GNYADA Insurance Brokerage Brief - Summer 2017

SUMMER 20 1 7

No-Cost Supplemental Plans Enhance Your Employee Benefits Package

Hospital indemnity insurance plans pay cash for covered hospital stays, with optional benefits for diagnostic procedures, surgery, ambulance transportation, etc. Even if an employee has excellent medical insurance, that insurance probably won’t be enough to pay all expenses associated with a hospital stay. Term life insurance offers workers an economical option for providing peace of mind for themselves and their families. These plans can protect loved ones from unpaid debts, secure children’s education, and ensure financial stability in the event of death. 10-year, 20-year, and 30-year term policies available. Supplemental plans help employees prepare for medical events that can create a financial burden to their family. (Benefits are paid directly to the insured, regardless of any other insurance.) Contact the GNYADA Insurance Brokerage for more information.

The cost of providing workers with comprehensive health insurance often becomes difficult for employers to manage. To control costs, many employers offer plans with higher deductibles, copayments and coinsurance. However, these plans raise out-of- pocket costs for employees who may need to keep their healthcare costs low. Voluntary supplemental benefits can help manage healthcare costs in a number of ways. Employees can purchase them on a pretax basis and pay for them through payroll deduction, meaning employers can offer them at no cost to the company. Examples of supplemental plans: Critical illness plans cover incidents such as heart disease, stroke, cancer and kidney disease, and can offer lump sum benefits upon diagnosis and/or specific payments for treatments like radiation, physical therapy, rehabilitation, etc. Short-termdisability insurance has tremendous value.There is a 1-in-3 chance that an employee will suffer some form of disabling illness or injury, or undergo a surgery that could sideline them for three months or more. Many employees have concerns about paying their bills if they were out of work this length of time, making short-term disability insurance an attractive option. Accident insurance is another valuable benefit. Costs associated with an accident could include: emergency room treatment, hospital admission, x-rays, etc.

The Association thanks Benefits Consultant, Sharon Davis, for contributing to this article.

Helping Workers Offset Healthcare Costs Can Benefit Dealerships

HRAs are strictly employer-funded. They can be used to reimburse the same expenses as a health FSA, or they can be restricted to only reimburse specific items, like prescriptions. HRAs are also more flexible; many employers use them to help complement their group’s medical plan. For instance, some employers who offer a high deductible health plan may also implement an HRA that reimburses some or all of the deductible. Since high deductible plans are typically lower in premium, compared to traditional health plans, they can be more appealing to some employees; however, the deductible can be a burdensome expense for enrollees. Absorbing some of that cost through an HRA allows an employer to reduce the financial impact employees potentially face. Employer contributions to an HRA are tax-deductible, helping reduce company costs while providing an enhanced benefit to employees. If you are considering these FSA or HSA plans, the GNYADA Insurance Brokerage can connect you with Third Party Administrators (TPAs) who provide these programs for dealerships.

As costs increase, dealerships can make themselves more attractive as employers by offering insurance plans that can offset those expenses. Flexible Spending Accounts (FSAs) and Health Reimbursement healthcare

Arrangements (HRAs) are two options that can be included in employee benefits packages, and both can represent savings for the employee and the employer. FSAs —also known as Section 125 plans—allow employees to set aside pretax money to cover many out-of-pocket medical, dental, vision and dependent daycare expenses. Each type of FSA that employees can enroll in, including Medical Expense and Health Premium FSAs, are governed by IRS guidelines. Employees generally save an average of 30% on medical expenses by using this pretax account, and employers receive the matching FICA savings.

GNYADA thanks Kathryn Alfaro and John Puglisi from the P & A Group for contributing to this article.


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