The Missing Fourth Pillar - Financial Wellness

For most Employers, the financial wellness of their employees is a front and center priority.

The four pillars of an Employer’s financial wellness strategy should include protecting the ability to earn an income when disabled; providing the opportunity to save for retirement; extending an income lifeline to the employee’s beneficiaries in the event of death; and preserving accumulated assets in the event of a long-term care event.

Income Protection (STD/LTD/IDI), 401k, and Life Insurance are commonly offered benefits. These benefits address three pillars of a financial wellness strategy.

A long-term care event is perhaps one of the greatest threats to one’s accumulated assets, and the odds of financial exposure are greater than that of a disability.

Until recently, Employers haven’t had a viable solution for the fourth pillar: asset preservation in the event of a long-term care event.

Benefit and Human Resource Benefit Professionals practicing in the late 1990s will remember the surge in popularity for Group Long-Term Care Benefit programs.  GLTC programs saw its peak as the most popular benefit program between 1996 and 2010, primarily due to favorable tax legislation introduced in 1996 and the ability to secure coverage on a guaranteed issue basis. By 2012, the leading GLTC insurance companies abandoned the new sales of GLTC products, recognizing too late that the product was underpriced, and the risk assumed would be costly.

Today’s asset preservation solution is better than ever.  Known as “Hybrid” products, this innovative benefit combines permanent life insurance, with long-term care protection.  

What is a Hybrid Product?

•  Offers “two-in-one” protection, with bundled Permanent Life Insurance and Long-Term Care Benefits

  •  Permanent Life Insurance provides:

    • Death benefit

    • Cash Accumulation

    • Ability to take a loan against the policy

  • Long-Term Care (LTC) Benefits provides:

    • Accelerated funds from the Life Insurance policy, in the event of a LTC event

    • Benefit can be paid monthly, or via single lump sum

    • Funds are used to pay for care at home or in a skilled facility

    • Limits the need for insured to “tap into savings” or sell assets, to fund costly LTC.

What is Long-Term Care?

• The care required when someone is unable to take care of themselves, due to a loss of 2 or more activities of daily living (ADLs) or if suffering from severe cognitive impairment.

  • ADLs include bathing, dressing, eating, toileting, transferring, continence

  • Severe Cognitive Impairment includes Alzheimer’s, Parkinson’s, dementia, or brain trauma.

  • Care can be provided in a skilled nursing facility, or at one’s home often by a licensed professional

Cost of Long-Term Care (LTC) Services?

• Generally, not paid for by Disability, Medicare, or Health Insurance

• Medicaid only pays once assets are depleted

• Cost for LTC services is expected to double by 2051

• The current cost can exceed $10,000/month in the Northeast

• The average duration of care received is between 3 to 4 years

  • Resulting financial exposure ranges from $360,000 to $480,000

• Only 1/3 of Americans have set aside money to protect themselves should the need arise

• In the absence of LTC Insurance, a claim can quickly deplete assets including savings, retirement accounts, and even the home.

Why a Hybrid Product?

The benefit is a cornerstone to Financial Wellness, by providing 2-in-1 protection. Permanent Life insurance that can be taken into retirement, at the same cost, unlike Group Term Life Insurance. Valuable Long-Term Care coverage helps protect assets, by providing a source of funding the cost of care, rather than depleting savings, retirement accounts, or assets to pay for the cost of care.

Unlike GLTC plans once offered where the insured might not ever receive a benefit after years of paying premium, Hybrid products provide the opportunity to realize a return on investment by either collecting under the Life Insurance’s Death Benefit, or Long-Term Care provision.  Also, unlike GLTC plans once offered, insurance carriers can’t file for state approved rate increases due to claims experience with Hybrid products.

Considering adding a new Hybrid Life/LTC Plan to your Employee Benefits?

• Product design, underwriting offers, and plan pricing are important factors to consider.

• Employee education and appropriate enrollment tools are crucial to the success of the program.

• Most States require the Broker or Consultant meet specific Long-Term Care licensing requirements.

An Intelligent Investment

Employers can different themselves from their competitors, and strengthen their Financial Wellness Program, by adding a Permanent Life Insurance with Long-Term Care Benefit Program.  Asset preservation is an important fourth pillar that, until recently, Employers haven’t had a solution for, since 2010.  

This solution provides the ability for employees to realize a return on investment, by collecting under the life insurance’s death benefit, or the long-term care benefit.  Coverage can be offered on a voluntary/payroll deduct or an employer-paid basis, secured on a guaranteed issue basis, and offered with affordable premiums. The coverage is portable in retirement, at the same premiums. 

Most importantly, the absence of an asset protection pillar can place a substantial financial burden on employees, leaving employees and their families exposed to exorbitant cost of long-term care, and rapid asset depletion. A Hybrid program is an intelligent solution for asset preservation – the fourth pillar of a holistic Financial Wellness approach.  A Hybrid Benefit Program provides valuable Long-Term Care coverage that can help protect assets, by offering a funding source for the cost of care, rather than depleting savings, retirement accounts, or assets to pay for the cost of care.

