Tag Archives: Financial Services

ACA: Leveraging the Affordable Care Act

Gavel, Stethoscope and Books on the American Flag with Selective Focus.

(This article was written by Rick Dacri and published in JobsinMe.com)

Understanding and implementing the Affordable Care Act has dominated the national conversation. Yet, while this is occurring, business executives have the arduous task of making sense of the law and then making the tough decisions that can work for their company, their workforce and, in many cases, the employees’ families.

Lost in the headlines, political grandstanding and conflicting implementation scenarios delivered by the experts is a strategic issue all executives should consider: what kind of company do I want to be? And then (from a tactical standpoint): how can I leverage health insurance to help me achieve this?

Legally Mandated for Large Companies

Health insurance is simply a benefit, just like any other benefit. It’s expensive and now for the first time, it is a legally mandated, just like workers’ compensation and unemployment compensation. As an organization, you must either provide insurance or send your employees to the health insurance exchanges to buy insurance on their own. Either way, there is a cost. If you’re small, your company is exempt, for now.

Using It to Your Advantage

But for a moment, let’s step back from the details to address an opportunity before you. Employees need health insurance. Many decisions in both seeking employment and remaining with an employer often come down to whether insurance is offered and its cost. Employers should look at health insurance as a powerful tool that they can leverage to recruit, retain and engage workers.

It is much more than simply another business cost. Dropping coverage or reducing employee hours to force them to go to the exchanges may yield short-term positive bottom line results, but is more likely to yield long-term negative consequences. Employees will go to work for someone else before shopping for their own health insurance coverage.

Building a Strategy, Culture

Employers should build a strategy around both wages and benefits. Know what makes sense for the business. Address the kind of work culture you want, around the brand that reflects who you are and who you want to be. Establish a clear philosophy around compensation and around employees that best reflects your brand. And remember, what impacts an employee often impacts the family.

Employers who take care of their employees, by either providing or even expanding coverage of those eligible for insurance, send a powerful message. They are betting that their employees will become fully engaged and loyal, resulting in increased employee retention, customer service and a corporate brand that draws job candidates like a powerful magnet. And all of this will result in increased sales and profits.

Rather than focusing on short-term savings by eliminating health insurance, these executives are wagering on their employees and the long-term health of their company by adding employees to the insurance rolls. This strategy focuses on nurturing their workforce and understanding that customer satisfaction requires happy, engaged employees.

It is the big picture approach. It’s a smart move; it’s strategic; and it makes good business sense. Employees are not going to stick around at a company that neither invests in them nor provides them affordable health insurance. The increased cost of health insurance coverage will provide a greater return on your investment.

If you want to know more about how I can help you, click Dacri & Associates.

If this post was of interest to you, you may want to read these:

  1. ObamaCare Good For Business
  2. How to Communicate with Employees About the Health Insurance Exchange
  3. HR HelpLine: When You Need Expert Advice



Leave a comment

Filed under Compliance, Insurance

EPLI: Quick Hits In Employment Practices Liability Insurance

images(This guest post was written By Scott Simmonds, CPCU, ARM; July 18, 2013)

Hopefully your insurance agent has talked to you about employment practices liability insurance (EPLI). It’s the insurance protection against the financial consequences of job applicants, employees, and former employees who bring suit for discrimination, harassment, wrongful termination, failure to hire, and other workplace torts.

Here’s a partial list of issues your insurance agent may not have told you:

Dollar Limits of Coverage – The coverage limit usually includes the cost of defense. So, as you pay your attorney, the policy uses up the limit of coverage available to pay any award or settlement. Limits are also expressed as an aggregate for the total of all claims in a year. Buy enough insurance.

Sharing Limits – Having EPLI with your directors and officers insurance may be convenient.  It may not be a good idea though. Your directors will not want to hear that EPLI claims have eaten away at the limits available for D&O claims.  Ask your insurance agent if your policy separates claims for D&O and EPLI into separate “buckets” of coverage.

Low Deductibles – Low deductibles cost you premium dollars. Get quotes for higher deductibles to help pay for higher limits of coverage.

Definition of Harassment – Some policies still only cover “Sexual Harassment.” What about harassment based on race, ethnicity, disability. The policy should provide coverage for harassment, including sexual harassment.

