Millennials and Life Insurance?

Many younger people do not consider life insurance at the top of their list of priorities, but could life insurance options be worth the investment for a healthy millennial? Many millennials are coming into the workforce with large amounts of student debt and are delaying traditional adult activity like getting married, having children, or owning a house so life insurance could be the last thing on their mind. While life insurance may not be a huge benefit for all millennials, other young workers could have good reason for purchasing life insurance. In fact, per the LIMRA and Life Happens 2016 Insurance Barometer report, half of millennials have life insurance – whether their own policy, one through an employer, or both. So, what are some of the reasons a young, healthy individual could have for engaging in this insurance policy?

Cheaper rates: Life insurance policies will get more expensive as an individual gets older. Someone in their mid-20s can get a six-figure term policy for just a few hundred dollars a year, whereas that same policy could cost a senior citizen thousands more. Different policies will cost different amounts and a quick overview of your options can help you pick the right plan and secure the best rates.

Protects family from debt: As mentioned earlier, most of today’s college graduates are dealing with huge amounts of debt. If something happens to the employee who owes all that debt and their parents were included as financial cosigners, then the parents would be responsible for the outstanding balances.

Income support: If anyone depends on you financially, you really want to have life insurance. In the case of an unexpected death, your dependents will have a source of money to live off of.

Employees young and old should take the time to review their options for life insurance. Companies can benefit by offering their employees access to these voluntary benefits and can use these policies as a way to attract top talent and keep them invested in their company.

Life Insurance: A Quick Overview of Your Options

Many people dismiss life insurance because it is not something they really want to be thinking about. Additionally, they do not fully understand how the coverage works or all of their coverage options, so they may feel their money is being misplaced towards something that is not necessary. The bottom line is, if you have people who depend on your financial support, then it’s important to educate yourself on life insurance options before making a decision.

Term: This is typically the option that is easiest to understand and comes at the lowest cost. This is the only coverage where you buy for a specific period of time, with permanent options available through whole, universal, and variable life insurance. Policies for the term can vary anywhere between 1-30 years with the common term around 20 years. These policies can be renewed, but the premiums will increase based on age and health factors.

Permanent life insurance options listed below provide an opportunity for savings, as they build cash value that can grow tax-free.

Whole Life: Hence the name, the whole life insurance policy would be purchased to cover you for your entire life if the premiums continue to be paid. Your premiums will remain constant and the company will invest a portion of your premium that becomes cash value. The premiums here will be higher in the earlier years compared to term life insurance, but it will even out because the premiums will not increase over time.

Universal Life: This is another type of permanent coverage option similar to whole life insurance, but with a little more flexibility. You have the opportunity to change the amount and frequency of premium payments or pay a specified amount in a lump sum. Your potential earnings on savings is higher with universal life where funds can grow tax-deferred and there is usually a guaranteed return on the cash value. However, this coverage generally has higher fees and premiums could increase.

Variable Life: Lastly, variable life insurance is another permanent coverage where you have control over the investment decisions for the cash value portion. With this policy, you will generally have fixed premiums, but this could be riskier because no cash value is guaranteed on your investments.

While life insurance is not something we want to be thinking about right now, it could be a smart decision moving forward to help protect your family’s financial wellbeing. Rates are more affordable for younger, healthier individuals and you can begin with tax-free savings potential through a permanent coverage option. If you’d like more clarification on any life insurance policy or a quote, please Contact Us.

DOL’s Federal Overtime Rule Blocked

The Department of Labor’s (DOL) new overtime rule was set to take effect on December 1, 2016. Employers were given more than six months to prepare for the rule that would have increased the salary threshold for the “white collar overtime exemptions” to $47,476 a year. Instead, on November 22, 2016 a federal judge issued a preliminary injunction, blocking the new rule until further notice.

What the Overtime Rule would have provided:

  • A salary threshold increasing eligibility from $455/week to $913/week
  • An automatic update of the salary threshold every 3 years, based on wage growth over time
  • Strengthened overtime protections for salaried workers already entitled to overtime
  • More clarity for workers and employers

How employers needed to adjust for the change:

  • Pay time and a half for overtime work
  • Raise workers’ salaries above the new threshold
  • Limit workers’ hours to 40/week

Next steps after the block?

The initial proposal came from President Obama in 2014 to update the overtime regulations to reflect and modernize the rules for the Fair Labor Standards Act (FLSA). It is yet to be seen what actions President elect Trump will take to change or block the overtime rule.