Trending “Executive” Benefit Alert!

Employer-paid Asset Protection, with Golden Handcuffs

Employers are always looking for new ways to improve their benefit program and retain top talent.

Retaining key employees, leveraging a golden handcuff type benefit, is nothing new. Employer-paid group long-term care (GLTC) programs were a huge hit in the 1990s - 2012, when all the largest providers left the market, and the industry died. Still, nothing new here.

So, what’s different and trending?

Employer-paid Permanent Life Insurance, with a Long-Term Care Rider, and fully paid up within 10 years. Yes, this benefit offering is one of the newest, and hottest, Executive Benefit Programs.

Why?

The employer can identify a class of key-employees, or Executives to exclusively offer the program to. As an employer-paid benefit, coverage can be secured on a true Guarantee Issue basis. Upon issuing coverage, the Permanent Life Insurance provides an instantaneous death benefit, and well as Long-Term Care Protection in the event of a long-term care event. As the employer pays premiums on behalf of the key employees, cash values accumulate. With an Accelerated Payment Option, such as a 10-Pay, the Permanent Life policy’s premium can be fully paid up within 10 years. After 10 years, the key employee(s) have their own fully paid-up permanent life insurance policy with a full death benefit, long-term care protection, and access to their policy’s cash value. The cash value can be leveraged to take loans, against the policy. Or the key employee has the option to surrender the policy and “cash the policy in” for the policy’s cash surrender value.

The 10-Pay, helps the Employer retain top talent. Should the key employee leave before the 10-year period, the Employer has the option to stop funding the policy. Sure, the Executive port coverage with the accumulated values if they leave before the 10 years. However, the key employee would be responsible for paying the higher accelerated option premiums until the plan is fully paid for. The longer the key employee stays with the Employer, the greater the accumulated cash value, and the less premium that remains to be paid.

Permanent Whole Life Insurance, with a LTC Rider, and paid on a 10-Pay basis by the employer, is a resurrection of the old Group LTC plans, but better. These plans offer the guarantee that premium will not increase once fully paid-up, unlike GLTC plans which have seen numerous rate increases. And unlike GLTC where no benefit is realized unless the insured collects for a long-term care loss, Permanent Whole Life with LTC Rider provides the possibility of a benefit for death, long-term care protection, and accumulated cash value.

Navis Benefits Group specializes in designing Employer-paid Permanent Life with Long-Term Care protection programs, on an Accelerated Payment Option basis. Ask how Navis Benefits Group can help you with this trending benefit.

Specialty Benefit Brokers complement the Employee Benefit Broker’s medical insurance expertise.

With over 29 years of experience in specialty benefit solutions, Navis Benefits Group is well positioned to help Employee Benefit Brokers, and their Employers successfully compete for top talent with better benefits.

By focusing only on non-medical benefits, Specialty Benefits brokers are in the best position to partner with Employee Benefit Brokers and Employers on their STD, LTD, Life, Executive Benefits, and Worksite Benefit programs.

Navis Benefits Group partners with Employee Benefit Firms that focus on medical insurance, as their independent outsourced “specialty benefits” firm.  We help them diversify the range of products and services they offer to their clients, without the need to hire an internal specialist to bring intelligent and creative non-medical benefit solutions to their Employer clients.

 Navis Benefits Group helps Employers upgrade their benefit plans to a more state-of-the-art, competitive benefit program by identifying benefit gaps over-looked due to the heavy focus on medical insurance. We benchmark existing STD/LTD/Life, Voluntary Worksite, and Executive benefit plans; and we provide better benefit solutions.

We’ve worked with Employers of all sizes and industries and have helped solve some of the most complex problems.

Reach out to Navis Benefits Group, to see how we can help.

Why Partner with a Specialty Benefits Broker?

Non-Medical Case Study

        I.            Employee Benefit Brokers focus attention heavily on Health Insurance. Why?

a.     One of the highest budgetary items for Employer. It is a “must” priority.

b.      Highest revenue generating product of all employee benefits for Employee Benefit Broker.

      II.            This is problematic for non-health insurance benefits, which are often neglected year after year.

a.      STD/LTD/Life Renewals are often “rubber-stamped” given the smaller budget scale to health insurance, and limited Employee Benefit Broker shelf space.

                                          i.      This has a compounding effect on the cost of these benefits over the year.

b.      Benefits can become stagnant. Result:

                      i.    Ancillary benefit provisions are not modernized enough to meet today’s diverse workforce, do not include new creative benefit provisions, are not in alignment with the market, and are overpriced.

                                          ii.   Specialty Benefits such as Executive Benefits, Voluntary Benefits, and Long-Term Care benefits are last in line; designed poorly; or ignored completely.

     III.            Specialty Benefit Brokers complement the Employee Benefit Broker’s health insurance expertise.

a.      By focusing only on non-medical benefits – Specialty Benefits brokers are in best position to partner with Employee Benefit Brokers and Employers on STD, LTD, Life, Executive Benefits, and Worksite Benefit programs.

