J&D Benefits Perspective

Preparing for Travel Abroad

Kathleen A. Dugan, Chief Operating Officer, Johnson & Dugan

In light of recent concern over the Swine Flu virus and traveling abroad in general, below are two websites that are very good for all travelers to review before leaving the country. The sites will also direct visitors to the CDC, as well as travel alerts for all countries. Additionally we have been getting many requests for travelers who need to purchase travel insurance for themselves or family members. Between the two websites there is a wealth of information that may be useful for your employees.

Travel Health Online: Register at https://www.tripprep.com

This site is for travelers who wish to find out about everything from what immunizations are needed for the Countries being visited, which Countries have possible quarantine restrictions, travel alerts, Visa requirements, Centers for Disease Control (CDC), and links to government websites of importance.

Cracks in Your Nest Egg…are you prepared for living a long life?

Kirk Dryden, CLU ChFC, Johnson & Dugan

According to a recent article in the Wall Street Journal, the biggest mistake people make with their retirement savings is failing to consider long-term care needs. Long-term care topped inflation, taxes, taking advantage of years immediately before retirement and underestimating life expectancy. The real problem lies in most people fail to consider “nonmarket-related threats – health care, long-term care – the catastrophic events” that can cause as much harm, or more, as a volatile stock market.

The bad news is over 60 percent of us will need long-term care during our lifetimes. The reason is interestingly simple due to an aging population living well into their 80’s with limited resources to pay for LTC expenses. The cost is prohibitive for most people, exceeding $60,000 per year nationally. Moreover, your health insurance and Medicare pays for less than 14% of these related costs.

The good news is long-term care insurance offers policy owners a huge menu of benefits that can be used once an individual is deemed to have a chronic health condition by a licensed health professional. The coverage will pay for care, which is provided in your own home or an outside facility. Better financial news is most of the premiums are tax-deductible to a business, the premiums are generally not included in your income and the benefits are paid tax-free.

Long Term Disability & State Mandated Disability Programs

Christiana Lu, Account Manager, Johnson & Dugan

Why invest in Long Term Disability benefits for your employees? Most employers in our marketplace understand that LTD is an essential component of a comprehensive benefits package. However, many employers still believe that state and federal disability programs (i.e. Worker’s Compensation, California State Disability, Social Security) will provide adequate coverage for their disabled employees. Why do they need to supplement a benefit that is already provided by the government?

First, employers must realize that the state disability insurance programs (SDI) typically only provide around 55% salary replacement while disabled. Additionally, the state disability benefit is capped at a state mandated maximum; California’s SDI maximum is $882 per week, which only insures an annual salary of $83,389. All those employees who earn more than $83,389 annually would receive less than 55% of their pre-disability earnings while on disability. SDI Fact Sheet Could you maintain your current standard of living with 55% of your pre-disability income? Lastly, the maximum benefit period where benefits are payable for SDI is 52 weeks.

Benefits Can Improve Business Success

Employers realize strong benefits can attract great talent and retain key employees, thus reducing turnover cost. Some, like those recently recognized for successfully balancing employee benefits with corporate performance, even understand that benefits done right can improve the company’s bottom line.

5-Year Benefits Outlook

Employers’ Commitment Remains Strong

Despite increasing economic pressures, U.S. businesses overwhelmingly view employee benefit programs as important to competing effectively in today’s marketplace, according to Prudential Financial’s new study, Employee Benefits: 2006 & Beyond. The results suggest that many plan sponsors are looking at new and innovative ways to better balance cost objectives and maintain competitive benefits programs.