group term life insurance ad&d disability income insurance dental insurance
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GAHU Group Insurance 101. Group Term Life Insurance AD&D Disability Income Insurance Dental Insurance Voluntary Disability, Life and Dental Presented by: Todd Boyd, MBA – Atlanta Sales Manager Venessa Collins- Dental Network Manager Assurant Employee Benefits May 24, 2006. - PowerPoint PPT PresentationTRANSCRIPT
Group Term Life Insurance AD&D
Disability Income Insurance
Dental Insurance
Voluntary Disability, Life and Dental
Presented by: Todd Boyd, MBA – Atlanta Sales Manager
Venessa Collins- Dental Network Manager
Assurant Employee Benefits
May 24, 2006
GAHU Group Insurance 101
The information provided in this presentation are examples of
options available in the industry. Plan designs and options vary by
carrier.
GROUP TERM LIFE AND
ACCIDENTAL DEATH AND DISMEMBERMENT
(AD & D)
Schedules
Times earnings plan1x or 2x earnings most common
Flat Amount plan $10,000, $25,000, $50,000 most common
Maximums range from $150,000 - $ 500,000Can vary by classes of employee within groups,
e.g. Officers and Managers receive 2x earnings to a max of $ 200,000, and all other employees receive a flat $25,000.
Non-Contributory GroupsContributory GroupsGI amounts may vary for employees
older than age 70
Non-medical maximum limits
Participation Requirements
Contributory (Partially Employee Paid) Coverages Usually 75% or higher - many
states require at least 75%
Non-contributory (Employer Paid) Coverages 100% participation required
Beneficiaries
Employee can name anyone as a beneficiary, other than the employer
If a beneficiary is not designated by employee, proceeds may be payable at the insurer’s option to surviving relatives, or to the executor or administrator of the deceased’s estate.
Limitations and Exclusions
Life Policies and AD & D policies may have separate sets of limitations and exclusions
Common items not payable: Suicide - for contributory plans War Commission of a felony Death resulting from intoxication or
unprescribed drug use
Waiver of Premium
Many carriers will waive the premium for the group term life insurance if an insured is disabled from any gainful occupation - some offer an own occupation definition as well
Duration of disability waiver can vary, from 1 or 3 years, to age 65.
Can also be integrated with LTD coverage - waiver automatically approved if approved for LTD benefits (with same carrier)
Provides an additional benefit if the death results from an injury within a particular time frame - usually 180 days to 1 year.
Benefit is normally the same as the life insurance benefit - allowing for a double payment if the death occurs from an injury
Accidental Death & Dismemberment
Automobile Accident rider (Seat Belt required)
Higher Education benefitRepatriationTravel Assistance
AD & D Additional Benefits
Supplemental Life (Optional Life) Employee is able to purchase amount
over and above coverage provided by employer
Stand Alone Voluntary Coverage Optional coverage purchased by
employee Employer provides opportunity to
purchase and plan administration
Employee Paid Plan Options
Additional Options
Survivor Financial CounselingAccelerated Death BenefitConversionInterest bearing account for benefit
proceedsWaiver of premium on AD & D
LONG-TERM DISABILITY
A 30-year-old female has a 56.6% chance of becoming disabled before age 65 compared to only a 16.2% chance of dying.
Guardian Life Study, quoted in Disability Income Insurance, Conning and Company Report, 2002
Probability of Disability
1 in 7 people will become disabled for five years or more before they reach age 651
1 in 88 people will use homeowners insurance1
1 in 47 people will use auto insurance1
18.7% of the working-age population (age 18-64) report a disability2
Probability of Disability
1Disability Management Source Book, 199922000 Bureau of Labor Statistics
Definitions of Disability
“OR” Dual Definition Occupation Test Earnings Test
“AND/Maximum Capacity” Definition
Definitions of Disability (cont.)
Occupation Test Material Duties Own Occupation Any Gainful Occupation Regular Job Definition
Earnings Test Flat amount, i.e. 7.5% Lesser of flat amount or CPI-W (10% or
3%)
Waiting Period
Time period claimant must be disabled before they are eligible to receive benefits
Other names are: elimination period, qualifying period
Common waiting periods are: 1 month 90 days 180 days
Benefit Schedules
Benefit Rates (% of pre-disability earnings) 50% 60% (most common) 66 2/3% 70% (very rare)
Benefit Maximums $ 6,000 $ 5,000 $ 10,000
Maximum Benefit Duration
To SSNRA (Social Security Normal Retirement Age)
To Age 655 year 2 year
Pre-Existing Condition Limitation
3/12 or 6/24“prudent person” languagetreatment-free period - 3/3/12 or
6/6/24
Indexing of Earnings Test
7.5%Lesser of 10% or CPI-WLesser of 3% or CPI-WNo Indexing
Return-to-Work Earnings
100% return-to-work offset (usually for 12 months)
Indexed benefit - adjusted loss of salary ratio calculation
50% direct offset 70% indirect or All Sources offset
Offset with Social Security
Full Family DirectFull Family Monthly Payment LimitPrimary Direct OnlyPrimary + 1/2 Dependent
Value Options
Cost of living adjustmentActivities of daily living benefitRetirement savings benefit or
pension supplementMedical premium payment
supplementCritical illness Employee Assistance Program
Cost Containment Features
Managed rehabilitation programLimitations for certain diagnoses,
ex. certain mental impairments, conditions with extremely subjective symptoms, etc.
