Benefits Landscape: Fitting the Pieces Together

1. Benefits Landscape:Fitting the Pieces Together NEXT

2. Menu By taking this tutorial, you will be able to effectively position our company’s voluntary benefits to a decision maker because you will understand the benefits landscape, which means to you, you will be prepared to discuss Colonial Life’s role in the marketplace, and the real benefit to you is that you’ll feel confident that you are delivering the best benefits solutions to working Americans. Employer-Offered Core Benefits Flexible Benefits Plans (Section 125) Understanding and Positioning Our Products Need for Voluntary Benefits BACK NEXT

3. How does Colonial Life fit within the benefits landscape? Benefits Landscape Tip : Click on the puzzle piece to go to that lesson! BACK MENU NEXT

4. Benefits Landscape Based on a simple concept: While you work, you pay taxes into the Social Security system, and when you retire or become disabled, you, your spouse and your dependent children receive monthly benefits that are based on your reported earnings. Also, your survivors can collect benefits if you die. Reference: Social Security Online. http://www.ssa.gov/glossary.htm#SAccessed 10-6-2011. Social Security BACK MENU NEXT

5. Social Security Benefits Landscape • Mandatory • Employer pay FICA taxes of 7.65% • Employee pay FICA taxes of 7.65% Drawbacks • Individual must wait 5 months to apply for Social Security disability • Doctor must state that you will be out for at least one year or that you will die within the first year • Typically requires several hearings before approval BACK MENU NEXT

6. Social Security Scenario Benefits Landscape Jim, 43, has worked for seven years in a factory. He is a father and a husband. It’s winter, and the sidewalks are covered in ice. One day, Jim was walking outside and loses his balance. He falls and injures his back. After being rushed to the emergency room, doctors performed surgery on his ruptured discs. Due to his injury, Jim is unable to work. After waiting six months, his social security claim has been denied. Jim and his wife will now have to exhaust their life savings and or borrow from family and friends to make ends meet. BACK MENU NEXT

7. Benefits Landscape Social Security What do we offer that could help employers and employees with similar situations? Voluntary Accident and Disability • Cover employees’ accidents that happen on- and or off-the-job • Pay directly to the insured BACK MENU NEXT

8. Benefits Landscape Lesson Quiz It usually takes close to _____ to begin receiving Social Security payments. • 12 days • 5 months • 6 months • 12 months BACK MENU NEXT

9. Benefits Landscape Lesson Quiz To qualify for Social Security, a doctor must state that you will be out for at least ______ or that you will die within the first year. 14 days • 5 months 6 months • 1 year BACK MENU NEXT

10. Benefits Landscape A government-mandated program that provides compensation and medical expense payments to employees and their dependents if the employee suffers a job-related illness, injury or death. Employers in most states are required to pay premiums to fund these programs. Workers’ Compensation only pays workers who are injured on the job, and it does not cover unemployment. Reference: “Workers’ Compensation.” Accessed 10-20-11. http://www.investopedia.com/terms/w/workers-compensation.asp#axzz1bLb7pW7a Workers’ Compensation BACK MENU NEXT

11. Workers’ Compensation Benefits Landscape • Mandatory but can vary by state • Paid 100% by the employer • Pays 100% of medical bills if injury is related to the job • Pays up to 2/3 of income with a state-specific maximum amount • Limited by state specific elimination periods • Determines premiums based on industry rating and claims experience BACK MENU NEXT

12. Workers’ Compensation Scenario Benefits Landscape Karen is a 36-year-old single mother of three. On a family vacation, Karen goes skiing down a steep slope. She loses her balance and severely injures her back. She’s due back to work on Monday. She knows that if she is out of work she won’t receive a paycheck, and since this injury happened while off-the-job, she won’t be compensated. As a single mother, she worries that any additional medical bills will jeopardize their family’s financial situation. She decides not to go to the doctor, knowing she can’t afford to pay for the treatment. On Monday, Karen goes into work, still in pain. She claims to have slipped on ice while at work, and tells her employer Timothy. Immediately she goes to the emergency room for treatment. Timothy sits in his office, concerned. He knows that since Karen has claimed her injury happened while at work, it is considered a workers’ compensation claim. Furthermore, she is the third employee this year to file for workers’ compensation on a Monday morning. BACK MENU NEXT

