For most companies, looking at their health insurance plan every year is a traditional process. Unfortunately, other ancillary benefits are often overlooked, renewed the way they are because they aren’t used as much, or there’s a rate hold. This can lead to consequences, especially for group disability insurance.
Disability insurance replaces a person’s income up to a fixed dollar amount if they become disabled. These policies are often in place for the long term and, for the past several years, have experienced lower claim rates, thus leading employers to renew the plan without reviewing them.
The consequence of the as-is status can result in reverse discrimination. For example, if a person’s income has gone up over the past few years, then the income being replaced is a lower percentage of income. Another risk is that the policy may benefit to age 65, but an employer may have an employee who is not eligible for Social Security until age 67.
One method that’s frequently used to fix the reverse discrimination issue is to layer individual policies on top of the group plan for the higher wage earners. This is also a great way to provide an affordable executive benefit that can be a tool for attraction and retention.
Employers should perform a periodic review on all their policies with their brokers. They might be surprised at the additional value and increased protection they’ll get.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.
