Why You Should Partner With Colonial Life


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  • It’s no secret employers are struggling to control health and benefit costs while still offering a benefits program that helps them compete for top talent. But did you know that one of the top 4 reasons this job is so tough is because employees have a poor understanding of their benefits plan? This was confirmed in a 2009 survey by Watson Wyatt Worldwide of about 500 employers. Simply not knowing what benefits they have and how they work is costing employers and workers money!
  • What’s ironic is that 90% of surveyed employers say that educating employees on their benefits is important, but at the same time, the majority (79%) of employers say their employees don’t understand how their benefits work. That’s certainly a huge gap between what employers say is important and the results they achieve. Obviously, they want benefits education and they understand how important it is. So why aren’t they doing anything about it? Many employers just don’t have the resources while others simply don’t know the best way to accomplish this. So, ultimately, it’s the BROKER’S responsibility to take care of this. And if they’re NOT, it could warrant a change in brokers. If you can offer them a solution, that’s a great way to influence prospects to hire YOU as their broker
  • Let me show you how we can help YOU do something about this issue for your clients – here’s a 2-minute video clip that explains how we do enrollments and how easy the process is.”
  • [After the video is played] The video was filmed with actual brokers who have adopted the employee-level service program that I am going to go over with you today.
  • Let’s take a look at how benefits counseling works for employers and their employees. Employees Richard, Susan, Michael and Jenny all have different needs. (click through 4 employees) It is the Benefits Counselor’s role to sit down with each employee one-to-one to help the employees uncover what those needs are. The counselor can then explain to each employee what his or her options are. (click) Employers establish how much they can contribute to the benefits package each year, and they can then give employees options to buy-up to a richer benefits package. This strategy allows employers to offer a richer benefits program without breaking the bank and … [click through voluntary benefit options] … at the same time to allow their employees to customize their benefits to their individual needs. This structure empowers the employees by giving them the POWER to choose what they need, specifically based on the needs of their family. Most employees buy their benefits at work – including coverages like life insurance and disability insurance. And let’s face it, insurance agents, outside worksite sales, are not in a hurry to drive across town to sell a $20,000 life insurance policy to an employee earning $20,000 to $50,000 a year. So the Benefits Counselor becomes a trusted advisor to guide employees through the decision-making process—something that they probably have never had before.
  • Let’s talk about differentiating yourself from other brokers by looking at the standard enrollment experience used in the industry today. (click through the bullets under the standard group enrollment) In most cases, the interaction between the broker and the client’s employees is neither personable nor enjoyable. Now let’s look at another type of enrollment. ( click through the bullets) Providing a 1-to-1 personalized consultation is a service that most employees are not used to receiving, and they appreciate the attention. It helps them have a greater understanding of their benefits. And you are now offering an approach that separates you from other brokers: For prospects , it is highly unlikely that the current broker is offering this level of personalized service. For existing clients , they will see you delivering MORE VALUE and it will protect you from competing brokers. The magic of using this approach with your employer prospects is that you are separating yourself from your competitors. You now offer a separate CATEGORY of service that they do not offer.
  • You ask the employer which one he would rather have – “Mr. Employer, why do you offer benefits? How much do you spend on those benefits? Would you rather have…” (click all bullets) By comparing a category of services that is clearly superior to the status quo, you can’t lose.
  • This is how you differentiate and insulate yourself from your competition.
  • What’s really great about offering this service category is that you can offer it to businesses of all sizes, everywhere. It’s commonplace for larger companies to offer voluntary benefits; however, few small companies offer them. So you can help your smaller clients offer “big company benefits” and help them be more competitive in attracting and retaining employees.
  • And you can offer all of these voluntary benefits – as well as all of the services that go with them – at no direct cost to you or your client!
  • We all know that Section 125 has been around for a long time. In our experience, it is incredible the number of employers who DO NOT take advantage of a Section 125 plan. We write more than 10,000 new employer groups every year, and we implement NEW Section 125 plans on more than 50% of them! Of course, many of them are small employers under 50 lives, but these are important clients, too. What is EVEN MORE interesting is the number of employers who have not received a really clear explanation of what Section 125 does for them and for their employees. This is an example of the COMMUNICATIONS VALUE that you can bring as a broker.
  • This slide explains what the benefit of a Section 125 Plan is for both the employees and the employer. The 30% savings includes: -Reduced Federal Income taxes -Reduced State Income taxes and -Reduced Social Security taxes.