Non-Medical Case Study:

Ø The Employer had been with the same Employee Benefits Broker for 20+ years.

o   Employer also with the same Group LTD/Life Insurance company for 20+ years

 o   No rate decreases in at least several years, was a strong indicator to the Specialty Benefit Broker that LTD/Life plans had not been market evaluated.

 o   Antiquated Group LTD and Group Life plan designs were not in alignment with the market.

Ø A competing Employee Benefits Broker with the Employer, partnered with Navis Benefits Group to “test” the ancillary market and provide modernized solutions. Results:

 o   Demonstrated Employer had been paying too much for Group LTD and Group Life - 2x market!

 §  Provided 50% savings with same plan designs from current plans.

 o   Provided alternative plan designs with modernized provisions at 49% savings from current. Stronger benefit provisions with higher net benefits! 

§  Life: Doubled GI face amounts from 2x to 250k, to a 2x to 500k plan.

 §  LTD:

·        Increased benefit maximum from $10,000 to $12,500/month

·        Improved after tax/net benefit from 50.4% to 65%.

 o   Helped Employer fill benefit plan gaps with ancillary savings:

 §  Group STD: replaced fully insured program with enhanced self-insured.

 §  Executive Disability Insurance:

o   Ancillary savings helped fund a Supplemental Disability Insurance plan for highly compensated employees, to address gaps in Group LTD protection.

 § Voluntary Life: Introduced as a new benefit.

Happy Birthday, Navis Benefits Group!

Today we celebrate Navis Benefits Group’s 3rd Birthday!

I am humbled, and beyond grateful for the support and partnerships to make my dream a reality!

I am forever grateful to those Employee Benefit Firms and Employers that chose to partner with Navis Benefits Group and placed their trust and confidence in my young firm.

A very special thanks to my wife Christina, and my three growing boys (Dominic, Brayden, and Desmond), who have been my inspiration and motivation to make this dream a successful reality. Navis Benefits Group is a reflection of you - my precious family - and of your love and support!

After a successful 25-year career working for one of the industry’s best insurance carriers, making the move to start my own firm was a risky, and frightful proposition to say the least. But it was a dream that I had long wanted to pursue.

I am proud to report on this 3rd birthday, that Navis Benefits Group continues to exceed expectations with a blow-out year. We’ve helped Employee Benefit Firms and Employers install successful Employee Engagement Programs, Executive Benefit Plans, Long-Term Care Plans, New Hire Orientation Platforms, Voluntary Benefit Programs, and secure up to 50% saving in ancillary benefit programs. We’ve successfully helped our partners compete against the largest consulting firms in the world, that were over-charging their clients. Navis Benefits Group is in a strong position, and proud to celebrate this milestone achievement with our partners, customers, friends, and family.

I will always hold close to my heart, the support, encouragement, guidance and advice of my former colleagues, business partners, employee benefit consultants, human resource professionals, and friends. And most importantly, my family for taking the leap of faith, and for the sacrifices they made to get things going!

Happy 3rd Birthday, Navis Benefits Group!

With Sincere Thanks and Gratitude,

Jamie Reidy

Managing Partner & Founder

Navis Benefits Group is a “specialty benefits” Firm, focusing exclusively on non-medical employee benefits to include Executive Disability Insurance, Voluntary Supplemental Disability Insurance, Executive Life Insurance, Long Term Care Insurance, Voluntary Worksite Benefits, New Hire Orientation Onboarding, Ancillary Benefits, and Benefits Enrollment/Communication solutions.

Emerging Benefit Trend

Supplemental Disability Insurance sales demonstrated another 15% YOY growth. This includes employer-paid Supplemental Executive Disability Insurance care-outs and Voluntary Supplemental LTD plans.

A primary driver of this sales growth has been the emergence and expansion of Executive Supplemental Disability Insurance (IDI) Centers of Excellence, sometimes referred to as Executive Benefit Practices. This is evidenced by some of the largest national consulting Firms who have built their own internal center of excellence or specialty practice, such as Mercer and AON.

Offering a successful Supplemental or Executive plan requires specialization and attention to detail.

Building a center of excellence is an expensive and risky proposition for mid-size consulting firms. The knowledge and infrastructure required to build a center of excellence does not present the best short-term ROI for mid-size or regionalized consulting firms.

Yet, the benefit is in high demand, provides valuable financial protection to employees, and offers a strong revenue source for the employee benefit consulting firm.

To better compete against the largest consulting firms with established Centers of Excellence, without the risk of a significant investment, employee benefit firms can partner with a third-party Center of Excellence, or Specialty Benefits Firm.

Navis Benefits Group, LLC helps:

• Employee benefit consulting firms bring value to their clients with Supplemental or Executive Disability Insurance plans.

• Better compete against the biggest consulting firms who have built Executive Benefits Centers of Excellence; and

• Provides a minimal risk/high ROI option.