Employers can rely on the existing overtime exemption rules until a decision is reached, but should remain watchful for new developments related to the rule. We will continue to monitor these developments and provide information and updates.

How Important is Open Enrollment Education?

Survey says…. Most employees don’t understand benefits very well! In a new report by the Guardian Life Insurance Company of America, 80% of Americans believe they understand their benefits very well, but only about half demonstrate they do based upon what Guardian deems to be optimal benefits-related decisions. In fact, in a benefits coverage and terminology quiz, the average score was a 72, with 1 in 5 people receiving an “F” grade.

Most employees typically look at what they know – the generalities like premiums, co-pays, and deductibles. However, failure to do the proper research may leave employees exposed in the case of an emergency. Many times, options like GAP plans or HSA plans could work well for employees to help save, but they are not familiar with the coverage and become hesitant to participate.

These numbers found in the report are concerning because the lack of benefits understanding could be hurting employees in the long run, especially with healthcare costs continuing to rise. Educating employees thoroughly during the open enrollment process can help eliminate some of the major concerns regarding financial risk, and any complexities within certain plans.

Guardian’s study went on to find that only 47% of working Americans feel their employer is doing a good job educating them about how to use their benefits – a drop from 66% in 2014. So, what can you do to create a better open enrollment experience?

  • Provide ample time – Give your employees proper notice and reminders about any upcoming changes and when the open enrollment period will be. Allow for at least two weeks to give your employees plenty of time to review their options and ask questions where necessary.
  • Use friendly language – Insurance lingo can be confusing to people outside of the industry. Try to break down complex language into layman’s terms to give your employees the ability to fully understand each benefit. Explain any terminology to them they may not understand!
  • Provide expert guidance – Have an HR professional available to provide guidance to employees or answer any questions they may have, basic or complex. Everyone is different and guidance can change based on circumstances. If you do not have someone experienced on staff, contact your insurance broker who can provide you with advice and educational materials.
  • Introduce new benefits throughout the year – Consider explaining voluntary benefits throughout the year like life insurance, individual disability insurance, critical illness, or other supplemental health insurance. If given all this information at once, it could be more difficult for employees to grasp.

At Faison Group, we are always happy to help answer any open enrollment questions you may have and review your options for the upcoming year. We have educational material on nearly every benefit you can imagine and can provide these to you upon request!

What Does the Election Mean for the ACA?

The two candidates had differing views on a variety of issues including health care reform leading up to election day. On November 8, Donald Trump was elected the 45 th president of the United States and will be inaugurated on January 20, 2017. So, what do the election results mean for the Affordable Care Act (ACA) and compliance moving forward? Throughout Trump’s campaign he has called for a repeal of Obama’s healthcare reform legislation. Trump’s victory combined with Republican majorities retained in both the Senate and the House of Representatives could have a major impact on compliance issues in the coming years.

What to Expect

Employers should continue to prepare for the upcoming requirements and deadlines as they have been prior to the election. Although Trump has been elected, he will not take office until late January and thus no major legislative or regulatory changes are likely to take place prior to 2017.

The Future

While it is unclear exactly what changes will be made to the ACA over the next four years or when these changes will occur, in the past Republicans have suggested:

  • Repeal of the ACA, with or without a potential replacement health care reform legislation
  • Partial repeal of key provisions (such as the individual and employer mandates)
  • Changes to the Medicare and Medicaid programs
  • New policies intended to expand coverage and lower health care costs

Again, it is important to note that the newly elected officials will not take office until early 2017, so employers that provide group health coverage must continue to prepare for the upcoming ACA deadlines .

Uncertainty

While Trump’s campaign called for a repeal of the ACA, he recently told the Wall Street Journal that he would consider keeping some parts, specifically the guarantee of coverage for those with pre-existing conditions and allowing young adults to remain on parents’ plans through age 26. After meeting with President Obama, Trump stated, “I told him I will look at his suggestions, and out of respect, I will do that. Either Obamacare will be amended, or repealed and replaced.”

Uncertainty looms after the election and keeping up with compliance is always a tough task for HR professionals. If you have questions on how to prepare for open enrollment this year or what you can do to remain compliant, feel free to Contact Us!