Retaliation – Be sure your policy includes coverage for suits alleging that you have retaliated against an employee.

Choice of Attorney – Do you pick your attorney or does your insurance company? Using their attorney may be cheaper.  Is it what you want though?

Common Exclusions – Like all insurance policies there are exclusions:

-Workers’ compensation claims

-ERISA actions

-Employment wage disputes (Fair Labor Standards Act)

-Unemployment Insurance

-Disability benefits law

-National Labor Relations Act

-Occupational Safety and Health Act

Several insurers are now offering low-cost EPLI insurance as part of the workers’ compensation policy.  Talk with your insurance agent.  Is it time for a detailed review of your insurance?

Need more information about EPLI, contact Scott Simmonds.  Scott is an unbiased insurance consultant who offers insurance advice and coverage reviews without the conflict of insurance sales and commission payments.

Other posts you may want to read:

If you read this far, you may want to subscribe to my free management newsletter. Click Newsletter

1 Comment

Filed under Insurance

How About A Way to Figure Adequate Liability Insurance Limits?

This is a guest blog written by Scott Simmonds, CPCU, ARM, CMC Insurance Assurance Consulting; www.ScottSimmonds.com

How do you determine how much liability insurance a business should have?

Here are the “normal” liability insurance policies for most businesses:

Auto Liability – Pays for bodily injury and property damage caused by a motor vehicle accident.  Should include coverage for accidents caused by the operation of owned vehicles and non-owned vehicles (by an employee, for example).  My Minimum Recommendation: $1,000,000.

 General Liability – Pays for bodily injury and property damage liability.  Most policies also include coverage for libel, slander, wrongful eviction, false arrest, and publication that violates privacy. Coverage applies at your locations, at other locations in the course of your business, for products liability, and for completed operations.  My Minimum Recommendation: $1,000,000 each occurrence / $2,000,000 in the aggregate.

 Employers’ Liability – Part of workers’ compensation insurance.  Pays for bodily injury that comes from the employment relationship but excludes injuries covered under workers’ compensation.  The best way to describe this coverage is with an example.  A boat builder comes home every day with fiberglass dust in his clothes.  The dust gets into the air at home and in the clothes of the family in the laundry.  A child in the home gets sick from the dust.  That would be covered by employers’ liability. My Minimum Recommendation: $100,000 (most umbrella insurers will require $500,000).

 Employment Practices Liability – Liability insurance for acts of employment harassment, wrongful termination, failure to hire, discrimination, and other similar allegations. EPL policies almost always provide for defense cost coverage within the limit of coverage – increasing the amount of insurance you need.  My Minimum Recommendation: $1,000,000.

 Fiduciary Liability – Protects the fiduciaries, directors, and officers of employee welfare plans (group insurance, pension plans, 401k plans) against actual or alleged wrongful acts. Covers liabilities imposed by the federal law ERISA.  My Minimum Recommendation: $1,000,000.

 Directors’ and Officers’ Liability – Provides coverage for allegations of third parties for mismanagement, failure to act properly, and other “wrongful acts” against directors and officers. Coverage also can be included for the organization, known as entity coverage. Not all companies need D&O insurance.  The coverage is necessary for non-profits and companies with diverse ownership interests.  If you have a small company with 3 owners all active in the business, you can probably do without D&O.  These policies almost always provide for defense cost coverage within the limit of coverage – increasing the amount of insurance you need.  My Minimum Recommendation: $1,000,000.  More coverage may be advisable depending on exposure to loss and the assets of the organization.  It is also a value decision.  Get quotes at a variety of limits and judge the value of the protection compared to the cost.

 Umbrella Liability – Provides extra liability coverage above the general liability, auto liability, and employers’ liability coverage. Also known as excess liability.  Every business should have at least a $1,000,000 umbrella.  There is no magic to this number.  $5,000,000 is a more realistic minimum. 

 I know of a four employee, $200,000 sales contracting firm that accidentally burned down a $7,000,000 church. Not many insurance agents would have suggested beforehand that the contractors buy a $10,000,000 umbrella.  Obviously, hindsight is 20/20.

 You have to decide how high is up.  Again, get quotes at a variety of limits and judge the value of the protection compared to the cost.

Leave a comment

Filed under Consulting, Management