Can Your Employees Survive the Financial Crunch of an Illness ?

As the population ages, a big question employers must start asking is: “Can their employees survive the financial crunch of an illness? ”

In most cases the answer is no. 95% of Americans live paycheck to paycheck and now need two incomes to provide for their families. What happens when one of the spouses becomes critically ill and unable to work?

The income drops for the person that is sick but the healthy employee/spouse is strained by the emotional and financial issues they must now address.

Employers can help there employees with these issues through a fundamental shift in insurance policies provided. Over the past 50 years Employers that have provided what was considered the ultimate package of benefits have provided the following:

Medical Insurance
Group Life Insurance
Shot Term Disability
Long Term Disability
Dental
Vision
401K

An employee that is provided with these types of benefits was considered to be fully insured and covered. But a Harvard Bankruptcy study shows that a family that makes $90,000 with 2 incomes will face Bankruptcy when one spouse faces a catastrophic illness and the other needs to take time off to attend to that spouse’s needs. The income of the family drops from $90,000 to $50,000 within weeks and the family can no longer pay their bills.

The solution is to realign the money spent on insurance to protect the income of the employees through supplemental income insurance.

Using the same dollar amounts Employers can realign the insurance package to be re-allocated to the following:

Medical Insurance
Group Life Insurance
Short Term Disability
Long Term Disability
Supplemental Income Protection
401K

Using this model of replacing the Dental and Vision insurance with a Supplemental Income Protection, the employee is now financially ready to face a catastrophic illness.

Employers do not have to spend any extra money to implement these plans as they are employee contribution plans and the Employer saves on Pay roll Taxes.

Implementing Supplemental Income Insurance is not only the right move for employers to make; it insures the employees and the business. The benefits will provide not only financial viability but they are a tax benefit to the employer.

Another benefit to the business is that employers not currently offering Medical benefits through tax free dollars can implement a 125 Plan and provide all the current benefits in addition to income Insurance at no net expense to the employee.

Contact Information

Donald Griffith

Business Consultant

Teach and Build Wealth LLC

Contact via E-mail