Choosing the right PEO

A professional employer organization (PEO) can help your company handle all of its human resources and could be the boost your company needs . If you’re seriously considering partnering with a PEO to help with everything from compliance to benefits, a little research can go a long way. Here are a few things you should look at when determining which PEO to partner with:

Costs

PEOs can be great for small to medium sized businesses because they allow businesses to get much needed assistance on complicated human resources tasks and focus their efforts on the growth and profitability of their business instead. Of course, this only works if the PEO is affordable. Before digging deep into costs, it’s important to know how the pricing structure works. PEOs typically charge two different ways, often a percentage of total salaries (3-8%) or as a flat per-employee-per-year fee. When reviewing costs, determine which structure works best for your company and compare PEOs based upon the services they provide and the fees associated with these services.

Integration

A PEO is not meant to replace your HR department, but to serve as an extension of your business. Thus, finding a service that integrates well with your current processes can be a determining factor in the selection process. If your process is not refined, PEOs can provide consistent administration and often times improved technology resources. When picking a PEO, you should ask about the technology they offer and whether or not they will continue using programs that you have already purchased.

Service

Get a feel for the type of service and level of service that each PEO will provide to you. Some PEO arrangements will have a dedicated service team that you can contact and speak with over time whereas others may charge extra to speak to a live representative or use call centers to answer questions.

Additional services like training can also be available under certain PEOs. These services can be very valuable to smaller organizations because they provide great opportunity for professional development and ability to maximize the current workforce.

Other notable considerations

  • Expertise & experience – Determine the level of expertise within the internal staff. The PEO will be handling important documents and services, so a good understanding of your industry along with your geographic area would provide a big benefit.
  • Tailored benefits – Does the PEO fit the needs of your employees? It’s a good idea to speak with your employees before selecting a service and determining what their needs are, as these needs can vary.
  • References – Professional references are always reassuring. Speaking with clients who have had success with the services you will adopt allows you to determine if the service will be right for you.

Ultimately, many factors should be considered before jumping into an agreement with a PEO and this is not a decision that should be taken lightly. To determine if a PEO is right for your company, or for help in electing the service that best fits your company’s needs, Contact Us !

Webinar: Telemedicine – Easy Extension of Health Insurance

New technologies have allowed doctors to find more ways to efficiently and conveniently care for their patients. Telemedicine allows patients and doctors to communicate through a live video, audio, or patient data transfer system without ever having to be in the same physical space.

Employers can provide telemedicine as an extension of their health insurance to allow employees to use these services and provide convenient care – anywhere. Both employers and employees can benefit from these services as can be seen below, and a more detailed explanation of these benefits will be described in the webinar.

Did you know?

An estimated 70% of non-emergent medical conditions can be addressed telephonically or via email, making 1-800MD’s physician access services one of the most cost-effective and convenient ways for employees to seek medical care.

In this webinar you’ll learn:

  • The benefits of telemedicine for employers
    • Lower health care costs
    • Reduced employee absenteeism
    • Enhanced productivity
  • The benefits of telemedicine for employees
    • Convenience
    • Cost savings
    • Quality care

Date and Time

Wednesday November 02, 2016 at 2:00 PM (EST)

Who Should Attend?

Human Resources professionals, benefits specialists, CFO’s, CEO’s, and anyone interested in learning more about how telemedicine can create convenient, quality care that ultimately benefits both employers and employees.

reserve your seat for webinar button

Is a PEO the Boost your Company Needs?

Handling all of your human resources (HR) needs, including payroll and administration, employee health and retirement benefits, workers’ compensation insurance, and compliance issues in an ever-changing environment can be a tall task for small businesses. A professional employer organization (PEO) can not only help you tackle these tasks, but provide savings on group health insurance and benefit plans for your employees. Unlike other outsourced HR tasks which typically handle one or two services, a PEO can provide your company with the bulk of key services needed. Listed below are some of the things a PEO can do for your business and the advantages associated with these services.

Payroll Administration

A PEO will take over payroll administration and take responsibility for:

  • Payroll
  • Employee taxes
  • Quarterly reports
  • Worker’s compensation insurance
  • Premium audits
  • Claims management
  • Benefits procurement

Affordable Health Insurance & Benefits

Employees under PEO services can get access to a wider range of services at a much better price. This is possible because the employees are essentially hired under the PEO rather than the company they work for. This allows the PEO to pool all of its employees into one larger group and negotiate lower rates and lower annual rate increases.

