Comments on: The hidden risks of voluntary benefits

By: Ray

Ray — Tue, 10 Feb 2009 22:14:14 +0000

Thanks Ray
Lynn

By: Ross

Ross — Tue, 10 Feb 2009 14:34:37 +0000

We have an Aflac group. However, it is not mentioned in the manual. We do not contribute anything towards the premiums. If someone has a question, I direct them to the Aflac rep and he handles it. If the rep comes to our office, I will make an announcement over the intercom system, but nothing “official” will be posted.

Are we safe?

-Ross

By: Ray

Ray — Fri, 06 Feb 2009 17:10:11 +0000

Cindi:
This issue isn’t about liability with claims BUT about ERISA liabilities. (which are far more onerous) Having a voluntary benefit plan designated as an ERISA plan (particularly since it is a voluntary plan which is not and should not be administered by the employer) places an extra burden upon the employer. This is particularly true since these plans are touted as “NO direct cost” and “NO liability” to the employer. These statements by any company offering voluntary benefits could put the employer in a position to ignore procedures which they would follow if they knew in advance that the benefit plan (voluntary) was in fact an ERISA plan. Also, you should know that I have always been a big proponent of such plans.

By: Cindi

Cindi — Fri, 06 Feb 2009 16:32:18 +0000

I am an HR consultant (SPHR), and an Aflac representative. When a company signs its agreement with Aflac, the company is contractually assured that there is no liability to the employer regarding claims. All disputes are handled directly between the employer and Aflac. As for Aflac agents being “landscapers yesterday and insurance agents today” (Ray), all Aflac agents have to go through the same licensing process as other agents, and Aflac has a stringent training program that new associates must go through. New associates work closely with an experienced agent until they are able to work on their own.

There are people in any industry who are incompetent. Business owners should be sure they are comfortable with the person they are working with, and make them accountable.

As a side note, in my former job we offered Aflac to our employees (200+). They loved the benefit, and the administration was not a problem at all. When I started my own business, I wanted to sell Aflac as one of my services because we had such a great experience.

By: HR in GR

HR in GR — Fri, 06 Feb 2009 14:46:50 +0000

I have to agree with Kevin…..As a former manager (14 years) for the leading voluntary benefit company, I NEVER told an Employer that the benefits were not an ERISA plan nor did I tell an ER what I thought they wanted to hear. As with anything you offer as an employer, there will always be someone that complains or has a problem or concern.
Guess how many BC/BS problems I am forced to try and help our team with. Because I was in the insurance world for eighteen years and in mgmt for 14 of them, I am able to see both sides of the coin.
For those of you wishing to point fingers at the AFLAC agents, note that the article mentions CIGNA, not AFLAC.
There are idiots representing every insurance company. Be careful who you work with and call references (any qualified agent should provide you with company names and contacts).

Supplemental benefits can be a life saver for those working paycheck to paycheck, especially with families. When offered properly and professionally, these programs enhance even the best major medical plans, not to mention the HDP’s that are becoming ever so popular.

By: Kevin Coates

Kevin Coates — Fri, 06 Feb 2009 03:03:37 +0000

I am an insurance broke that has been selling core and voluntary benefits since 1974. I market my services to large groups and municipalities. Not once have I had a client sued by an employee over benefits provided through a voluntary insurance carrier. This “chicken little” approach to voluntary benefits, and the supposed solutions won’t do anything to minimize the liability of a dispute.

Why stop at voluntary benefits? Offering any benefits at all creates liability. Implementing Section 125 plans, HSA programs, HRA plans, etc.., all create liability for the employer, if an employee does not feel that he/she has received the benefits that they are entitled to. Heck, offerins sick pay, vacation days, personal days, all of these benefits are at least as adminstratively burdensome as voluntary benefits, and all come with liability attached. The best way to protect yourself and your company is to make sure that your liability insurance coverage includes benefit disputes. Otherwise the only way to eliminate a company’s liability is to shut the doors.

By: Sue

Sue — Thu, 05 Feb 2009 20:28:17 +0000

We have offered AFLAC products for years and have never had a problem. Our representative is extremely professional and as far as I am aware, has never done lawn work. In fact, she has represented AFAC for at 15 years. We have always made it clear it is completely voluntary and there is no pressure to buy their products.

By: Leon

Leon — Tue, 03 Feb 2009 00:14:58 +0000

I finally gave in to employee requests and allowed AFLAC to come in and sell to our employees. Although I think our employees’ could get more bang for the buck in an Flexible Spending Account or in the 401(k) plan, the employees really seem to appreciate the fact that we responded to their requests.

So far – so good.

By: Angel M

Angel M — Fri, 30 Jan 2009 16:35:01 +0000

When I started working here, we had a benefits specialist, now with downsizing, I am also in charge of benefits and administering voluntary plans are a hassle…

By: Shanna

Shanna — Thu, 29 Jan 2009 22:11:09 +0000

I understand the inherent risk involved with voluntary benefits, but after 23 years working in HR and partnering with voluntary benefit providers each of those years, I have a different perspective. Relationships between an employer and voluntary benefits provider can be successful – not to mention a great benefit enhancement for employees. There is risk in just about everything HR deals with and a good example is the millions of employers who outsource payroll processing, but are still 100% liable for the any errors the outside vendor may make. There is huge potential liability, yet obviously many choose not to bring payroll processing in-house. Take the time to do the research, weigh the potential risks verses the potential benefits and then make an informed decision based on your company’s situation