SHORT-TERM DISABILITY
Why offer Short Term Disability?
Provide income for employees suffering short duration illnesses or injuries to recover and return to work with the policyholder
Can increase employee satisfactionAssist in retaining valuable
employees
Salary continuation (sick leave) plans
Self insured with advice to pay services
Fully insuredNon-occupational only, or integrated
with worker’s comp
Types of STD Plans
Benefit Schedules
Benefit rates 50% 60% 66 2/3%
Benefit maximums (weekly) $ 500 $ 1000 $ 1352 (similar to $ 6000 LTD monthly
max)
Waiting Periods and Benefit Durations
Waiting periods 1 day accident/7 day sickness 1 d hospital, 7 d accident, 15 d sickness 30 day accident/sickness
Benefit durations 13 weeks 26 weeks Usually matches LTD waiting period if
group has both coverages
Group Dental Insurance
GAHU Group Insurance 101
Working Americans are absent some 32 million days every year and children miss an estimated 52 million hours of school annually due to dental emergencies.
Source: American Dental Association
The Problem
Did you know... One of out every two people in the United States
has some form of periodontal (gum) disease?1
Growing evidence indicates that the presence of gum disease can be linked to coronary heart disease and strokes?2
Oral cancer now accounts for 3% of all cancer deaths in the US - a number which exceeds that of melanoma and cervical cancer
70.1 Billion dollars spent on dental services in 2002 (31.0B on Stroke and 61.2B Coronary Heart Disease)
Source: 1 Web MD Health2 Mouth Body Connection, 2001
3American Heart Association. Heart Disease and Stroke Statistics—2003 Update. Dallas, Tex.: American Heart Association;
2002.
Employees Want Dental Coverage !
Common Procedures,Plan Designs, and Options
Deductibles, Maximums
Deductible $0, $25, $50, $75 Per Individual or
Family max of 3 X $150
Applies to all Type II and III Procedures
May Waive or Combined on Type I Procedures
Annual Maximums $750, $1000,
$1500, $2000 Some states may
vary between in and out of network
Ortho is usually a lifetime max
Most Common Preventive Services100% Coinsurance Level
100% Coverage encourages good dental health
Oral Examinations Complete intraoral x-rays/Panoramic film 4 Bitewing x-rays Routine Cleanings Fluoride Treatment Sealants
Most Common Basic Services80% Coinsurance Level
Returns tooth to natural function Emergency oral exam Intraoral Periapical x-rays Amalgam and composite restorations Periodontal including Periodontal
maintenance Endodontics Simple Extractions Oral Surgery
Most Common Major Services50% Coinsurance Level
High Dollar Lower Utilized Procedures Crowns, Inlays and Onlays Full and partial dentures Fixed bridges Denture adjustments Non-surgical TMJ Stainless steel crowns General anesthesia and IV sedation Space maintainers
Dental Plan Differentiators
Non Surgical TMJ More than 15% of all Americans Suffer from
chronic facial pain-ADA
Implants Placements of Implants increased 49% in a
5 year period from 1995 to 2000-ADA
Plan Stability Stable Dental plans should avg.. trend or
less increases (especially Voluntary)
• Endo/Perio/Oral Surgery must be in basic!– 90% of all dental procedures rendered fall in Preventive or Basic Services.1 –About 4% of submitted claims are Endo, Perio, Oral Surgery
• $1000 dollar maximum is not enough– 5.8% of Employees met their maximum of $1000 in 20031
–3.2% employees met their maximum of $15001 – Increasing the Max increases the rate 3 to 7 %
Dental Plan Myths
What’s in a PPO?
National network
Discounts on non-covered services
Freedom to choose any provider
At least 25% overall claims savings
Can you Identify Active, Passive, and MAC Plans?
No Charge Services
What is Prepaid Dental All About?
No waiting periods
No deductibles for routine services
No referral required
Each family member may choose a different plan dentist
No claims to file
Covers pre-existing conditions
InsuranceCompany
Reimbursement
Claim Forms
Co-Insurance &Balance Billing
Insured
Premiums
Dental Insurance
PREPAID DENTAL PLANS
Prepaid Dental
Capitation
Claim Forms
Copayments
Subscriber
Premiums
Prepaid Dental Plans
What is prepaid Dental all about?
“Shared Risk” partnership with the Dentist
Dentist is “wellness motivated”Affordable dental benefitsLinked to the sales processMonitored by regulatory bodiesSelf-monitored through rigorous quality
standards
Voluntary Group Benefits
Voluntary Group Term Life, Long Term Disability, Short Term Disability, and Dental Insurance
Voluntary - The Three Phase Sale
Broker Sale
Employer Sale
Employee Sale
Why Voluntary Coverage for the employer and Employee?
With the rising cost of medical insurance, many employers are looking for ways to cut costs and still offer employees a comprehensive benefits package.