Record Breaking Benefit

It has never been a better time for an Employer to offer a Supplemental Disability Insurance Benefit Plan.

Employers have caught on to the importance of this benefit offering.  

Demand is incredibly high as evidenced by the top insurance carriers demonstrating multiple record-breaking sales years in a row…  in an inflationary market!

Why should Employers offer a Supplemental Disability Insurance Benefit Plan? Simply put, Group LTD alone does not pay an adequate benefit.

 While traditional Group LTD provides a base level of income protection, Group LTD might not meet the unique financial needs of an Employer’s diverse population. Employees that are commission-based, receive bonus compensation, or are highly compensated, may have a sizable portion of their income unprotected.

 Employees struggle during a disability to cover expenses that are important to them because of Group LTD plan design limits and gaps in coverage. With a reduced income, employees still need to:

·        Cover mortgage or rent payments.

·        Pay for childcare.

·        Meet monthly bill obligations such as grocery, clothing, entertainment, or children’s sporting and activity tuitions.

·        Pay non-reimbursed medical bills and out of pocket medical expenses.

·        Continue funding a retirement savings account.

·        Continue college savings for children.

·        Repay student loans or other debt.

 A Supplemental Disability Insurance Benefit Plan is essential to provide strong financial protection levels to a diverse employee population.

Common reasons Employers offer Supplemental Disability Insurance Benefit Plans include:

·        Enhance coverage without increasing risk to Group LTD plan.

o   Protect other forms of income such as bonuses, commissions, deferred compensation.

o   Supplement the Group LTD benefit maximum.

o   Increase replacement percentage to 75%.

·        Provide an Executive Benefit Plan.

·        Provide a new benefit program that is affordable.

·        Offer a plan that is easy to implement and administer.

May is Disability Insurance Awareness Month, and a fantastic opportunity to explore offering a Supplemental Disability Insurance Benefit Plan as a new employee benefit.

Mental Health Awareness meets Disability Insurance Awareness

The month of May highlights two particularly important and related topics when it comes to Employee Benefits: Mental Health Awareness Month, and Disability Insurance Awareness Month.

Rates of depression, anxiety, substance abuse, and burnout have spiked since the pandemic. Employers have made substantial progress raising awareness of the importance of mental health, and enhancing benefits related to mental health. However, many Employers have overlooked updating a key benefit as it relates to mental health and disabilities.

Most mental health benefit offerings focus on preventative care, and education.

Employers are placing more emphasis on work-life balance, flexible working arrangements, and even provide mental health days to their employees as an addition to the overall PTO package. Take a day when you need to for your own mental health benefit! More commonplace benefit offerings provide workers access to mental health providers more easily and discreetly and offer both in person and virtual therapy options.

Where do many Employers fall short?

Preventative benefits are great, but “disabilities happen. In fact, 25% of all working Americans between ages 18-65 will experience a disability for at least 90 days. A leading cause of disability is what the insurance industry categorizes as “mental and nervous” disabilities. This includes disabilities caused by illnesses such as depression, anxiety, bi-polar, schizophrenia, and substance abuse.

Many Employers’ Group Long Term Disability (LTD) and Supplemental Disability Insurance (IDI) plans limit benefit payments for a disability categorized as a “mental and nervous disorder,” to 24 months! This limitation applies only to disabilities categorized as mental and nervous related, unless confined to a facility. No other “type” or cause of disability is subject to a 24-month benefit limitation.

Considering that mental health related claims, including substance abuse, is a top cause - and growing cause of claim, employees are under-protected in a serious time of need. The “disability” does not stop after two years, but the benefit payment will stop unless the insured remains confined to a facility.

With the improvements and options available today for out-patient care, and so many American workers battling to return to work, a 24-month limit to benefit payment “unless confined”, is a restrictive and outdated benefit.

True, the 24-month limitation does provide risk and cost containment for Group LTD plans. It is not a restriction found in other benefits such as health insurance plans; so why should the restriction be in an employer’s Group LTD or Supplemental IDI plan?

Two especially important topics collide in May: Disability Insurance Awareness and Mental Health Awareness Month. It is a great reminder for Benefit Professionals and Employers to consider removing the 24-month limitation from your Group LTD or Supplemental IDI plan. Instead, offer a Full Duration Mental/Nervous Protection feature in your Group LTD and Supplemental IDI plan.

If you need help securing this protection at an affordable cost, Navis Benefits Group can partner with you to help

May is Disability Insurance Awareness Month (DIAM)!

What would you do……if you became disabled?

Most Americans do not have enough savings, to pay their bills and household expenses for over 90 days.  So what?

Your employer provides you with Group Long Term Disability (LTD) protection! Great, you’re all set! Not so fast!!

Group LTD plans provide a basic level of protection. But they often don’t provide enough protection for highly compensated employees, or incentive based employees.  Group LTD plans can leave significant gaps in coverage due to plan benefit maximums, uncovered compensation, and taxation of benefits to name a few reasons.

