It's no secret that employee benefits are among the most essential elements in recruiting and retaining top talent. A recent survey by Combined Insurance, an Illinois consulting and insurance firm that works with small businesses, found that 71 percent of workers said benefits were a factor in signing on with their current employer.
"Employees increasingly expect employers to be sensitive to their individual needs," says Dennis Ontaneda, the firm's director of sales and finance administration. "They want personalization--benefits for a group of one--that meet the needs of their family and stage in life."
What is a secret--or at least, something of a mystery--is which benefits will fulfill those individual needs. "Supplemental insurance," "guaranteed renewable," "workers' comp"--insurance jargon can be
confusing, to say the least. So here are some of the essential terms, for both employers and employees. --Kara Ohngren
Critical Illness Insurance
A type of supplemental health insurance that pays a lump-sum benefit when a critical illness or condition is diagnosed.
Disability Income Insurance
Also called income protection insurance, this coverage provides regular income if the employee becomes disabled. Short-term disability income insurance provides benefits for six months to two years.
This provision in a life or disability insurance policy requires the insurer to renew the policy on its anniversary. The premium can usually be changed if the change applies to the entire class of employees.
Supplemental Life Insurance
This coverage provides additional funds for beneficiaries after an employee's death.
This supplemental insurance pays benefits directly to employees, and covers expenses beyond those covered in a primary insurance policy, related to treatment after an accident.
The person or group who solicits or negotiates insurance contracts on behalf of an insurer. Agents can be independent or employed by an insurer.
Best's Insurance Report
The industry's standard tool, published by A.M. Best Inc., for measuring insurers' financial integrity and managerial and operational strengths.
Major Medical Insurance
Benefits for most medical expenses (broader coverage than a primary policy). There may be limits set by the company, and employees may pay a per- centage of the coverage expenses.
These plans help pay for what major medical may not cover, such as life insurance or long-term disability insurance. The benefits are paid directly to the employee (or a beneficiary), not the medical provider.
Provides benefits required by state law, protecting workers who are injured, sickened or killed on the job. There are two basic coverages: Benefits for employees and employer's liability.