  • The key to this slide is the animation. Typically, when this is shown on paper, there are too many line items and columns for the prospect to look at, confusing them. This chronologically illustrates the tax consequence of the Section 125 plan – helping your clients to see the net effect of tax savings. (Click through the slide) By paying for their insurance premiums BEFORE taxes, the employee saves $1,860 a year.
  • Of course, the employer also saves money from the Section 125 plan. This is a simple example of how an employer saves money in payroll taxes and workers’ compensation contributions. It is really interesting how when you show this slide to employers, they immediately start looking for their savings based on their number of employees. Even if they are a larger company, they just do the math to tally up their savings. Again, employers may or may not have heard of Section 125. Even if they are familiar with it, they may not have EVER received a clear, simple explanation of the benefit it provides.
  • Of course, the employer also saves money from the Section 125 plan. This is a simple example of how an employer saves money in payroll taxes and workers’ compensation contributions. It is really interesting how when you show this slide to employers, they immediately start looking for their savings based on their number of employees. Even if they are a larger company, they just do the math to tally up their savings. Again, employers may or may not have heard of Section 125. Even if they are familiar with it, they may not have EVER received a clear, simple explanation of the benefit it provides.
  • During a one-to-one session, we provide employees with specifics on how their choices are paid for – showing both their contribution and your client’s. This is an example of the summary that we will provide for each employee. It shows every benefit the employee selected, all benefits that are pre-tax and all benefits that are after-tax. And, here on paper, the employee sees exactly what the employer spends on the cost of each benefit and how much the employee is saving with pre-taxed premiums. The employee can take this home, review it more extensively and share it with his or her spouse or significant other. They can consider the benefits the employee has, your client’s investment in the employee, and the effect the deductions have on the take-home pay.
  • Some research has shown employee loyalty and morale are directly tied to their understanding of benefits they receive. The more employees know about those benefits, the more likely they are to be happy in their jobs. [Recent example if needed – MetLife’s 2009 Study of Employee Benefit Trends shows a direct correlation between benefits satisfaction and loyalty, and effective benefits communications.] Benefit Statements are an effective and tangible way to help employees understand the benefits they receive. These statements can become a standard no-cost service offering for ALL your clients, no matter how small. This is a sample Benefits Statement, which the employee can take home. It’s designed to show the employee's “hidden paycheck.” Employers respond very positively when you take them step by step through a benefit statement like this… (click through the boxes) This statement shows employer contributions for benefits as a part of the employee’s total compensation. It can provide a total overview of all benefits, including medical insurance, vision, 401k match, paid time off and retirement plans – any benefits your client wants to highlight. Employees learn the true dollar value of their benefits and gain appreciation for what your clients provide. Your Colonial Life Benefits Counselors will walk through this statement with every employee, and the employee will leave the 1-to-1 session with a printed copy.
  • Would you like to talk to your clients about something more than rate increases? Tell a different story – one centered on solutions to health care cost and retention goals. It’s common for brokers to show medical renewal options that save money by raising the hospital deductible. This works for the employer, but the employees now have a big gap in coverage. Our Medical Bridge Strategy helps employees fill that gap and still save money. And the employer saves money on the higher deductible plan as well. Let’s take a look at how the Medical Bridge Strategy works with a sample HMO plan. This works for PPO plans in the same way. Here’s an employee– Susan. If she has a standard HMO plan, her monthly cost would be just over $300, and she’ll have to pay a $250 deductible if she gets hospitalized. By raising the deductible, her premiums are going to go down from $311 to $242, saving her $69 a month. The reason for the savings is the hospitalization deductible is going up to $1,500. But don’t worry! We’re going to care of that. We’re going to offer what we call a Medical Bridge Plan. It’s basically a reimbursement plan that pays a specific amount per hospital stay. For example, a $1,500 Medical Bridge plan would reimburse Susan $1,500 if she gets hospitalized. That benefit check will make her hospitalization co-pay ZERO. Susan now has a richer benefits package. Under her prior plan, she would have had to pay $250 out of pocket and $69 more a month. The cost of the Medical Bridge plan is only $28 a month. If you take the $69 a month savings and subtract the $28 cost for the hospitalization gap plan, the overall savings on the combined plan is $492 a year on just Susan alone. So not only are we saving almost $500 on the cost of Susan’s health insurance – we’re also offering her a richer plan. The Medical Bridge strategy is one of the most creative ways to reduce costs on a medical plan renewal, while at the same time increase benefits for employees.