May is the perfect time for Employers to audit their Group LTD plan.  An income replacement gap analysis, or a stress test, can help identify coverage gaps that may have been long overlooked in the annual renewal process.

Navis Benefits Group, LLC helps Employee Benefit firms, and their Employer clients perform income replacement gap analysis, and stress tests Group LTD plans.  Reach out to Navis for help!

Change your Approach to New Hire Orientation

Employee appreciation, recognition, and retention starts at new hire orientation.  Don’t wait until your Open Enrollment window to begin your work to retain your employees.

By re-thinking your new hire orientation approach, you can have a positive impact on how employees feel about your organization.  A modern-day, new hire benefits orientation experience can establish a long-term, sustainable, and trustworthy relationship with your new employee-hires.

Leverage third-party partners who offer services thoughtfully designed to turn administrative tasks and transactions into high-quality, lasting impressions to make the company’s culture and benefits shine.  These services focus on connecting and onboarding new hires and providing continued support and engagement throughout their tenure. 

Services can be fee-based, or offered through other funding mechanisms, and include:

·       New Hire Orientation:

·       Individual employee onboarding sessions.

·       Introduction to culture and benefits.

·       Support employee benefits education and enrollment.

·       Consistent and clear messaging from employee to employee.

·       Annual Benefits Enrollment:

·       Employee benefit enrollment support on Employer’s Benefit Admin System.

·       Telephonic, virtual, or on-site support.

·       Flexibility in staffing support.

·       Employer messaging.

·       Multi-channel communications: print, video, web, mobile.

§ Customized to Employer’s brand and messaging.

·       Year-Round Service Center

·       Reduces mundane HR tasks and workload.

·       Employee assistance with benefit questions, FAQs, triage.

·       Warm transfers when necessary.

Now is the time to showcase your corporate culture, new benefit offerings, and communicate how you value your employees, beginning with a modernized new-hire orientation process. 

If you are interested in conducting an RFP for modern-day New Hire Orientation options, reach out to Navis Benefits Group.  We can help!

JReidy@NavisBenefitsGroup.com

BENEFIT ALERT!

The top seller of Group Long Term Care through 2012, announced it will seek a 50%+ rate increase on its block of business, nationally.

The carrier will file with each state's Department of Insurance for approval.

GLTC is a tremendous benefit. But navigating and effectively managing a sizable GLTC rate increases requires skill, knowledge of the benefit, and specialization in the GLTC product offering. 

As a top GLTC benefit consultant with Unum for 16 years, Navis Benefits Group can be a valuable resource and partner to Employee Benefit Consultants and Employers.

Ask me how Navis Benefits Group can help navigate this significant rate increase.

Inflation and the 60% Paycheck

The American worker has been financially struggling for a long time. Most Americans, even those earning over $100,000/year, have been living paycheck to paycheck.

With inflation, the struggles are worse and very real.

The full paycheck - 100% of base and bonus - is no longer enough to pay the bills, never mind meeting other financial goals.

If faced with a sickness or accident, most Employer’s Group Long-Term Disability (LTD) Insurance plans only replaces 60% of base salary. Due to LTD plan design limitations, highly compensated employees and Executives might only receive 25-45% replacement, or less. Why?

·       Benefit maximums limit benefit payments.

·       Benefits might be taxable if the Employer pays the premium; and

·       LTD plans do not cover bonus compensation 78% of the time.

The American worker cannot meet financial obligations with only 60% of base pay…. Or less.

To help address and avoid financial devastation during a disability, employers should modernize their long-term disability insurance plan. Employers should consider offering their employees a Disability Insurance plan that provides 75%-80% replacement and protects total compensation.

 Navis Benefits Group, LLC, specializes in Supplemental Long-Term Disability Insurance plans. These plans can protect up to 80% of total compensation for highly compensated employees, and Executives. Employers can offer a Supplemental LTD plan on either an Employer-paid carve-out basis, or an Employee-paid payroll deduct basis.

Happy 2nd Birthday, Navis Benefits Group!!!

Today we celebrate Navis Benefits Group’s 2nd Birthday!

I am thrilled, humbled, and beyond grateful to have seen my long-time dream become a reality, and thrive over these past two years.

Without the support, encouragement, guidance and advice of my former colleagues, business partners, employee benefit consultants, human resource professionals, friends, and my family, I would not have had the courage to pursue my dream two years ago. After a successful 25-year career working for one of the industry’s best, making the move to start my own firm was a risky, and frightful proposition to say the least. But it was a dream that I had long wanted to pursue.

I am proud to report that this 2nd year’s business results significantly exceeded expectations. Navis Benefits Group is in a strong position, and proud to celebrate this milestone achievement with our partners, customers, friends, and family. You have helped make the dream a reality!

I am forever grateful to those Employee Benefit Firms and their Employer clients that chose to partner with Navis Benefits Group and placed their trust and confidence in my young firm.

