Insurance Insights: The Cleary Insurance Blog
The Cleary Insurance blog covers insurance, risk management, and financial planning for New England businesses and individuals. Our team of licensed advisors and specialists publishes regular articles on commercial and personal coverage, employee benefits, life and financial planning, and insurance compliance. Browse recent articles below, or use the category filters to find topics relevant to your business or personal situation.
Captive Insurance Programs
Captive insurance programs are an alternative to standard insurance protection. They are not new; but they are getting a lot more attention now than they had in the past.
Captives can provide the highest quality insurance protection for its owners. By banding together to create a true sharing of risk, the shareholders of a captive can control their insurance costs and avoid the volatility of the traditional insurance industry. Additional benefits are created through the increased assurance of coverage, the stabilization of premiums, and the improved management of risk through effective loss control and claims management.
Captives were created to satisfy the need of companies to obtain casualty insurance coverage at a predictable cost. They started when companies perceived that the commercial insurance industry was not responsive to their risk needs. The goal of these business owners was to:
- Increase buying power
- Allow member companies many of the same advantages of control generally afforded to only the largest companies
In addition to the tax deductibility of premiums paid into a captive, there is also the opportunity for the members to share in the underwriting profits and investment income of a captive.
Well run, financially stable, low loss frequency companies make ideal candidates for a captive alternative. If you are wondering if a captive alternative is for you, please call Mike Regan at Regan Cleary Insurance.
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. We are members of the National Association of Surety Bond Producers (NASBP), the professional organization for agents that also specialize in surety bonding. Give us a call today at 617-723-0700.
SCA Contracts
The DOL has sufficient funding to hire over 200 full time additional Wage & Hour Investigators. The funding was provided over the past several years by the American Reinvestment & Recovery Act (ARRA).
Timothy J. Helm, Chief for the Branch of Government Contracts Enforcement for the Wage & Hour Division of the DOL has been responsible for the hiring and training of these individuals. According to Mr. Helm and his staff, open investigations are at an all-time low as a result of the additional investigators. At the quarterly Professional Services Council (PSC) Labor Relations meetings, Mr. Helm spoke of violations following a DOL audit, mentioning that his goal is to debar contractors instead of negotiating settlements with them.
We have been encouraging contractors, as a result of the above, to ensure that all their personnel dealing with these Service Contact Act (SCA) and Davis Bacon Act (DBA) contracts have the appropriate training to handle DOL audits. If contractors have not had all their respective personnel properly trained, they should make sure that this is done as quickly as possible.
We have been coordinating Service Contract Act training programs for the PSC Association three times a year, and these will continue in 2012 in March, June and November. We have also designed a one-day Davis Bacon training program that will be held in early April 2012. The DOL Wage & Hour staff has agreed to participate in this training, as they have always done with the SCA programs.
Additionally, MARAL, LLC has been offering SCA and DBA one day training programs in Rosslyn, VA and at client locations for the past several years. Their schedule and registration procedures can be found on www.eventville.com/maral or e-mail Al Corvigno at acorvigno@marall.com.
Some contractors are reluctant to provide their employees working on SCA or DBA contracts the appropriate fringe benefits listed on their respective Wage Determinations. In lieu of providing the fringe benefits, they choose to pay a cash value. While this meets the minimum legal requirement, it actually increases the cost to both the contractors and the employees due to the taxable implications.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe benefit obligations and provides your employees with valuable benefits.
Voluntary Benefits
In previous years, employers offered voluntary benefits to retain employees, attract strong candidates and boost morale. They weren’t as popular as they are now. Since there has been significant growth in economic pressures, most employers want to use these benefits because the plans have no direct costs for them. However, employers’ costs aren’t the only benefit. Many employers offer these benefits because their employees are able to afford them. The same employees may not be able to afford similar benefits on their own.
Advantages of offering voluntary benefits include:
1. Desired Benefits
Employees usually ask prospective employers about disability, life, health and dental benefits. It’s always beneficial to be able to offer good prospective employees the benefits they desire.
2. No Employer Expenses
The only thing better than being able to offer employees the benefits they desire is being able to do so without paying much. The payroll tax savings gained from Section 125 offsets the administrative costs that are often associated with voluntary benefits.
3. Group Rates
Since the rates are calculated for a group, individual costs for employees are lower. This means that employees are able to enjoy the same great benefits they desire for an affordable cost. Employees enjoy the benefit of paying less upfront for costly medical procedures or illnesses. If a serious illness or accident occurs, plan members receive cash benefits. These benefits may be used for groceries, travel, living expenses or other expenses related to the medical issue.
4. Lower Employee Turnover Rates
Employers who offer better benefit packages to their employees enjoy a low turnover rate. Good benefit choices also attract good prospective employees. When employment levels are high, it’s essential for employers to have the best benefit offerings to attract the best job candidates.
5. No Secondary Market
Some of the best programs are only offered in plans that are sponsored by employers. This aspect is also more attractive to prospective employees because they can’t obtain the same insurance coverage without working for the employer who offers it.
6. Fosters Goodwill
Employees appreciate employers who show that they care enough to offer good benefit options. This shows employees that the employer cares about their individual needs and the needs of their families.
7. Good Underwriting
Most individuals are not able to find life or disability coverage on their own. This is especially true for individuals who have a medical history that is not favorable. Voluntary benefit plans have simple underwriting requirements. They are also guaranteed without any health questions.
As business owners seek better ways to manage healthcare expenses, they also seek more flexible benefit choices. In addition to reducing costs to employers, voluntary benefit plans reduce FICA contributions. Whether employers offer indemnity, discount or insurance, voluntary benefits are the best choice for employee relations, employee retention and company savings.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.