GAHU Group Insurance 101 Group Term Life Insurance AD&D Disability Income Insurance Dental Insurance Voluntary Disability, Life and Dental Presented by: Todd Boyd, MBA – Atlanta Sales Manager Venessa Collins- Dental Network Manager Assurant Employee Benefits May 24, 2006
The information provided in this presentation are examples of options available in the industry. Plan designs and options vary by carrier.
Schedules • Times earnings plan 1x or 2x earnings most common • Flat Amount plan $10,000, $25,000, $50,000 most common • Maximums range from $150,000 - $ 500,000 • Can vary by classes of employee within groups, e.g. Officers and Managers receive 2x earnings to a max of $ 200,000, and all other employees receive a flat $25,000.
Non-medical maximum limits • Non-Contributory Groups • Contributory Groups • GI amounts may vary for employees older than age 70
Participation Requirements • Contributory (Partially Employee Paid) Coverages • Usually 75% or higher - many states require at least 75% • Non-contributory (Employer Paid) Coverages • 100% participation required
Beneficiaries • Employee can name anyone as a beneficiary, other than the employer • If a beneficiary is not designated by employee, proceeds may be payable at the insurer’s option to surviving relatives, or to the executor or administrator of the deceased’s estate.
Limitations and Exclusions • Life Policies and AD & D policies may have separate sets of limitations and exclusions • Common items not payable: • Suicide - for contributory plans • War • Commission of a felony • Death resulting from intoxication or unprescribed drug use
Waiver of Premium • Many carriers will waive the premium for the group term life insurance if an insured is disabled from any gainful occupation - some offer an own occupation definition as well • Duration of disability waiver can vary, from 1 or 3 years, to age 65. • Can also be integrated with LTD coverage - waiver automatically approved if approved for LTD benefits (with same carrier)
Accidental Death & Dismemberment • Provides an additional benefit if the death results from an injury within a particular time frame - usually 180 days to 1 year. • Benefit is normally the same as the life insurance benefit - allowing for a double payment if the death occurs from an injury
AD & D Additional Benefits • Automobile Accident rider (Seat Belt required) • Higher Education benefit • Repatriation • Travel Assistance
Employee Paid Plan Options • Supplemental Life (Optional Life) • Employee is able to purchase amount over and above coverage provided by employer • Stand Alone Voluntary Coverage • Optional coverage purchased by employee • Employer provides opportunity to purchase and plan administration
Additional Options • Survivor Financial Counseling • Accelerated Death Benefit • Conversion • Interest bearing account for benefit proceeds • Waiver of premium on AD & D
Probability of Disability • A 30-year-old female has a 56.6% chance of becoming disabled before age 65 compared to only a 16.2% chance of dying. Guardian Life Study, quoted in Disability Income Insurance, Conning and Company Report, 2002
Probability of Disability • 1 in 7 people will become disabled for five years or more before they reach age 651 • 1 in 88 people will use homeowners insurance1 • 1 in 47 people will use auto insurance1 • 18.7% of the working-age population (age 18-64) report a disability2 1Disability Management Source Book, 1999 22000 Bureau of Labor Statistics
Definitions of Disability • “OR” Dual Definition • Occupation Test • Earnings Test • “AND/Maximum Capacity” Definition
Definitions of Disability (cont.) • Occupation Test • Material Duties • Own Occupation • Any Gainful Occupation • Regular Job Definition • Earnings Test • Flat amount, i.e. 7.5% • Lesser of flat amount or CPI-W (10% or 3%)
Waiting Period • Time period claimant must be disabled before they are eligible to receive benefits • Other names are: elimination period, qualifying period • Common waiting periods are: • 1 month • 90 days • 180 days
Benefit Schedules • Benefit Rates (% of pre-disability earnings) • 50% • 60% (most common) • 66 2/3% • 70% (very rare) • Benefit Maximums • $ 6,000 • $ 5,000 • $ 10,000
Maximum Benefit Duration • To SSNRA (Social Security Normal Retirement Age) • To Age 65 • 5 year • 2 year
Pre-Existing Condition Limitation • 3/12 or 6/24 • “prudent person” language • treatment-free period - 3/3/12 or 6/6/24
Indexing of Earnings Test • 7.5% • Lesser of 10% or CPI-W • Lesser of 3% or CPI-W • No Indexing
Return-to-Work Earnings • 100% return-to-work offset (usually for 12 months) • Indexed benefit - adjusted loss of salary ratio calculation • 50% direct offset • 70% indirect or All Sources offset
Offset with Social Security • Full Family Direct • Full Family Monthly Payment Limit • Primary Direct Only • Primary + 1/2 Dependent
Value Options • Cost of living adjustment • Activities of daily living benefit • Retirement savings benefit or pension supplement • Medical premium payment supplement • Critical illness • Employee Assistance Program
Cost Containment Features • Managed rehabilitation program • Limitations for certain diagnoses, ex. certain mental impairments, conditions with extremely subjective symptoms, etc.