A very special thanks to my wife Christina, and my three growing boys (Dominic, Brayden, and Desmond), who have been my inspiration and motivation to make this dream a successful reality. You’ve made incredible sacrifices in the past two years, and your support and love has been unwavering. Navis Benefits Group is a reflection of you - my precious family - and of your love and support!

I look forward to the excitement and continued growth this next year - and thank you again for helping to make the dream a successful reality!

Happy 2nd Birthday, Navis Benefits Group!

With Sincere Thanks and Gratitude,

Jamie Reidy

Managing Partner & Founder

Navis Benefits Group is a “specialty benefits” focused Firm, focusing exclusively on non-medical benefits to include Executive Disability Insurance, Voluntary Supplemental Disability Insurance, Executive Life Insurance, Long Term Care Insurance, Voluntary Worksite Benefits, and Benefits Enrollment/Communication solutions. We partner with Employee Benefit Firms as their outsourced specialty benefit consultants.

Missing the Boat?

Are you an Employer that still doesn’t offer Supplemental Disability Insurance (IDI), also known as Supplemental LTD?

You’re missing the boat.

In the employee benefits world, large employers tend to be the “pioneers” and early adopters of new benefit programs and products.  Over 50% of Fortune 500 Companies, 68 of the AM Top 100 Law Firms, and more than 50% of the country’s Top 100 Healthcare Systems offer Supplemental IDI plans, layered on top of their Group LTD plans.

With the strong and continued growing presence of Supplemental IDI plans in the larger employer space, Supplemental IDI is a mainstream and popular benefit program.  

The popularity of Supplemental IDI plans has spread down-market as a well-established benefit offering in mid to small employer space.  In fact, over 70% of new plans purchased cover less than 10 lives!

Supplemental IDI plans can protect up to 75% of income, including bonus compensation. 

Plans can be employer-paid, or voluntary with payroll deduction.  When offered as an employee benefit, IDI coverage is offered on a Guarantee Issue basis, with deep discounts to the premium, making coverage affordable.

Don’t miss the boat! If you’re thinking about adding Supplemental IDI to your benefit portfolio, Navis Benefits Group, LLC can help!

Navis Benefits Group is a specialty benefit firm, partnering with employee benefit consultants and employers, to design, market, install, and administer new, creative, and exciting benefit programs.  We help employee benefit firms focus on what they do best – health insurance – by serving as their outsourced, turn-key specialty benefits partner.

Looking to upgrade and simplify your Open Enrollment experience?

Human Resource Professionals,

It’s no secret that the tight labor market has created a heightened awareness around employee appreciation, recognition, and ultimately retention. 

Re-thinking your Open Enrollment process and implementing new approaches to the way older benefits are enrolled can improve the employees’ benefit enrollment experience, and their feeling towards the employer.

It is more important now than ever before for Employers to showcase new benefit offerings, and better communicate current benefits. Doing so will attract new talent and help retain current valued employees.

Embracing modern technology or digital solutions can help HR Professionals better engage their workforce and reduce time consuming benefits administration tasks.   However, technology should be complemented with face to face or virtual benefit counselor sessions, or a call center, to provide a more human touch to the open enrollment process. 

Human assistance during the Open Enrollment process is a very effective way to introduce a new benefits enrollment/administration platform to your employees.  Benefit counselors can help employees learn to navigate and use a new enrollment platform, while educating and enrolling employees on the benefits program.

Navis Benefits Group helps Employee Benefit Consultants Firms and Employers modernize and simplify the Open Enrollment experience.  We help consolidate complicated Voluntary Worksite Benefits programs, upgrade the voluntary benefits offered, design and implement improved Open Enrollment strategies.

Navis provides expert support during Open Enrollment, and throughout the plan year. Employees receive personalized guidance, education, and help choosing benefits that meet their needs.  Employers maximize their benefit program to help retain and attract talented employees.

Why Physician Groups Purchase Supplemental IDI Programs:

Physicians are extremely intelligent, caring, insightful, and thorough professionals. Understanding why Physician Groups are a top consumer of Supplemental IDI plans can provide valuable insight to Employers in other industries looking to offer a more competitive benefit program.

The healthcare industry includes a high proportion of highly compensated Physicians relative to the other employees in the practice or hospital. This is especially evident in the “specialty” physician groups. Group LTD plan maximums often provide inadequate protection, and only able to cover a portion of a Physicians income.

 Many Physician Groups include “Partners” or Owner Physicians. A personal motivation to secure coverage exists. This is especially true since K-1 income is often not covered by Group LTD plans, which typically covers “base salary or draw” only. IDI plans often cover K-1 income/Total Compensation.

Often, the organization’s structure (Private Practice or Healthcare System) easily allows for Physician and Executive carve-outs – the most common type of Supplemental IDI offering.

Physicians have exposure, experience with, and knowledge of disability insurance, at a young age. For a Medical School to be “accredited”, the school must provide disability insurance to medical students.  Most schools either pay the premium or make coverage mandatory and include the premium as a “line-item” in the tuition. Upon matriculation, it is a common practice on “matriculation day” for the Medical Faculty/Dean to encourage medical students to port the disability coverage, since:

• Coverage is portable.