13. Benefits Landscape Disadvantages BACK MENU NEXT

14. Benefits Landscape Workers’ Compensation What do we offer that could help employers and employees with similar situations? Voluntary Accident and Disability • Covers employees’ accidents that happen off-the-job • Off-the-job coverage is not provided with Workers’ Compensation • Helps minimize Workers’ Compensation rate for the employer BACK MENU NEXT

15. Benefits Landscape Lesson Quiz Workers’ Compensation pays 100% of medical bills if the injury is __________. An accident Off-the-job Job-related Employer’s fault BACK MENU NEXT

16. Benefits Landscape Lesson Quiz Workers’ Compensation pays up to 2/3 of income. Both the percentages and maximums are __________. State-specific Equal Employer-specific Employee-determined BACK MENU NEXT

17. Benefits Landscape Lesson Quiz For Workers’ Compensation, there are state-specific elimination periods. True False BACK MENU NEXT

18. Benefits Landscape Lesson Quiz Workers’ Compensation can be retroactive to day one if the employee is out of work for a state-specified number of days. True False BACK MENU NEXT

19. Benefits Landscape A type of health expense insurance that is designed to pay a certain percentage (such as 80 percent) of hospital, surgical, and medical bills. Major Medical • Definitions: • Co-insurance • Co-pay • Deductible • COBRA • HMO • PPO • POS • Maximum out-of-pocket expense BACK MENU NEXT

20. Major Medical Benefits Landscape • Voluntary • Has a lifetime maximum for each policy • Range of deductibles • Carries co-insurance • Comes in these forms: • HMO • PPO • POS BACK MENU NEXT

21. Major Medical Common Features Benefits Landscape • Co-insurance – varies by state • Deductibles – range from $250-$5,000, if not more • Out-of-pocket maximums • Portability through COBRA for 18 months after termination* * “Health Plans and Benefits.” United States Department of Labor. Accessed 10-24-11. http://www.dol.gov/dol/topic/health-plans/cobra.htm BACK MENU NEXT

22. Major Medical Scenario Benefits Landscape Stacey, a wife and mother of two, has been admitted into the hospital. An oncologist informs her that she has cancer and will need immediate treatment. Two months later, Stacey has already incurred $20,000 of medical expenses. Her coworkers at the dentist office she’s worked at for ten years had a fundraiser to help pay for some of her medical expenses. Even though she has major medical coverage and her coworkers had a fundraiser, Stacey and her family still struggle to maintain their lifestyle due to the numerous medical expenses and other out-of-pocket costs related to her cancer treatments. BACK MENU NEXT

23. Benefits Landscape Major Medical What do we offer that could help employers and employees with similar expenses? Voluntary Hospital Confinement • Pays cash which can offset the deductible and out-of-pocket medical and non-medical expenses • Gives employers more options with the costs of medical benefits • Gives employers greater control of the rising costs of medical coverage Voluntary Catastrophic Illness • Helps employees deal with out-of-pocket expenses associated with catastrophic illnesses such as cancer BACK MENU NEXT

24. Benefits Landscape Lesson Quiz Major medical comes in the form of __________, __________, and ________ plans. Core benefits, voluntary benefits, and flexible benefits PPOs, Health Savings Accounts, and Flexible Spending Accounts • Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), and Point-of-Service Plans (POS) Dental, Vision, and Health Maintenance Organizations BACK MENU NEXT

25. Benefits Landscape Lesson Quiz Major medical plans are portable through __________ for 18 months after termination of employment. COBRA ERISA Colonial Life Aflac BACK MENU NEXT

26. Benefits Landscape A type of insurance coverage offered to a group of people. This coverage will provide a benefit to the beneficiaries if the covered individual dies during the defined covered period.  Reference: http://www.investopedia.com/terms/g/group-term-life-insurance.asp#axzz1a0sk7kfJInvestopedia. “Group Term Life Insurance.” Accessed 10-6-2011. Group Term Life BACK MENU NEXT

27. Group Term Life Insurance Benefits Landscape • Voluntary • One to three -year renewable policy • Not portable • Participation requirements • Benefit amounts based on earnings, position and occupation or flat benefit • Usually includes a waiver-of-premium provision • May offer a tax advantage • Definitions: • Renewable • Waiver of premium BACK MENU NEXT

28. Group Term Life Scenario Benefits Landscape Allentown Memorial Hospital offers its 150 employees a group term life policy. • Term life policy: does not build cash value • Provides protection for employees only • Pays $10,000 death benefit to beneficiary • Not portable BACK MENU NEXT