Why offer Short Term Disability? • Provide income for employees suffering short duration illnesses or injuries to recover and return to work with the policyholder • Can increase employee satisfaction • Assist in retaining valuable employees
Types of STD Plans • Salary continuation (sick leave) plans • Self insured with advice to pay services • Fully insured • Non-occupational only, or integrated with worker’s comp
Benefit Schedules • Benefit rates • 50% • 60% • 66 2/3% • Benefit maximums (weekly) • $ 500 • $ 1000 • $ 1352 (similar to $ 6000 LTD monthly max)
Waiting Periods and Benefit Durations • Waiting periods • 1 day accident/7 day sickness • 1 d hospital, 7 d accident, 15 d sickness • 30 day accident/sickness • Benefit durations • 13 weeks • 26 weeks • Usually matches LTD waiting period if group has both coverages
GAHU Group Insurance 101 Group Dental Insurance
The Problem Working Americans are absent some 32 million days every year and children miss an estimated 52 million hours of school annually due to dental emergencies. Source: American Dental Association
Did you know... • One of out every two people in the United States has some form of periodontal (gum) disease?1 • Growing evidence indicates that the presence of gum disease can be linked to coronary heart disease and strokes?2 • Oral cancer now accounts for 3% of all cancer deaths in the US - a number which exceeds that of melanoma and cervical cancer • 70.1 Billion dollars spent on dental services in 2002 (31.0B on Stroke and 61.2B Coronary Heart Disease) Source: 1 Web MD Health 2 Mouth Body Connection, 2001 3American Heart Association. Heart Disease and Stroke Statistics—2003 Update. Dallas, Tex.: American Heart Association; 2002.
Deductible $0, $25, $50, $75 Per Individual or Family max of 3 X $150 Applies to all Type II and III Procedures May Waive or Combined on Type I Procedures Annual Maximums $750, $1000, $1500, $2000 Some states may vary between in and out of network Ortho is usually a lifetime max Deductibles, Maximums
Most Common Preventive Services100% Coinsurance Level • 100% Coverage encourages good dental health • Oral Examinations • Complete intraoral x-rays/Panoramic film • 4 Bitewing x-rays • Routine Cleanings • Fluoride Treatment • Sealants
Most Common Basic Services80% Coinsurance Level • Returns tooth to natural function • Emergency oral exam • Intraoral Periapical x-rays • Amalgam and composite restorations • Periodontal including Periodontal maintenance • Endodontics • Simple Extractions • Oral Surgery
Most Common Major Services50% Coinsurance Level • High Dollar Lower Utilized Procedures • Crowns, Inlays and Onlays • Full and partial dentures • Fixed bridges • Denture adjustments • Non-surgical TMJ • Stainless steel crowns • General anesthesia and IV sedation • Space maintainers
Dental Plan Differentiators • Non Surgical TMJ • More than 15% of all Americans Suffer from chronic facial pain-ADA • Implants • Placements of Implants increased 49% in a 5 year period from 1995 to 2000-ADA • Plan Stability • Stable Dental plans should avg.. trend or less increases (especially Voluntary)
Dental Plan Myths • Endo/Perio/Oral Surgery must be in basic! • 90% of all dental procedures rendered fall in Preventive orBasic Services.1 • About 4% of submitted claims are Endo, Perio, Oral Surgery • $1000 dollar maximum is not enough • 5.8% of Employees met their maximum of $1000 in 20031 • 3.2% employees met their maximum of $15001 • Increasing the Max increases the rate 3 to 7 %
National network Discounts on non-covered services Freedom to choose any provider At least 25% overall claims savings Can you Identify Active, Passive, and MAC Plans? No Charge Services What’s in a PPO?
What is Prepaid Dental All About? • No waiting periods • No deductibles for routine services • No referral required • Each family member may choose a different plan dentist • No claims to file • Covers pre-existing conditions
Dental Insurance Insurance Company Reimbursement Premiums Insured Claim Forms Co-Insurance & Balance Billing
PREPAID DENTAL PLANS Prepaid Dental Plans Capitation Prepaid Dental Premiums Subscriber Claim Forms Copayments
What is prepaid Dental all about? • “Shared Risk” partnership with the Dentist • Dentist is “wellness motivated” • Affordable dental benefits • Linked to the sales process • Monitored by regulatory bodies • Self-monitored through rigorous quality standards
Voluntary Group Benefits Voluntary Group Term Life, Long Term Disability, Short Term Disability, and Dental Insurance
Voluntary - The Three Phase Sale Broker Sale Employer Sale Employee Sale