Employee Benefits 2011: Back to Basics

Employee Benefits 2011: Back to Basics

Achieve Financial Group, LLC(Press the Space Bar to advance each slide. This presentation

does not feature a voice component.)

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One Simple Question

• What are the top priorities for my limited insurance dollars?

For specific questions on Life or Disability, please contact Achieve Financial. Achieve is not authorized to advise you on your medical insurance.

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What are the top priorities for my limited insurance dollars?

• No one has unlimited money to spend on insurance.

• While insurance still protects against future risk, it is possible to be over-insured.

• How do I know if I’m doing the best for my family?


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What are the top priorities for my limited insurance dollars?

• First, there is not just one right answer for everyone.

• That being said, most financial analysts agree on three top priorities:– Medical Insurance– Life Insurance– Disability Insurance


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MEDICAL INSURANCEPriority #1 of 3:


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MEDICAL INSURANCE

• Your district offers TRS Active Care.• Most employees spend less than 30

minutes per year deciding on their employee benefits package.

• If you want to lower costs, consider your options, and take a serious look at the different plans this year.

• If you are generally healthy, and if you have funds to pay for a higher deductible, you could save LOTS of money in premiums by going to a higher deductible medical plan, like Active Care 1 or Active Care 1HD.

• Investigate at: http://www.trs.state.tx.us/active.jsp?submenu=trs_activecare&page_id=/TRS_activecare/plans

High medical costs combined with the possibility of developing a serious medical condition make medical insurance one of the best ways you can protect yourself and your family against financial devastation in the event of a medical catastrophe.


http://www.trs.state.tx.us/active.jsp?submenu=trs_activecare&page_id=/TRS_activecare/plans



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LIFE INSURANCEPriority #2 of 3


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LIFE INSURANCE

• Your district offers Group Life Insurance

• Purpose: to protect your survivors from financial loss in the event of your death

• How much? DIME:– Debt – Income times 5– Mortgage– Education

When considering how much life insurance you need, this easy acronym “DIME” is helpful. Debt means consider those large debts you pay. Would your spouse be able to still make those payments? Leaving enough money for him/her to pay off debt and start fresh is helpful.Income x5 means you are giving your survivors 5 years to adjust to not receiving your salary, give or take any big final expenses, like medical bills, they may have to pay.Mortgage means you leave enough money to pay off the houseEducation means allowing money to pay for higher education for yourself, your spouse, and your children.


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GROUP LIFE

• Group Life:– Low group rates– Age banded (every 5 years)– Intended for your working years– Not intended to carry you into

old age!– Portable (can take with you at

same group rates if you leave employment)

– Convertible (can convert to individual whole life if you leave employment)

– Name: MetLife

Other notable features of your Group Life Policy include: - Accelerated Life Benefit (allows you to receive a partial payment of your benefit if diagnosed with a terminal condition while covered under this policy.) - Accidental Death and Dismemberment Benefit at no additional cost (provided by your school district in the amount of $10,000 on employee only)


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DISABILITY INSURANCEPriority #3 of 3:


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DISABILITY INSURANCE

• Your district offers Long Term Disability (LTD) Insurance

• Purpose: to make sure you still have a check coming in if the doctor says you can’t work due to sickness or accident – salary protection

• The more you “need” your paycheck for vital expenses, the more you need LTD insurance, and vice versa.

• If your salary is just for “fun” money, you don’t need LTD.

• Find a balance between how much it costs per month and how much benefit you would need each month just to get by – this is the “best bang for the buck” zone.

Why is it called “Long Term Disability”? Do we also have “Short Term Disability”? - “Long Term” means it will keep paying you a check each month for a long time if something serious happens to you. (See brochure for details) - The Long Term Disability Insurance offered by your district also serves the same purpose as Short Term Disability insurance would serve: you can choose shorter elimination periods so that benefits kick in right away (like STD), or you can choose longer elimination periods to lower your monthly cost for this insurance. - So no, we don’t need to offer STD! - Most people choose the 30-day elimination period because it costs less but offers FIRST DAY HOSPITAL benefits if you are admitted overnight to a hospital.


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What about the other kinds of insurance?

• Medical, Life, and Disability insurance make up your core insurance products because what they protect against – catastrophic loss – has a bigger chance to devastate most families.

• Other benefits like cancer, dental, and vision insurance, are discretionary. They do benefit some people in specific situations, but not everyone needs them.

• Tip: If you are needing to cut expenses due to serious financial issues, discontinue the discretionary products first over the core products, but…


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Help for your Bottom Line

• Even though you may think about discontinuing one or more discretionary products, you need to know how the Cafeteria Plan helps you.

• EXAMPLE: on the next 3 slides you will see an example employee who saves over $2,700 per year just by choosing the free cafeteria plan service. Pre-taxing your eligible premiums helps you bring home more money!


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How the Cafeteria Plan HelpsSample Based on salary of $40,000 with M-2 withholding. Monthly.

WITH Pre-Tax DeductionsEmployee Gross Pay $3,333.33

Pre-Tax Monthly Deductions:

TRS Active Care 2 E/F $860.00

PPO Dental E/F $99.96

Vision E/f $25.85

Health Care FSA $100.00

Flex Card Fees $1.50

PRE TAX TOTAL DEDUC: $1087.31

Total Taxable Income $2,246.02

Without Pre-Tax DeductionsEmployee Gross Pay $3,333.33

Pre-Tax Monthly Deductions:

0.00

0.00

0.00

0.00

0.00

0.00

Total Taxable Income $3,333.33


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WITH Pre-Tax DeductionsTaxes Withheld

TOTAL TAXES WITHHELD (includes FW, Medicare, SS)

$347.19

POST TAX MONTHLY DEDUCTIONS:

Voluntary LTD $61.88

Employee Life $33.00

Children Life $3.20

0.00

0.00

0.00

TOTAL POST TAX DEDUC: $98.08

Without Pre-Tax DeductionsTaxes Withheld

TOTAL TAXES WITHHELD (includes FW, Medicare, SS)

$680.45

POST TAX MONTHLY DEDUCTIONS:

TRS Active Care E/F $860.00

PPO Dental E/F $99.96

Vision E/F $25.85

Voluntary LTD $61.88

Employee Life $33.00

Children Life $3.20

TOTAL POST TAX DEDUC: $1083.89


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WITH Pre-Tax Deductions• Referring to the details on

the two previous slides, this employee receives a net pay of $1800.75.

• Just by pre-taxing all possible deductions…

• This person brings home $2,781.12 more per year!! That’s more than a month’s paycheck!

Without Pre-Tax Deductions• Referring to the details on

the two previous slides, this employee receives a net pay of $1,568.99.

• By not sheltering premiums, this employee is giving away $2,781.12 per year to the U.S. Government that he/she could have brought home instead.


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Achieve Financial is here to help

• You can call, click, or come by our office; we are here to help you.

• Thinking of retiring? Set up an appointment with Greg or Henry to discuss it.

• 800-278-8994• www.achievefinancialgroup.

com/pleasantgrove

• [email protected]

• [email protected] For specific questions on Life or Disability, please contact Achieve Financial. Achieve is not

authorized to advise you on your medical insurance.

http://www.achievefinancialgroup.com/pleasantgrove

http://www.achievefinancialgroup.com/pleasantgrove

mailto:[email protected]



Employee Benefits 2011: Back to Basics

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