Michelle Braddock, Executive Vice President
Of all the employee benefits that employers need to administer, group life insurance should be one of the easiest. However, there are a handful of common oversights that employers may make.
Salary – If your Basic Group Life or Voluntary Life programs are based on a multiple of salary, are you keeping those salaries current? Is the salary information you’re reporting to the insurance company in-line with the definition of earnings in your contract? If these things don’t align and a claim occurs, it may create problems for the insurance company or the beneficiary, affecting the amount paid.
Eligibility – With so many employees transitioning from casual to part-time to full-time and back, it is sometimes difficult to track for benefit purposes. Audit your bill periodically to make sure you’re not including anyone that doesn’t meet the minimum required hours for those benefits.
Billing/Administration – Did you know that if you are “self-billed” it’s your responsibility to insure that all coverage listed is actual? If there is a claim and the coverage listed exceeds what the employee should have qualified for, you may be responsible to pay the difference out of pocket. If the insurance company provides you with a list bill, they have the checks and balances in place to ensure that no one receives coverage in excess of the contractual rules.
Waiver of Premium – Be careful of terminating a disabled employee before checking to see if they qualify for the life insurance waiver of premium feature. This could save your employee from costly conversion premiums, when they may qualify to have their life coverage continued for free.
Conversion/Portability; Am I required to distribute these forms? – Unlike COBRA laws, there are not laws that require an employer to distribute or notify terminating employees that they have continuation rights to their life insurance. As long as their booklets or SPDs have been distributed, this is all the notification required by you. Because some insurance carriers want employers to provide this notification at termination, be sure to check with your carrier on their procedures.
Voluntary Life; Salary Multiplier – Most Voluntary Life insurance plans have a maximum coverage limit, usually a certain dollar amount along with a salary multiple. With so many employee status changes, many times a downward change triggers their voluntary life amount to become ineligible. If an employee once qualified for $200,000 of coverage at a 5 x salary limit, but his/her status change causes the salary to reduce $20,000, his/her maximum insurance amount now becomes $100,000. A periodic audit of this coverage may reduce your liability, as well as save employees money if they’re paying for coverage amounts they are no longer eligible for.
Imputed Income and Table I – And don’t for get to make sure your plans are compliant!
An employer-sponsored retirement savings plan, such as a 401(k) or 403(b), is a valuable employee benefit. However, a plan that offers employees too many choices with which to customize their account may make the outcomes worse instead of better.
It may seem that more options would make an organization’s retirement plan more appealing, but there could be unintended consequences. Recent research in social psychology has argued that too many choices may create confusion, and may even be demotivating and discouraging to employees. Despite plan education efforts, many employees are ill informed about the available options, either making poor choices or not choosing not to participate at all.
It’s also important to note that too many choices can also make it more difficult for the employer to be clear about plan options and plan expenses.
Donald B. Keim and Olivia S. Mitchell, Wharton School professors, studied what happened when employers streamlined their retirement plans by comparing plan participants’ contributions and assets allocations before and after the changes. In a paper titled, “Simplifying Choices in Defined Contribution Retirement Plan Design,” Keim and Mitchell report that limiting the number of investment options available resulted in the following improvements:
In addition to their diversification benefit, models offer features that may help individuals avoid some common investment mistakes, such as being too aggressive or too conservative and ill-advised market timing. These funds are managed with a disciplined, long-term approach, and are automatically rebalanced to keep investors’ allocations intact.
Employer-sponsored retirement plans are now the primary source of retirement income for most employees. This means employees are the architects of their own destiny when it comes to retirement. Employers can, however, lay the groundwork by using simplified plan design and a strategic communication plan to help employees act.
Mike Gorski, RD, CPT - MG FITLIFE
Eating - It’s hard enough to eat well at home, much less on vacation. Think about your accommodations and what you’ll have access to.
Do some grilling on day ONE: chicken, beef, pork, fish, veggies, etc. Use some of the leftovers for snacks rather than “snacks.”
If you are going out to eat a lot, stick with the basics: non-processed, whole foods, such as meats, fish, and veggies. Make your side dishes healthy; enjoy the main dish – but remember your portions.
Exercise - Consider your accommodations and figure out what will be available to you (weights, cardio, nothing). What does your schedule looks like and how much do you want to devote to exercise? You’re on vacation so try to figure out how this won’t impede your experiences and time frames.
Are there other activities you are going to be doing that are active, such as hiking or biking that could be considered a replacement for a training session? Here are some suggestions based on accommodations:
Drinking - This can be one of the biggest challenges on vacation.
Relax - Don’t come back from vacation more stressed out, in worse shape, and needing a cleanse to get back on track. That’s what vacation should have been. You should be more fresh and clear-minded when you come back than when you left.