Keeping Your Company Healthy

Your ability to retain top-quality employees may depend on the health care benefits you provide. Here's a look at how even a small business can afford disability, health, and even long-term care coverage.

As I have visited with many employers and listened to their concerns, what consistently rises to the surface is their desire to provide quality benefits at affordable prices to retain good employees, foster high morale, and ward off turnover. Most employers are genuinely concerned about the lives of their employees and their families, but find themselves squeezed by the cost of quality benefits.

Chief among the benefits employers consider is disability income protection. Here's why:
* Helps retain quality employees. More and more of today's workers look for this type of insurance in making career decisions.
* Maintaining good morale. If an employee becomes disabled, the morale of other employees is not diminished if they know he or she is taken care of.
* Cost savings. If an employee becomes disabled, and his or her income is protected by disability insurance, the employer can remove the employee from the payroll without feeling guilty.

Long-term disability insurance is a benefit employers can provide - often at lower cost than they might imagine. In fact, it is in the best interest of the employee to pay his own part of the group premium to avoid being taxed on the benefit. To be disabled and adjusting to living on 60 percent of your earnings would be challenging, but imagine if you were also taxed on that 60 percent! I recently pointed out to the owner of a construction company with 13 employees that to provide disability income protection for just the owner, with individual coverage, would carry a premium of approximately $250.00 a month, but to cover all 13 employees and the owner was just over $300.00 a month. But I do run into many small businesses that don't have the required 10 employees to qualify for group rates. Now GE Capital Assurance has a short- and long-term disability protection product on the market for groups of two to nine. This has helped fill the gap for many small businesses. At age 65, some disability contracts on the market actually convert without evidence if insurability to long-term care insurance protection, which means you have life-long protection at very affordable rates. It's easy to see how disability income protection can be a strong building block in hiring and retaining top employees.

Health benefits at the top of employees' priorities In a study by Consortium Health Plans (an alliance of 14 Blue Cross Blue Shield plans), health benefits were ranked as more valuable than a raise by American employees. "Over 80 percent of those surveyed responded that health insurance has become a major factor in their decision to accept a job," the study reported. In light of that fact, employers - like an office manager with whom I recently spoke - are wondering what to do about the 23 percent increase in premium that was received at renewal, as well as the reduction in benefits the often occurs at the same time. Admittedly, these are questions that have few answers.

The Chamber of Commerce of West Alabama, in response to member needs, is making available alternative plans in health, dental, and long-term care insurance. The plans are designed to provide excellent health coverage at rates below the industry average. Members are given a choice of companies and plans. The two companies currently participating are United Health Care and Philadelphia America Insurance Company; there is a prospect of another company being added to offer still more choices. The organization behind this effort is Financial Resource Group, which is based in Birmingham. Founded in 1991, it is a full-service insurance agency responsible for the marketing and servicing of benefits for the Chamber of Commerce Association of Alabama. The group's president, Donald Herman, started in the insurance industry in 1963 with Mutual of New York after getting a B.S. degree from the University of Alabama's business school. He is on the State Board of the Alabama Association of Health Underwriters. Financial Resource Group's mission is to work with chamber organizations in the state to provide lower premiums for quality coverage in the areas of health, dental, and long-term care insurance. FRG has built an organization that has negotiating power with these providers, which enables employers to receive reasonable rates without sacrificing quality and benefits. The competition this activity interjects into the marketplace will, it is hoped, have a positive impact and give some relief to the rising insurance costs employers are forced to pay.

In addition to health insurance plans, the dental coverage is available through Southland Insurance Company and, unlike most dental insurance, which requires at least 10 people on the plan for eligibility, is available for smaller groups. FRG will introduce their long-term care insurance product in the next month. Benefits are more important than ever in retaining, rewarding, and recruiting quality employees. Finding solutions that provide those benefits at reasonable rates continues to be a critical issue for employers.

The Hart Group, Inc.
P.O. Box 2265
Tuscaloosa, AL 35403
Phone: (205) 345-7668
Birmingham residents: 871-1016
Email: insurance@babshart.com