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Voluntary Benefits Is It Really A Choice?. Presented by: David Brandies, President T otal P ackage P artners, I nc. A Benefits and Compensation Consulting and Brokerage Organization. Voluntary Benefits Is It Really A Choice? . Agenda Brief Introduction
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Voluntary Benefits Is It Really A Choice? Presented by: David Brandies, President Total Package Partners, Inc. A Benefits and Compensation Consulting and Brokerage Organization
Voluntary BenefitsIs It Really A Choice? Agenda • Brief Introduction • Overview of Voluntary Benefits/review PEBA Survey results • Supplemental Disability Plans • Long Term Care Voluntary Benefits
Voluntary BenefitsIs It Really A Choice? Why do voluntary plans continue to be a hot trend in employee benefits? • Enhances a company’s core benefit package with little or no employer cost • Typically paid by the employee • Offers some features not found in group plans • Most of the administrative work is done by the broker or carrier
Voluntary Benefit Survey • Distributed through PEBA during April and May 2005 • Participating Companies-Approx. 50
Voluntary Benefits SurveySize of Participating Companies • Ranges from 7 employees to 66,000 employees • Average size—7,300 employees • Median size– 4,000 employees
Voluntary Benefits SurveySurvey Participant’s Compensation Structure Base Salary Only—64% Base Salary/Small Bonus—21% Base Salary/Larger Bonus—15% 6
Supplemental Long Term Disability Insurance What is it? • Plan that allows the employee to cover compensation that the Group LTD plan does not. • Covers salary in excess of group plan caps, bonuses and commissions. • Underwritten with individual, portable contracts. Disability
Supplemental Short Term Disability Insurance • What is it? • Voluntary version of a company sponsored plan • Either group or individual based • Supplement State programs or low capped group plans. Disability
Long Term Care Insurance • What is it? • Pays for costs associated with care in a nursing home, assisted living facility, or in your own home. • Group discount on rates • Group is underwritten as a whole • Employees and extended family members are eligible.
Supplemental Life Insurance • What is it? • Permanent insurance that generate cash value • Usually offered with term insurance • Portable and often carried into retirement • Has replaced company paid life insurance at some companies
Critical Illness Insurance • What is it? • Provide financial protection in the event of a sudden, life threatening event • Pays in addition to medical coverage • Can often purchase benefit amounts between $5,000 and $50,000 Critical Illness
Supplemental Accident Insurance • What is it? • Provides financial protection in the event of a wide range of injuries and accident-related expenses including hospitalization, physical therapy, transportation, lodging. • Usually covers accidental death and catastrophic accidents. • Designed to help pay for out-of-pocket costs that are not covered by traditional health insurance.
Group Automobile/Homeowners Insurance • What is it? • Offered to all employees at discounted rates • Premiums are payroll deducted • Umbrella liability protection also available • Better service 18
Vision Plans • What is it? • Provides discounted rates for basic eye care needs • Convenient payroll deductions • Large network of providers
Survey Conclusions • Average percent of companies providing voluntary benefits—33% • Most commonly provided benefit - Vision. • Least commonly provided benefit – Critical Illness.
Summary Conclusions • Average employee participation in Voluntary Benefit plans—33% • Highest participation— Vision plans • Lowest participation-- Critical Illness plans
Survey Conclusions • Most commonly offered to full and part-time employees • Typically paid entirely by employees • More comprehensive communications yield higher participation. • Stronger HR support also yields higher participation.
Conclusions Voluntary Benefits Is It Really A Choice? You Decide 18