  • Let’s look through all the services that you can now provide your customers. (Click through each of the services and stop after Benefits Statement bullet.) I haven’t talked too much about three other services that we are willing to offer select brokers who adopt this service offering. (Click to Field Underwriting bullet.) Our benefits counselors are equipped with underwriting tools that make it easy for them to field underwrite most of our policies – and we take care of all of that for you. In general, our underwriting approach makes it possible for most employees to qualify for our coverage. (Click to Enrollment bullet.) We will communicate and enroll all the benefits in the employer’s benefits package, and we can handle it all with our award-winning enrollment system--Harmony. (Click to Case-Scrubbing bullet.) We will take their applications and scrub them for accuracy so you can provide clean submissions to your other carriers. (Click through to last bullet) We provide all these services at no direct cost to you or your client. To summarize what we have discussed … (click to next slide)
  • (Click through the bullets) And the bonus is that you are also making more money!!!
  • I used a sample Medical Bridge case earlier in my presentation. I would really like to show you how the Medical Bridge Strategy might work on one of your actual cases. We can look at the renewal options on one of your smaller groups right now or just pick one client that you’re comfortable with. I can quote you a Medical Bridge plan that helps fill the gaps in that client’s plan. I have a version of this presentation that we can customize for your client or for a prospect – maybe a case where you know someone but have not been able to break in yet. I can customize the presentation for your agency, and we could go and present together. I would basically be the representative responsible for coordinating your Benefits Counseling services. If you’re happy with the results, great! If not, you can just keep doing what you’ve been doing and I won’t bother you again (laugh) … is that fair?
  • Why You Should Partner With Colonial Life

    1. 1. Why You and Your Broker Should Partner with Colonial Life
    2. 2. Employee Education Employers say that… <ul><li>90% of employers say employee understanding of their benefits is important. </li></ul><ul><li>Only 21% say employees have a good understanding of their benefits. </li></ul>Source: Colonial Life, Society for Human Resource Management national conference survey, June 2008
    3. 3. Employee Education We make benefits count…
    4. 4. Employee Education
    5. 5. Benefits Counseling Richard needs more life insurance Jenny needs cancer coverage Michael needs disability insurance Susan needs extra accident coverage Benefits Counselor Personalized one-to-one advice Life Insurance Most employees don’t have a life insurance agent they can talk to or ask questions, especially if they need less than $100,000 of life insurance. Accident Coverage For employees with kids, they can get benefits in the event that they (or their kids) get injured in an accident or sports-related injury. Disability Insurance Most employees can’t afford to live off state disability alone. Disability insurance helps them pay the bills as they recover. Cancer Benefits Health insurance may not cover all medical costs, and what about credit cards bills, rent or mortgage, car payments, etc? Employer sets the budget… Employees have the power to choose an option within the employer-set budget… OR buy-up to a richer package.
    6. 6. Differentiating Yourself Category 1 Category 2 <ul><li>Standard Group Enrollment </li></ul><ul><li>The “insurance guy” talks to the group and hands out brochures. </li></ul><ul><li>Everyone is too shy to ask questions. </li></ul><ul><li>Employees leave the enrollment confused. </li></ul><ul><li>Confused people don’t appreciate their benefits. </li></ul><ul><li>Your competition (other brokers) are all doing this. </li></ul><ul><li>Benefits Counseling Service </li></ul><ul><li>Employees receive a 1-to-1 benefits counseling session with an expert. </li></ul><ul><li>Employees are more comfortable asking questions. </li></ul><ul><li>Employees now understand their benefits more. </li></ul><ul><li>Employees now appreciate their benefits more. </li></ul><ul><li>You now offer something your competition doesn’t offer. </li></ul>
    7. 7. Differentiating Yourself Which one do you want… <ul><li>A group meeting where everyone leaves confused </li></ul><ul><li>or… </li></ul><ul><li>Having a Benefits Counselor sit down with each employee one-to-one, giving every employee specialized attention? </li></ul>
    8. 8. Categorically, you’re offering the client a SERVICE that sets you apart from other brokers.
    9. 9. Voluntary Benefits <ul><li>What % of employers with >1,000 employees offer voluntary benefits? </li></ul><ul><li>What % of employers with <100 employees offer voluntary benefits? </li></ul>*“Target Model and Larger Case Research: Breakout for Benefits Communication and Education,” Colonial Life, July 2008 **“Small Business Owners: 2009” study, LIMRA International, 2009 78%* 27%* Value: Big Company Benefits for Small Companies
    10. 10. Voluntary Benefits *at no direct cost to the employer* Life Insurance Disability Insurance Extra Cancer Benefits Extra Hospital Confinement Benefits Extra Critical Illness Benefits Extra Accident Benefits
    11. 11. How do employees pay for these voluntary benefits ?
