Colorado Small Business Owners Save Money by Privatizing FAMLI
Sage Benefit Advisors, an Alera Group Company, is a health and employee benefits insurance agency in Fort Collins, Colorado. The company specializes in businesses under 50 lives. “Our average client type is 10 lives; we just happen to have over 1,000 of them. Our niche is small business,” said Tim Hebert, managing partner.
Colorado recently joined the growing number of states requiring paid family and medical leave benefits for employees. Every small business in the state must provide Colorado Family and Medical Leave Insurance benefits to employees, which means the FAMLI legislation applies to every business client Hebert serves.
Employers with fewer than 10 workers aren’t required to pitch in for the benefit. The state collects 0.45% of the required 0.90% of an employee’s average weekly wage to cover FAMLI premiums. Colorado business owners with 10 or more workers must contribute half the required premium to the state fund. However, they also have the option of privatizing FAMLI benefits to save money and receive more personalized service from top-rated carriers.
Hebert said he has relied on The DBL Center’s knowledge and carrier connections to help save clients money as Colorado rolls out this new benefit.
“The team has been incredibly knowledgeable,” Hebert said, indicating that his primary points of contact have been Michael S. Cohen, president and CEO, and Sonja Spruiel, VP, business development and underwriting manager. “Their service is phenomenal. They are super responsive and they’re on top of things like no one I’ve ever seen before.”
Colorado FAMLI Opens Doors for Sage
Hebert said that the introduction of Colorado FAMLI, in addition to representing another revenue stream, has helped expand Sage’s client base. “It’s helped us due to the new influx of clients we’re in front of. They’re asking questions, so it’s opened some doors,” Hebert said.
It helps Sage to have The DBL Center in their corner. The insurance wholesaler has been assisting brokers to quote and write paid family leave as a required benefit since it was first introduced in New York in 2017.
As they did in New York, The DBL Center team can leverage carrier relationships and bulk pricing to help Colorado business owners save money on this statutory benefit and, ideally, use the savings to expand their benefits packages with voluntary worksite and ancillary benefits.
“Because paid family medical leave is a form of short-term disability,” Hebert said, “it’s creating a lot of conversation around life insurance and long-term disability, as well.” This leads his clients to ask questions about other ancillary benefits.
Hebert said he’s worked with other insurance wholesalers in the past, but they don’t have the breadth of ancillary and voluntary products The DBL Center offers. “We’re using DBL Center for Paid Family and Medical Leave right now, but at some point we may expand that,” he said.
Helping Colorado Businesses Privatize: Achievement Unlocked
Admittedly, it’s a tight labor market and employers – especially small businesses – tend to be investing in employee salaries rather than enhanced benefits. But when it comes to privatizing FAMLI, Hebert said, it’s virtually a no-brainer for most business owners.
FAMLI premiums for 2024, when the benefit kicks in, began in 2023 on a quarterly basis. But even if business owners have already paid into the state plan all year, so far, they can get a refund if they privatize. They can use that money for their private plan premiums – often with thousands of dollars in savings left over.
“We talk through the savings to go through a private plan. Then we go back to the fact that private companies offer better service to the client and pay claims more efficiently than the state,” Hebert said. “So, businesses are saving money and receiving a higher level of service. We’ve been having very little resistance to that from anyone we’ve talked to.”
For Sage, having The DBL Center as a resource to shop those policies and operate as a back-office staff has made Hebert and his team more efficient, he said. “Just having DBL Center’s access to the market, with better service and pricing from the carriers, makes our world more efficient,” he said. “They are able to put together quotes from multiple carriers and help us move quickly to write policies. They are very good at what they do.”