Federal Employee Benefits – The Life Insurance Coverage

September 23, 2015

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If you are a federal employee, it is important to understand your benefits package to ensure that your income is adequately protected in the event that something should happen to you.

The U.S. government does a very good job of compensating those who work for the federal government. However, as with other employee benefit plans at some of the private sector businesses, the benefits available to employees do not adequately cover the family in time of need. That is why it is important to review the benefits packages and determine if there is a need for more coverage.

For instance, closely examining the FEGLI (Federal Employees Guaranteed Life Insurance) program, there are four major areas where the benefits are deficient.

1. The FEGLI program is a term insurance program only. There is no cash value available to the employee to borrow against for emergency needs. Term insurance is pure insurance in which a death benefit is available to the family in the event of death to the breadwinner. There is no cash value which accumulates in the policy.

2. Under the FEGLI program, the life insurance only covers the employee and his family only during the time that the employee is employed for the federal government or the face amount will reduce tremendously upon retirement.

Term insurance covers the family in the event of death of the breadwinner, but only during a specified period of time. Generally, the policy will cover the family for 10, 15, 20, 25, or 30 years, depending on which insurance company the family elects to sell them a life insurance policy. An insurance agent will recommend term insurance to cover short term needs, such as a mortgage which will be paid over a 30 year period.

3. Federal employees will find that their premiums for their life insurance will increase with age and salary increases, but the coverage decreases. This is called increasing premium term insurance, which becomes very expensive in later years, when there is more of a need for life insurance.

4. In the event that the employee becomes disabled, he/she may not be able to continue paying for life insurance, since the employee is not collecting wages.

I cam across this comment on a blog paost which illustrates why federal employees need a periodic review of their policies:

“My mother worked for the Federal government for over 30 years and had the FEGLI plan and passed away and my sister and I will be splitting a little over 5,000 dollars. When my father (mom was divorced) passed his insurance was with the state and my brother and I split over 50,000 dollars. What’s wrong with this picture?? Our government is so screwed up and you know that all those senators, etc. won’t have that cheap of insurance and we are paying for it. My mom worked hard those 30 years and sure didn’t get all the perks and paid vacations.” madashe*l, from Life Insurance: “The Good, the Bad, and the Ugly.”

These are problems which the employee must resolve in order for the family to be financially protected in the event of his/her death. Boston Mutual offers solutions to these problems with products which are specifically designed to meet the needs of federal state, municipal, and postal workers. For a free booklet explaining your options, please use the contact form to request the FREE brochure,

    Legacy Life Select: Permanent Life Insurance for Federal, State, Municipal, and Postal Workers.

Please copy and paste the title into the contact form.

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The Right to Reduce Employee Benefits

February 20, 2015

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Employers who are facing poor financial conditions may reduce the benefits which they offer employees, but there are guidelines which they must follow.

Generally, an employer cannot reduce benefits by more than fifteen percent. If the employer reduces the benefits by more than fifteen percent, the employees is entitled to leave the employer and sue for damages. Because reducing the benefits produces hardship for the employee, he/she has a right to ask the employer to reinstate the benefits, or ask for compensation in order to purchase a plan on their own. At times, employees accept a job with benefits as an inducement to take the job. A situation such as this would strengthen the employee’s position.

The Federal government has set down guidelines for reducing employees’ benefits and laying off employees. Additionally, each of the states have their own guidelines and it is important for the employer to investigate the guidelines and ensure they are acting within them. The only exception to this would be that if the employer promised certain benefits for a certain amount of time, the employer would not be able to change them. Therefore, employers should review the laws in their own state as well as the laws of the Federal government relative to reducing employees’ benefits.


Blog Talk Radio – Substance Abuse and Mental Illness on the Job

January 5, 2015

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As families become more stressed due to the struggles of a single parent trying to maintain a household and a full-time job, heads of households become more at risk for mental illnesses and substance abuse.
Many employers are discovering the benefits of addressing the issues of mental illness and substance abuse on the job by offering assistance through the Employee Assistance Programs. Find out more about this program which airs tomorrow and sign-up to receive notices of more programs below:

https://www.eventbrite.com/e/substance-abuse-and-mental-illness-on-the-job-employee-assistance-programs-tickets-15139834653?ref=eweb


Catching the Wave – Adjusting to the Health Care Reform

October 14, 2013

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Business owners are facing tough decisions on whether they should offer health care benefits to their employees.  Business owners with under 50 employees are not obligated to offer health care benefits to their employees under the new Health care reform.  However, there is an incentive if they do. 

Any business owner with under twenty-five employees is now eligible for a thirty-five percent tax credit for 2013 and fifty percent for 2014.  It would be advisable for business owners to contact their accountants for the tax consequences.

This would be a good incentive for business owners to offer the health care benefits to their employees, however, most say they cannot afford it.  In that case, the employee would be able to shop for health insurance on the exchange.  If the employee cannot afford it, they would be eligible for a subsidy from the federal government if their income falls within four times the poverty level or $44,000.

If the employee still cannot afford the insurance premium after the subsidy, they can apply for Medicaid.  However, they must fall within the income guidelines in order to qualify for Medicaid.

Studies have shown that employees become more loyal, productive, and experience job satisfaction when they receive a comprehensive benefits package from their employer.  In return, they offer better customer service, take fewer days off, work more efficiently, tend not to complain as much, discover ways of being more effective, and are more enthusiastic about their work.

Since Massachusetts implemented the health care reform seven years ago, economic growth has increased and unemployment is still low.  Additionally, 90% of the people have health care and more are practicing preventive measures in their health.   Small business owners can now acquire health insurance for their families while they are building their businesses.  Because much of the overhead costs of selling insurance, premiums are lower.

In conclusion, the health care reform will help to improve employee morale and health and will help business owners to grow their businesses.


The Future of Health Care Plans

September 21, 2013

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We are in the midst of transitioning to a new Health Care Reform where employees are going to have to choose a health care provider, if they currently do not have one.  As with any new procedure, there are going to be new decisions that have to be made about their health care.

By October 1, employers are now responsible for education their current employees about their health care choices and the availability of health coverage on the exchanges, if the employer opts not to provide health benefits to the employees.  Then they must post legal notices on the premises for new employees.

The employees must then visit the exchanges on-line and shop around for an insurance plan.  Each state has their own website.  For most employees this task could be overwhelming, as there are sixteen different plans available in the state of Rhode Island.  Some will not understand the different insurance terms and some may not have the patience to shop for coverage themselves.

The state has a staff available to answer questions and the site is very user friendly.  Employees have three months to choose a plan which would be effective on January 1, 2013.  Employees are expected to choose a lower priced plan with high deductibles and co-payments, rather than a plan with a low deductible and co-payments. 

This may put a strain on the budge when utilizing the services.  However, there are other plans available outside of the exchanges, at affordable prices, which would enable the employees to pay most if not all of their medical bills.

For anyone who wants more of an explanation on the details of the health care reform and the responsibilities of the employees and the employers, there will be workshop sponsored by the Chambers of Commerce and other organizations.  For a complete schedule of the locations, go to the Health Source RI website.