What are Enhanced Benefits for Valued Employees?
Valued employees are the key to achieving your business goals. If they aren’t healthy, then the success of your business can be at stake. Enhanced benefits allow an organization to offer a benefit plan to valued employees that’s separate and distinct from regular group employee benefits. An enhanced benefit plan can be structured with flexibility to meet each individual’s needs and provide them with enhanced financial security. At Cove, we are skilled in creating, structuring, and administering enhanced benefits packages that focus on life insurance, disability insurance, and critical illness insurance.
Why Consider Enhanced Benefits for Valued Employees?
Enhanced benefits are a powerful tool in keeping your company competitive and attracting and retaining excellent employees. Although group insurance plans may provide some level of financial security, having supplemental individual life insurance, disability insurance, and critical illness insurance policies through an enhanced benefit plan can bridge your key employees’ financial gap that would exist if they died, became disabled or acquired a critical illness under a regular employee benefit plan. Enhanced benefits offer your valued employees, their family, and your business Space to Breathe when the unthinkable occurs.
How Does Enhanced Benefits for Valued Employees Work?
The employer pays the premiums of the valued employees’ life insurance policy and includes the insurance premiums in the employee’s taxable income. For disability insurance, the employer pays the premium and does not include the premium in the employee’s taxable income. For critical illness insurance, the premium is paid by the employers and the premium is charged as a taxable benefit. In the event of death or a critical illness, benefits are paid out tax-free to the employee. In the event of a disability, the disability benefit is taxable to the employee.
Enhanced Benefits 101
Do enhanced benefits coordinate with group benefits?
Yes, enhanced benefits are designed to coordinate with and supplement existing group benefit plans. In its simplest form, the key employee retains all the benefits provided through the group benefit plan, as well as additional insurance coverages, such as life insurance, disability insurance, and critical illness insurance.
Does group insurance fully cover employees?
Group benefit plans typically provide a base level of insurance coverage to all employees and cover a high percentage of income for death, disability, or illness. As income increases, the percentage of income that is insured typically reduces.
Enhanced benefit plans provide additional insurance coverages, such as life, disability, and critical illness to ensure the employee is fully insured based on their salary and position at the company.
Are enhanced benefits portable if an employee change employers?
Enhanced benefit insurance policies are portable. The insurance coverages provided through enhanced benefit plans are typically individual insurance policies owned by the employee while funded by the employer. As such, if an employee leaves an employer, the employee simply needs to change the payor of the insurance premium to themselves or to their new employer.