision benefits are also the decision makers when it comes to employee benefits. They will want to take advantage of the products that not only increase employee satisfaction, productivity, and retention, but also benefit themselves.
Take a look at seven areas The DBL Center can help you serve your customers with group life, enhanced disability, long-term disability and other ancillary benefits. Then give us a call so we can help you quote the lowest rates and appropriate coverage levels for your clients.
Carve-Outs for Individual Life and Disability
Hiring employees at any level is difficult right now. But your clients recognize that their most important employees are their moneymakers – the high-earners who bring in the business, generate the profitable ideas, and contribute to the DNA of the company and its brand.
Carve-out plans enable businesses to provide individual life insurance and disability coverage beyond what the organization’s group benefits provide. These benefits can help entice top talent to remain within your organization. There may also be tax advantages to executive carve-out plans.
Disability or Life Insurance to Fund Buy-Sell Agreements for Partnerships
Partners and co-owners within a business often have buy-sell agreements that stipulate terms in case one partner dies. But if a person should suffer a long-term disability, the buy-sell agreement may not cover that contingency.
A disability insurance policy that includes a buy-sell agreement can provide the funds for salary replacement in the case of short-term or long-term disability. It can also be used to buy out the business if the disability is deemed permanent. Executive partners and co-owners should consider enhancing their policy with these benefits to protect themselves, their family, and their income in the event of accident or illness.
Buy Up Coverage for Long Term Disability or Life Insurance
Buy-up coverage is similar to executive carve-outs, but can be offered on a voluntary basis to any high-income earners or executives. It is not for an elite group that the company owners may deem “irreplaceable,” but to any executive employee who wants to pay for the additional coverage.
Buy-up coverage could deliver as much as 66.67% of an employee’s earnings, up to a maximum benefit of $10,000 in some cases. Depending on the carrier and plan, these numbers may vary. Your DBL Center representative can help you find the plans that are best for your top employees, and they can be provided on a cost-share or completely voluntary (employee-funded) basis.
Business Overhead Insurance
Sole proprietors and small business owners face unique needs and challenges when it comes to their own health and mortality. Business overhead insurance, written as a rider to long-term disability benefits, can help pay a business owner’s expenses to keep the business running even if they are unable to work or an extended time period due to disability.
Key Person Insurance
Similar to executive carve-outs for the individuals who are most valuable to a company’s bottom line, key person insurance covers the business if something should happen to an owner, key executive, or top moneymaker.
If a business could not run, or would not be successful, without a certain individual, key person insurance protects the company if that person dies or becomes disabled. The company is named as the beneficiary of the insurance. Sometimes, this product is called “business life insurance,” as it protects your business in the event of the death of key personnel.
Long-Term Care Insurance
Long-term care insurance is becoming more popular than ever as people recognize the value of not having to rely on family members to care for them as they age. Long-term care insurance protects the employee or executive’s assets, and provides a daily amount of money for care should they become ill or disabled.
LTC can be offered as a group benefit, bundled with other ancillary benefits to keep premiums low. Like other benefits, it can be fully funded by the employer, funded by the employee on a voluntary basis, or the premium costs can be shared.
Individual Dental and Vision Coverage with No Waiting Period
When employers shop for dental and vision coverage, they want to know that they can work with their choice of providers locally. They want low deductibles, coverage for most services (including preventative treatments and regular check-ups) and no waiting period for new employees.
If you’d like to offer your clients these advantages with dental and vision coverage, The DBL Center can help. Thanks to our decades of carrier relationships and the ability to bundle ancillary benefits with short-term disability and other statutory benefits, we can help you write the policies that deliver what your clients want in today’s competitive business environment.
Reach out today for more information.
New York Disability Insurance and Voluntary Employee Benefits: The Workforce Retention Solution Your Clients Need
Is enriched New York disability insurance the way to keep high-level workers in tech, finance, and other competitive fields?
There’s a mass exodus of white-collar workers from a variety of fields, including finance and technology. What experts are calling the “Great Resignation” continues in spite of six figure salaries for investment bankers fresh out of college and employer accommodations such as flex-time and remote work for professionals in a variety of other industries.
Survey Finds Skilled Employees Leaving the Workforce En Masse
A new survey from HiBob, an HR/people management platform and Fiverr, an online freelancer marketplace, has revealed that it’s not just hourly wage workers who are jumping ship, either. Forty-six percent of HR professionals surveyed said that managers and directors are leaving, rather than entry-level workers.
“This leaves companies with a massive skills gap… They need to fill manager and director roles, ones that require years of experience and knowledge,” said Shany Malbin, general manager of Fiverr Business, in a GoBankingRates article.
The study went on to reveal that it takes, on average, as much as six months to hire new full-time employees. Coupled with the costs associated with recruiting and training new hires, it is in any business owners best interests to retain their in-house talent as long as possible.
But how can New York disability insurance and voluntary employee benefits make a difference?
Skilled Talent Turns to Freelance Gigs
The report revealed that 54% of HR professionals said many workers that resigned started their own business or decided to freelance. Workers are seeking flexibility, the ability to set their own hours, and work from anywhere. The DBL Center, which has excellent retention rates for our key employees, has offered as much flexibility as possible to our workers since 2004. “All I have done over the years is reinvested in technology to keep things current and safe from a security perspective, enabling my team to have continued flexibility,” said DBL Center President and CEO Michael Cohen.
Offering flexible hours, remote work, and perks like on-site childcare may help keep top employees. Statutory PFL in New York can also entice workers who are caregivers by giving them flexible, paid time off to care for children or their aging parents.
For many workers, statutory benefits like New York disability insurance, along with voluntary employee benefits and enriched DBL packages, could be another draw that keeps them employed. After all, freelancers in New York aren’t required to provide their own New York disability insurance and ancillary benefits are rarely available – or affordable – for self-employed individuals.
Why New York Disability Insurance Matters to Upper-Level Employees
Enriched DBL coverage tends to benefit executive-level employees and management as much, if not more, than it benefits other workers in an organization. Enriched DBL coverage enhances New York disability insurance to a cap of $850 per week. That’s not likely to cover all the monthly expenses of a six-figure, salaried employee – especially in New York. But coupled with accident insurance or critical illness insurance, it can help an ill or injured employee avoid tapping into their investments or rainy-day savings fund, offering peace-of-mind for the employee and their family.
“It takes 7.2 years to double income from investments at a rate of 10%,” explains DBL Center President and CEO Michael Cohen. “When employees have savings, it’s wise to keep it parked where it can grow.”
Similarly, ancillary benefits like vision, dental, and Group Life / AD&D offer tremendous value to employees who are likely to invest in regular vision and dental care, including braces for their kids.
How You Can Profit from the Great Resignation and Employee Retention Struggles
Insurance brokers are in a unique position to solve workforce retention challenges in a variety of industries, including finance and technology.
Spotlight New York disability insurance and voluntary employee benefits as a way to keep talented employees from taking the entrepreneurial route. Point out the cost savings employers will experience when they bundle statutory benefits like PFL and DBL with enriched DBL and ancillary benefits.
For business owners, enriching their employee benefits package will cost less than recruiting, hiring and training new talent. Productivity won’t suffer and they can focus on growing their business, knowing that their insurance broker is working in their best interests as a crucial part of theirteam