Insurance Agent Forum

[Delta76]

Sometimes it's fun when the numbers work out any you can really help people. I came across a small business this morning with five IFP policies, all extremely low $300 deductible plan, and with an uncompetitive carrier, paying $51,000 AV for all five people.

Savings:

1. No Sect. 125 plan in place, the whole portion is being taxed. Meaning the business will save 7.5% on their half of the FICA on all $51,000 or $3825 per year. The employees will save the same $3825 on their half of the FICA, plus on income taxes off the $51,000. If everyone is in the 30% tax bracket between state and federal taxes, that's another $15,300. That's a total of $22,950 between the employees and the business just by putting in a Sect. 125 plan. That's huge on it's own.

2. By raising the deductible to $2000-100% from the $300-80%, that will free up $27,700. They can put in an HRA to reimburse the employees up to the full deductible, effectively giving them 100% coverage, even better than they have currently. The total deductilbe for everyone is $14,000, so even if everyone in this fairly healthy group maxed out their deductible, the business has a guaranteed savings of $13,700 and they give their employees better coverage.

3. Plus, whatever portion of the $14,000 in deductibles the business agrees to reimburse as needed that goes unused stays with the business. A conservative estimate with this group is a likely additional savings of $10,000.

So in all, the business and employees are guaranteed to save a minimum of $36,650, but it will likely be over $47,000. I also get to write about $20,000 in AV from the health premiums, plus they want a group dental plan, and I'm going to look into their life insurance coverage as well. The funny part is when I stopped out this morning, they told me they usually screen their calls and I just happened to call at the right time. If they hadn't taken my cold call three weeks ago, they would likely be out $47,000.

[moonlightandmargaritas]

Well that's certainly a home run Matt!

Maybe it'll keep you warm over the long, cold winter?

It's a good feeling when you can bring superior value like that, and put a few shekels in your pocket as well. Good job. Keep up the great work. Stay warm...

[Delta76]

Maybe it'll keep you warm over the long, cold winter?

Now that's the real challenge. I finally quit running outside the last couple days with snow on the ground and had to move to a treadmill, which I absolutely hate!

[moonlightandmargaritas]

Originally Posted by Delta76

I finally quit running outside the last couple days with snow on the ground and had to move to a treadmill, which I absolutely hate!

Not to rub it in, but Tampa today was sunny and about 85. Playin' golf tomorrow afternoon, and some tennis (outdoor) on Saturday morning...

Not to worry...you've only got about what, six or seven months to go?

How's the ice fishing?

[Salary_Guard]

haha, I had to come inside today, it was to hot in the sun. I was going to fix the latch on the fence gate, but I didn't want to get sweaty in the sun.

Congrats on the nice deal though.

[Delta76]

Keep it up, I may just show up at your front door looking for a place to stay for the next seven months.

[Bob_The_Insurance_Guy]

Two excellent points that need not be overlooked:

He saved the employer on taxes. Employers really could care less about saving money. It's their tax exposure that is of great consequence, and a consultative professional that shows them how to do this will garner some time.

He increased the employees responsibility for their own healthcare, by raising their deductible, and putting them on a HRA (personally, I would have done a HSA, but...). This means the employee now has the "power" to shop for the best value for their healthcare services.

Better than the "let's see how low we can get your monthly premium this year", dime a dozen rep.