29. Benefits Landscape Group Term Life What do we offer that could help employers and employees with similar expenses? Voluntary Life • Supplements an employer’s existing group term life program by providing affordable life coverage • Spouses and dependents can be covered, not just employees • No participation requirements • No cost to the employer • Voluntary products are also portable BACK MENU NEXT

30. Benefits Landscape Lesson Quiz The typical group term life policy is a ______ renewable policy with no cash accumulation feature. It provides protection only. • 14 days • 5 months • 6 months • 1 year BACK MENU NEXT

31. Benefits Landscape Lesson Quiz Group term life policies cover employees only. • True • False BACK MENU NEXT

32. Benefits Landscape Group Long Term Disability Replaces wages lost as the result of a non-occupational, disabling accident or sickness. Reference: Positioning Products with the Employer –Instructor Guide. 1/2006. BACK MENU NEXT

33. How it differs from short-term disability Elimination period Duration of the benefit period which may be 5 or 10 years or to age 65 A more restrictive definition of disability Group Long-Term Disability Benefits Landscape Other typical characteristics • Voluntary • Not portable • 6 months is most common elimination period • Benefits range from 40-66 2/3% of employee’s pre-disability gross salary • Definitions: • Elimination period • Short-term disability • Long-term disability BACK MENU NEXT

34. Group Long-Term Disability Scenario Benefits Landscape Tyler, 28, is an engineer and sole provider for his family. One day he was driving when he was badly injured in a car accident. Paramedics flew him to a hospital, where he underwent several surgeries. The doctors advised Tyler not to return to work for at least three months. In the meantime, Tyler and his family will need to rely on their life savings and or borrow from family and friends to make ends meet. BACK MENU NEXT

35. Benefits Landscape Group Long Term Disability What do we offer that could help employers and employees in a similar situation? Voluntary Income Protection • Helps employees protect their paycheck • Replaces a portion of income to offset financial losses • Helps cover everyday living expenses such as house payment, car payment, light bill and lunch money for the kids BACK MENU NEXT

36. Benefits Landscape Lesson Quiz With Group Long-Term Disability, an elimination period is a period for which no benefits are payable for __________ . • 1 month or less • 1 month or more • 2 months or more • 3 months or more BACK MENU NEXT

37. Benefits Landscape This question has multiple correct answers. Select all that apply. Lesson Quiz The definition of disability for long-term coverage differs from _____ and from _____. • State to state • Person to person • Employer to employer • Insurer to insurer BACK MENU NEXT

38. Benefits Landscape Lesson Quiz Group Long Term Disability is portable. • True • False BACK MENU NEXT

39. Benefits Landscape Lesson Quiz Typically Group Long Term Disability can have a 3-month, 6-month or 1-year elimination period. _______ months is most common. • 1 • 3 • 6 • None of the above BACK MENU NEXT

40. Employees have more choices in benefit options Allows employers to offer benefit options of qualified benefits on a pre-tax basis Flexible Benefits Plans (Section 125) Benefits Landscape BACK MENU NEXT

41. Flexible Benefits Plan Overview Benefits Landscape Section 105 URM FSA BACK MENU NEXT

42. Communicating the Concept of Pre-taxing Benefits Landscape Decision Maker Script Flex Plan Supplemental Form AmeriflexePOP Online Application BACK MENU NEXT

43. Payroll Taxes Communicating the Concept of Pre-taxing Benefits Landscape BACK MENU NEXT

44. Win for the Employee: Communicating the Concept of Pre-taxing Benefits Landscape +$45.72 BACK MENU NEXT

45. Communicating the Concept of Pre-taxing Benefits Landscape *This is just an example. Savings may vary by state. BACK MENU NEXT

46. Win for the Employer Communicating the Concept of Pre-taxing Benefits Landscape BACK MENU NEXT

47. Benefits Landscape This question has multiple correct answers. Select all that apply. Lesson Quiz What are three distinct advantages to an employer to using a Premium Only Plan? Employees’ taxable income will be reduced, thereby reducing employers’ share of FICA taxes Employers may benefit from employee retention Employers may benefit from expanded employee benefits BACK MENU NEXT

48. Core Benefits Conclusion Benefits Landscape BACK MENU NEXT

49. The Need for Voluntary Benefits Benefits Landscape BACK MENU NEXT

50. The Need for Voluntary Benefits Benefits Landscape BACK MENU NEXT