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July 24, 2011 at 08:00 PM
An unappreciated cygnet grows up around condescending ducklings feeling inadequate and inferior. The self-absorbed ducklings strut haughtily along, smug in their ignorance until the swan matures and they find themselves outclassed.
Sounds just like the plot of a classic fable, right? As it turns out, this might also describe the attitude of far too many traditional financial services professionals toward voluntary benefits.
As I began working with businesses, I made it a point to start gaining knowledge about worksite benefits. One of my first observations was that many traditional agents don’t think very highly of supplemental benefits. They see money spent on these products as wasted and diverting funds from more “important” ones, such as life insurance, disability or retirement accounts. They don’t appreciate what supplemental benefits offered employers or their employees.
For starters, increasing costs are challenging employers with the dilemma of how to offer more on their human resources benefit palette without running costs through the ceiling. Voluntary benefits provide an avenue to do this and, in fact, can actually lower payroll taxes paid by the business.
There are several carriers that will assist businesses in establishing Section 125 Cafeteria plans at no cost. With premium-only plans there is generally no monthly out-of-pocket admin cost to run the plans. I sum it up for business owners by explaining there are no set-up fees, there are no monthly operating fees and employees use pre-tax dollars to pay for most of the supplemental products. This can save the business payroll taxes on all pre-tax premiums voluntarily paid by the employees. This lowers costs for the employer and adds benefits for employees.
Carriers now have a wide variety of products to offer employees. Disability, life insurance (both permanent and term), cancer, accident, hospital, critical illness, dental and vision, are common. These are normally individually owned policies that can be taken with the employee if they leave the firm, while keeping the same low, discounted rate. Family members can often be included when an employee elects coverage.
