Sick Pay Plans & Worksite Disability Insurance. By: Charles L. Westmoreland CLU,ChFC,RHU,REBC,MSFS. Boot Camp. Payroll Deduction Disability Insurance. The Needs of Small & Medium Sized Employers. Employee Benefit Expertise Big Company Benefits @Budget Prices Knowledge Givers
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By: Charles L. Westmoreland CLU,ChFC,RHU,REBC,MSFS
Payroll Deduction Disability Insurance
$3 Billion and Growing
Employer sponsored disability plans
Privately owned disability plans
State sponsored disability plans
Specified Disease &Critical illness plans
Long Term Care CoverageSources of Disability Benefits
A disability wage continuation plan almost always constitutes an employer welfare plan.
Disability insurance is the simplest way to satisfy ERISA and IRS requirements
Disability insurance satisfies most of the requirements of a sick pay plan.
Premiums are deductible in the current tax year
Most employers are not equipped to be in the disability insurance business.
F.A.S.B. # 112(future benefits are a liability)Formal or Informal Funding
Transfer the risk of paying claims to the insurance company.
The person would be considered an ex-employee.
A firm doesn’t have a plan, a key employee becomes disabled and the firm continues to pay them. The firm deducts the payments as wages.What is the red flag to the IRS?
When the Ex-Employee applies for Social Security Disability,or when an audit is conducted by the IRS, the subterfuge will be obvious.They Can’t Catch ME!
Most sick pay plans are limited to a few days or weeks.
Social Security benefits are difficult to qualify for and usually do not begin for at least six months.
Pay Check Protection
Workers Compensation Security definition)
State Disability Plans
Medical Plans(Supplemental Accident Coverage)
Specified Disease Coverage
Sick Pay Plans
Long Term Care
Critical IllnessProgramming Disability Benefits