Compliance

Ensuring your company is compliant with all employer-related state and federal laws is important, as fines for compliance failure can be hefty and reputation damaging. A key advantage in hiring a PEO is that employers do not have to handle as many complex legal HR tasks, and the PEO will ensure that its clients are knowledgeable on standards at the local, state, and federal levels.

Training

A PEO is not set out to replace your internal HR staff, but to align with your existing staff and ease the administration of HR tasks. A good PEO will have an experienced, knowledgeable staff that can provide assistance and guidance in complex HR situations. Some PEOs may provide liability awareness training or employee engagement initiatives.

Focus on Core Competencies

For companies who have been struggling to meet their human resources needs, a PEO can be the perfect opportunity to alleviate a lot of the time and resources being spent towards resolving these issues. This will allow for companies to focus on the tasks they are truly good at and provide more value to them, ultimately increasing profits and growth.

Important Open Enrollment Deadlines

For small businesses that are currently not offering health insurance coverage to employees, there are some important dates to mark your calendars with in the upcoming months. With the Affordable Care Act (ACA) guidelines changing each year, it is important to keep up with compliance and reach these dates and deadlines for the 2017 open enrollment period. Important deadlines are:

November 1, 2016 – The first day of open enrollment for enrolling, renewing, or making changes to a 2017 insurance plan through the ACA marketplace.

December 15, 2017 – Last day to enroll in or change coverage for January 2017.

January 1, 2017 – 2017 coverage starts for those who enrolled or changed plans by the December 15, 2017 deadline.

January 31, 2017 – Last day to enroll in or change 2017 health plans. Anything after this date can only be changed if it qualifies for a special enrollment period.

Open enrollment can be a great time to help out your employees and strengthen your employee benefits package. Consulting a broker during this time to review the upcoming open enrollment and discuss insurance plans could be valuable to help further your understanding of providing health insurance as a small business. Alternatively, even if your small business opts not to provide insurance as part of your package, there are things you can do like setting up a reimbursement plan to give employees tax free allowance for health insurance premiums.

As a small business it is important to keep in mind that while in 2015 businesses needed to insure 70 percent of their full-time workers, for 2017 reporting, businesses with 50 or more employees must insure at least 95 percent of employees to avoid compliance fines. For help with ACA compliance or to discuss health insurance options for your small business, feel free to Contact Us or checkout our ACA compliance checklist .

Is an HSA right for you?

There are many variables that can affect the way you choose your health coverage, including your understanding of the options presented to you. Health savings accounts (HSA) are gaining popularity in health care as a cost-effective option for many people. However, each individual and family has their own needs and wants, so an HSA may not be right for everyone. A quick look at the pros and cons of these health plan options can help determine what works best for you.

HSA Advantages

  • Saves Money – For individuals who are generally healthy and have a good estimate of their annual health care expenses, money can be saved when paired with a high deductible health plan, which results in lower premiums. Ultimately, less money is coming out of your paycheck.
  • Transferrable – Even if you are terminated from your job or leave the position, you can keep your HSA through a change in jobs.
  • Tax Savings – When you contribute to your HSA account, you can experience triple tax benefits. You put money in tax free, you can withdraw it tax free for qualified medical expenses, and unspent dollars roll over each year making retirement savings possible.
  • Money doesn’t go to waste – Unspent funds don’t go to down the drain. Money is rolled over into the next year, helping with flexibility in your accounts as well.

HSA Disadvantages

  • Unpredictability – Even for healthy individuals, illness can come unexpectedly. This can make budgeting for the year difficult, and result in high out-of-pocket costs if a large medical expense comes your way.
  • Hesitant to Spend – Because HSAs can provide valuable tax advantages, many people may become hesitant to spend when there is a potential savings opportunity. This can result in people justifying skipping doctor’s visits or in getting the care they need as they want to avoid pulling from the account.
  • Penalties – If money is taken out of the account for something other than a qualified medical expense before the age of 65, you will owe taxes along with a 20% penalty. After the age of 65, you will owe taxes, but no penalty will be charged.

Ultimately, the final decision will vary for each individual and family. If you are healthy and have a general idea of your annual health expenses, the tax savings and other advantages could provide you with valuable benefits. On the other hand, older individuals who are more prone to illnesses or unexpected conditions could find a traditional plan more beneficial than going out on a limb attempting to budget for the year. At Faison Group, we would love to help you determine if an HSA is right for you or your employees, and we are glad to help you gain a better understanding of how they work. Feel free to Contact Us with any questions!