Employees’ basic needs for core insurance are not met in the individual marketplace.
Why Voluntary Coverage for the employer and Employee? (cont.)
Coverage is available to employees at group rates.
Coverage is 100% employee paid, therefore there is no additional cost to the employer (other than plan administration costs).
Employees are able to tailor coverage to their own individual needs.
Why Voluntary Coverage for the employer and Employee? (cont.)
Employees benefit from the role their employer plays in evaluating insurance options.
Employees appreciate the convenience of payroll deduction and the advantages of group rates and underwriting.
Why Voluntary Coverage for the Broker?
If you don’t provide benefits solutions that meet the needs of your clients and their employees, someone else will. In fact, voluntary product sales have shown double-digit increases over the past several years.
Voluntary benefits products provide additional revenue potential without the time and expense of prospecting for new clients.
Voluntary benefits products can improve persistency and client retention.
What makes a Successful Voluntary program is the products and process!
ProductsProcess
Product Characteristics
Employee Choices Competitive group pricing low participation requirements
(normally 20% - 40%) Payroll Deduction pre or post tax
depending on product
Process Characteristics
Pre-Communication Strategies Employers
Commitment Mandatory Group
Meetings Payroll Stuffers Announcement
Letters Posters Promotional Items
Ease of Enrollment Carrier Enrollment
Assisstance Personalized or
Customized employee enrollment cards
Payroll Grids Product Brochures
Voluntary GROUP TERM LIFE
AND ACCIDENTAL DEATH AND
DISMEMBERMENT (AD &D)
Product CharacteristicsVoluntary Life/AD&D
Election Amounts Coverage for employees usually up to
$500,000 or 5 times their salary Coverage for spouses usually up to 50%
of the employee election amount Coverage for children up to 50% of the
employee election amount not to exceed $10,000
Age banded rates
Product CharacteristicsVoluntary Life/AD&D (Cont.)
Schedule Amounts Increments of $10,000 Times Salary Plans
Guarantee Issue Coverage (No medical questions) depending on the size of the group it can
range from $10,000 to $150,000 Different Guarantee issue amounts for
employee, spouse, and children
Product CharacteristicsVoluntary Life/AD&D (Cont.)
Option to change benefits at annual enrollment
PortabilityConversionWaiver of PremiumAccelerated Death benefit (ADB)AD&D option usually matches life
election
VoluntaryLONG-TERM DISABILITY (LTD)
Product CharacteristicsVoluntary LTD
Types of Plans Employee option in $100 monthly
increments Employee option to elect 60% of their salary
Election Amounts Coverage for employees usually up to 60%
of their salary not to exceed $5,000 of monthly benefit
24 hour coverage
Product CharacteristicsVoluntary LTD(Cont.)
Guarantee Issue Coverage (No medical questions) A Pre-existing Condition limitation may
apply
Option to change benefits at annual enrollment
PortabilityConversion
Product CharacteristicsVoluntary LTD(Cont.)
Waiver of PremiumSurvivor BenefitAge banded rates
Benefit Rates Payroll rates
VoluntarySHORT-TERM DISABILITY
(STD)
Product CharacteristicsVoluntary STD
Types of Plans Employee option in $50 weekly increments Employee option to elect 60% of their
salary
Election Amounts Coverage for employees usually up to 60%
of their salary not to exceed $600 per week benefit
Non-occupational coverage only
Product CharacteristicsVoluntary STD (Cont.)
Guarantee Issue Coverage (No medical questions) A Pre-existing Condition limitation may
apply
Option to change benefits at annual enrollment
Age banded rates Benefit Rates
VoluntaryDental and Pre-paid
Double-digit renewal increasesmay apply
Voluntary Dental Product Designs ShouldDrive Rate Stability and Participation
Average renewal Increases
Advancing CO Insurance on Major Procedures
Waiting periods
Endo and Perio covered as Major procedures
Product CharacteristicsVoluntary Dental
Types of Product Indemnity PPO Pre-paid Schedule
Product CharacteristicsVoluntary Dental (Cont.)
Types of Plans Basic plans with no major coverage Comprehensive coverage that offers
incremental benefits through wither waiting periods or increasing co-insurance
Schedule plans with set re-imbursements so insureds will always know exactly what their out-of-pocket costs are when visiting their dentist
Product CharacteristicsVoluntary Dental (Cont.)
Types of Plans (Cont.) Pre-paid plans offered through
participating dentists High Low Dual Choice Triple Choice
Product CharacteristicsVoluntary Dental (Cont.)
Election Amounts Coverage for employees Coverage for spouses Coverage for children
Rating Structures Four Tier (ee, ee/sp, ee/ch, family) Three Tier (ee, ee+1, ee+2 or more) Composit (ee, family) Per Child (ee, ee/sp, ee+1child, ee+2children)
Product CharacteristicsVoluntary Dental (Cont.)
Option to change benefits at annual enrollment
Waiting periods Graduated benefits through co-
insurance Waiting periods on co-insurance
All policies offered by any carrier have limitations, exclusions, and
restrictions.
Please review any policy carefully, and direct questions to
the respective carrier.
QUESTIONS???
THANKYOU