• Coverage is deeply discounted compared to street rates.

• Coverage was secured at a young age, and very affordable.

• Coverage was secured on a Guarantee Issue basis.

• Matriculating Students generally have significant debt from medical school; therefore, the disability insurance helps protect against default.

• Recognition that, when eventually employed as a Physician, an Employer’s Group LTD plan will not provide enough protection alone.

The contractual features of Supplemental IDI are especially attractive to Physicians:

• Portability: Physicians see value in having potable coverage that they own.  Many Physicians have a base level of coverage which was ported from Medical School or Residency

• Specialty Own Occupation Protection appeals to Physicians with specialties and subspecialties.

• No loss of income is required for Total Disabilities.  This is beneficial to Physicians who have “trailing income” often for several months due to billing/accounts receivable, and/or have K-1 income as owners.

• No offsets at time of claim.  IDI will not offset at time of claim, from other benefits such as SSDI.

• Full Duration Mental/Nervous Protection is available and most often purchased in the Physician segment.  Psychological and Substance Abuse claims are the #1 cause of claims in the Physician segment.

The cost of coverage is very affordable, relative to the volume of protection.

Last, coverage can be secured on a Guarantee Standard Issue basis.

Navis Benefits Group, LLC, specializes in Supplemental Disability Insurance (IDI) programs, with extensive expertise designing programs for Private Physician Groups and Large Healthcare Organizations. Navis Benefits Group, LLC, partners to provide specialty benefits to employer groups looking to offer cutting-edge benefits.

The Modern Long-Term Care Plan:

Ever wonder what a modern long-term care plan looked like?

Group Long-Term Care plans were the hottest and most appreciated benefit program of the 1990s - offered by the most benefit centric Employers. While many of these plans remain grandfathered in place, the GLTC marketplace had collapsed by 2012 with all GLTC companies freezing new business. The culprit? Products were underpriced due to a lack of credible actuarial data for this “new” product, fierce competition, and higher than expected utilization rates. Add to this, an aging workforce, and you have the perfect storm.

New, modern Long-Term Care plans leverage a life insurance base, which is much more predictable from an actuarial standpoint, and provides 2-in-1 benefits (Life and Long-Term Care benefits). These “hybrid” benefit plans are quickly becoming the most sought-after employee benefit in the past 12 months -18 months, and will become, if not already, on every Human Resource Benefits Managers agenda.

What is Driving this Trend?

More than half of all Americans will need long-term care services at some point in life. 

The cost of care in the Northeast, averages $10,000/month in a Nursing Home, with the average duration of care lasting 3.5 years.   The resulting cost of $420,000 on average could be financially devasting to a household, given that health insurance and other forms of insurance generally do not pay for long-term care services.

With the heightened awareness of the financial exposure long-term care services present to their employees, in part due to the widespread exploration of State LTC Payroll Tax Legislation, Employers are quickly offering Modern Day Long-Term Care Insurance.

Modern Day Long-Term Care Plans leverage Universal Life Insurance that includes Long-Term Care Benefits, referred to as “hybrid” Life/LTC Benefits.  The Long-Term Care portion can be used at any time, to help pay for long-term care services at any age. The benefit remains at the same level throughout the employee’s life, so the full amount is always available when needed most.

Plan Overview – What a Modern Plan Might Look Like:

• One Time Guarantee Issue – Employees enrolling during their initial enrollment period and within the guaranteed issue limits can’t be turned down.

•   Universal Life (UL) Insurance – Provides permanent life insurance protection with rates that don’t change as you age and builds cash value.

•   Long-Term Care (LTC) Protection included – Provides a monthly LTC benefit equal to 4% of your death benefit.  Example: a $100,000 UL policy will pay $4,000/monthly LTC benefit for up to 25 months totaling $100,000 in LTC benefits.

•   Extension of Long-Term Care Benefits – This extends long term care benefits up to 25 months, allowing the insured to receive long term care benefits for a total of 50 months.

•   Cash Value – Builds cash value providing a helpful safety net if needed.

•   Death Benefit Restoration included – As the monthly LTC benefit is paid out, the death benefit is restored back to its original value, ensuring your beneficiary receives the full value of the life insurance proceeds.

•   Benefit for Terminal Illness – Use 75% of your death benefit when life expectancy is 24 months or less to help manage costs if you’re diagnosed with a terminal illness.

•   Permanent and Portable – Take this policy with you when you leave employment or retire at the same cost and same benefits.

Introducing a Modern Plan to Your Employees:

 Given the uniqueness, misconceptions, personal preferences, and emotion involved with long-term care, the introduction of the modern plan requires a well-thought-out education and enrollment approach.  This benefit isn’t a basic new term life benefit or dental plan… and therefore shouldn’t be enrolled as such.

 Designing an education centric, personalized enrollment approach with a Partner that specializes in Long-Term Care programs will result in a new benefit offering with high employee satisfaction, and strong participation results. 

