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Lecture 14 Other Group Insurance Benefits. Dental Insurance Long-Term Care Insurance Legal Expense Insurance Property-Liability Insurance Voluntary Benefits. Group Dental Insurance. Taxation Same as other medical benefits Employer gets tax deduction for premiums
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Lecture 14Other Group Insurance Benefits • Dental Insurance • Long-Term Care Insurance • Legal Expense Insurance • Property-Liability Insurance • Voluntary Benefits
Group Dental Insurance • Taxation • Same as other medical benefits • Employer gets tax deduction for premiums • Employee is not taxed on coverage or benefits • Restricted coverage • $500-2000/year or $1000-5000/lifetime • Predictable expenses • Exams, cleanings, fillings • Why is it so popular? • 60% of all employees • 90% of large employers
Group Dental InsuranceExamples Cost of plan: $200/year Expected benefits: $150/year (range 0-1000) Employee 1: $60,000 salary 34% tax rate (F+S) Employee 2: $15,000 salary 18% tax rate (F+S)
Group Long-Term Care Insurance • Taxation (starting in 1997) • Employer gets tax deduction for premiums • Employee is not taxed on coverage or benefits (except if per diem exceeds $175 if excess of costs) • Cannot be offered through tax favored cafeteria plan • Cap on deductible long term care premiums (by age) • Need for Long-term care • Aging population • Cost of care ($30,000-50,000/year) • Lack of family care • Other policies exclude custodial care • Sources of Long-term care • Savings • Medicaid (encourages dissipation of assets) • Life care facilities
Group Long-Term Care Policies • Eligibility for favorable tax treatment • Eligibility for coverage • Worker • Spouse • Other family members • Cost • Age based (starting age) • Levels of care • Skilled nursing care • Intermediate care • Custodial care • Home health care • Adult day care
Group Long-Term Care Policies - (cont.) • Benefits • Specified dollar amount per day • Increasing benefit levels (if indexed, capped) • Duration • Eligibility for benefits • Previously - prior hospitalization • Currently - Activities of Daily Living (ADL) • Preexisting conditions • Exclusions • Renewability • Guaranteed renewable
Group Legal Expense Plans • Taxation • Premiums up to $70/year not taxable to employee • Authorizing legislation periodically expires • Types of plans • Closed panel • Open panel • Benefit schedules • Consultation • Preparation of documents • Adoption • Bankruptcy • Defense of civil suits • Juvenile delinquency • Domestic problems • Criminal defense
Group Property-Liability Insurance • Taxation • No favorable tax treatment • Employer can deduct premiums, but they represent taxable income to employees • Employee cannot deduct premiums • Types of coverages • Auto • Homeowners • Umbrella liability
Voluntary Benefits • Employee pays 100% of premiums • Reasons for growth • Cost control • Supplementary coverage • Changing demographics • Increased availability • Types of products • Life Disability • Dread disease policies Dental • Prescription drug Vision • Long-term care Property-liability • Underwriting • Cost