    12. 12. Answer: Payroll deductions through a Section 125 plan* … (Colonial Life clients get FREE Section 125 plan administration) *for any products that qualify to be pre-taxed
    13. 13. Section 125 Plan <ul><li>Why should employees do this? </li></ul><ul><li>Payroll Deductions = Approximately 30% Savings </li></ul><ul><li>Why should employers do this? </li></ul><ul><li>Payroll Deductions = Lower Gross Payroll </li></ul><ul><li>Lower Gross Payroll = Savings on Workers’ Comp </li></ul><ul><li>Lower Gross Payroll = Less Payroll Taxes </li></ul>Colonial Life clients get all Section 125 administration fees waived
    14. 14. Section 125 Plan <ul><li> without Section 125 </li></ul><ul><li>Monthly Salary: $3,200 </li></ul><ul><li> </li></ul><ul><li>Taxable Income: $3,200 </li></ul><ul><li>Taxes: - $ 980 </li></ul><ul><li>After Taxes Income: $2,220 </li></ul><ul><li>Insurance Cost: - $ 500 </li></ul><ul><li>Take Home Pay: $1,720 </li></ul><ul><li>Employee’s Annual Savings: $1,860 </li></ul>$ 500 $2,700 $ 825 $1,875 Already paid for with pre-tax money $1,875 Insurance Cost (pre-tax): with Section 125 $3,200 Based on 2008 SC tax tables How much do employees really save?
    15. 15. <ul><li>How much do employers really save? </li></ul><ul><li> $500 employee’s insurance cost (deducted from payroll) </li></ul><ul><li> x 12 months </li></ul><ul><li> $6,000 employee’s payroll deduction per year </li></ul><ul><li> x 8.65% (7.65% in FICA + 1.00% in FUTA) </li></ul><ul><li> $519 annual employer savings per employee </li></ul><ul><li> </li></ul>Section 125 Plan
    16. 16. <ul><li>How much do employers really save? </li></ul><ul><li> </li></ul><ul><li> </li></ul>Section 125 Plan Company Size Annual Tax Savings 5 employees $2,595 10 employees $5,190 15 employees $7,785 20 employees $10,380 35 employees $18,165 50 employees $25,950
    17. 17. Salary Illustrations Employees understand how their choices affect their paycheck. Savings with Section 125
    18. 18. How can you make employees appreciate their benefits more?
    19. 19. Benefits Statements “ Our job is to make sure your employees appreciate you, the employer.” 31.2% benefits increase
    20. 20. How can your clients save money and NOT sacrifice benefits?
    21. 21. Medical Bridge SM Strategy <ul><li> </li></ul><ul><li> monthly cost hospitalization </li></ul><ul><li>Standard HMO: $311 $250 </li></ul><ul><li>Deductible HMO: $242 $1,500 </li></ul><ul><li>Savings: $69/mo. </li></ul><ul><li>Colonial Life Medical Bridge SM Policy: </li></ul><ul><li>Reimburses $1,500 for Hospitalization </li></ul><ul><li>Hospitalization Out-of-Pocket Cost to Employee = ZERO </li></ul><ul><li> Cost: $28/month </li></ul><ul><li>Total Savings: $492 /year/employee </li></ul>$0 Susan
    22. 22. Services Provided by Colonial Life <ul><li>Employee Education Services </li></ul><ul><li>One-to-One Benefits Counseling Services </li></ul><ul><li>Custom Benefits Portfolio Solutions </li></ul><ul><li>Benefits Statements </li></ul><ul><li>Field Underwriting Services </li></ul><ul><li>Enrollment Services </li></ul><ul><li>Case-Scrubbing Services </li></ul><ul><li>Section 125 Premium Only Plans </li></ul><ul><li>Access to CCH HR AnswersNow Website </li></ul><ul><li>Cost: ZERO </li></ul>
    23. 23. Big Firm Feel You’re offering more resources to your client. Clients feel like they’re getting a higher level of service. You’ve incurred no additional overhead. You’ve differentiated yourself from other brokers.
    24. 24. What’s The Next Step? <ul><li>Run a sample quote on one of your clients using the Medical Bridge SM Strategy. </li></ul><ul><li>Test the Powerpoint presentation with one of your prospects/clients. </li></ul><ul><li>Let me prove that this program will work for you. </li></ul>
    25. 25. Contact Donna Dwyer for a personal demonstration of how Colonial Life can Make Benefits Count for you, your clients and their employees. [email_address] 336-331-3410