Navis Benefits Group specializes in traditional GLTC and Modern LTC Benefit Programs. Let us help you design, educate, install, and administer your current GTLC plan, or install a Modern LTC Plan.

The Long-Term Care Financial Sieve

Did you know?

• Long-Term Care isn’t just about the elderly. About 40% of care recipients are under the age of 65 who have suffered from an accident or illness.

  • Some examples: cancer, stroke, heart-attack, jet-skiing accident, mountain biking accident, or car accident.

• The current cost of long-term care services can easily exceed $10,000/month in the Northeast.

• Care on average is needed for 3 - 4 years, resulting on a financial exposure of $360,000 to $480,000 on average.

• Long-Term Care services are generally not paid for by Disability, Medicare, or Health Insurance

• Almost 70% of Americans turning age 65 can expect to use long-term care services during their lives, but only 1/3 of Americans have set aside money to protect themselves should the need arise.

• Long-Term Care can quickly deplete one’s savings or retirement account, and often bankrupts a household.

• Fortunately, more Employers are offering benefit programs that can protect Employees against financial sieve in the event long-term care services are required. These programs often leverage Life/LTC hybrid products, are affordable, and offered on a Guarantee Issue Basis.

Low-Cost Investment – High Value Benefit for the Most Valued Employees

Chances are some of your clients’ key employees are being courted by competitors right now. It’s a tight labor market, and simply boosting salaries isn’t the answer. Executive Bonus Plans helps your clients retain essential individuals at a relatively low cost and with significant tax benefits.

 
The Advantage for Employers:

• Help attract and retain top talent at a relatively low cost.

• Bonuses given to employees to pay the whole life premium are tax deductible (the policy premium is taxable for the employee).

• Clients may pay a “double bonus” – providing enough money to employees to pay both the premiums and taxes.

• The employer may choose which executives will be given bonuses — and the amount of each bonus.

• There is an income-tax free death benefit for the employee’s beneficiaries.

• The employee retains ownership of policy cash values that grow tax deferred and can be used to supplement income in retirement.

• Unlike a 401(k), there are no Internal Revenue Code contribution limits, and there’s no penalty for early surrenders or loans — provided the policy isn’t classified as a Modified Endowment Contract

• “Golden Handcuffs”: outline the desired vesting period in a written employment contract.

The Benefits for the Most Important Employees:

• Cash value on the whole life policy can be accessed at any time.

• Upon retirement, the employee may use the cash value to supplement retirement.

The Basics of an Executive Bonus Plan:

A basic Executive Bonus plan is very simple. The executive purchases a life insurance policy on his/her life, and the employer pays the premium (with the “bonus”). The employer gets to deduct the bonus, and the employee pays the taxes on the bonus. The employee enjoys the full policy cash value and death benefit. In some cases, the employer even pays the taxes for the employee (through what is called a “double bonus”).
 

Navis Benefits Group, LLC, can help you design specialty benefit programs for your clients.

Trending Benefit: Life Insurance with Long-Term Care Coverage

The Trend:

Larger employers, with employees in multiple states are quickly adding Life Insurance with Long-Term Care coverage to their employee benefit programs.

Why?

The benefit is a cornerstone to financial wellness, by providing “2 in 1 Protection” with:

•        Permanent Life insurance which provides permanent coverage which can be taken into retirement, at the same cost as when working, unlike Term Life Insurance

•        Provides valuable Long-Term Care coverage that can help protect assets, by providing a source of funding the cost of care, rather than depleting savings, retirement account, or assets to pay for the cost of care.

Over 26 states are considering, or have enacted, a Long-Term Care payroll tax.  Washington State was the first to enact.  Washington State provides a payroll tax exemption to those that own Long-Term Care coverage, including Life with Long-Term Care products, prior to November 1, 2021. This opt-out provision was for a limited time and is no longer available.

It is believed that most states will allow similar exemptions to the LTC payroll tax, provided that the Long-Term Care coverage is in place prior to the state enacting the payroll tax legislation.

Did you know?

•        The cost for Long-Term Care services is expected to more than double by 2051. 

•        The current cost of care can easily exceed $10,000/month in the Northeast.

•        Care on average is needed for 3 – 4 years, resulting on a financial exposure of $360,000 to $480,000 on average.

•        Long-Term Care services are generally not paid for by Disability, Medicare, or Health Insurance

•        Almost 70% of Americans turning age 65 can expect to use long-term care services during their lives, but only 1/3 of Americans have set aside money to protect themselves should the need arise.

Considering adding Life Insurance with Long-Term Care coverage to your Employee Benefit Offering?

Product design, underwriting offer, and plan pricing are important factors to consider. Employee education and appropriate long-term care enrollment tools are crucial to the success of the program.

Most States require the Broker or Consultant meet specific Long-Term Care licensing requirements.

Navis Benefits Group, LLC offers over 26 years of Long-Term Care, and Voluntary Benefits expertise.