Business Insurance, Estate and Succession Planning

Business Insurance, estate and succession planning advice for business owners.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Team Blogs
    Team Blogs Find your favorite team blogs here.
  • Login
    Login Login form

What is a "hybrid" group benefit plan?

Posted by on in Business Insurance

Unbundling group benefits for savings and happier employees

Many organizations are looking at a new group benefit plan design that not only is better at engaging their employees but also saves money, money that can be re-directed into their bottom line. The plan design, called a “hybrid” group benefit plan, is a combination of traditional insured benefits and a healthcare spending account. Employers do not need to switch insurance companies, a hybrid plan is simply a re-design of the one they already have. The savings can be significant and are in the 10-20% range depending on the number of employees and the current plan design.

Most of the cost of a group benefits plan is in the medical, drug and dental side of the plan. However, large portions of these benefits are not being utilized by employees. Simply put, the return on investment (ROI), isn’t there. Dental plans and the coverage for medical practitioners such as chiropractic care, dieticians and podiatrists are underappreciated but paid in full by the company. Unbundling the plan and putting these dollars in an employee’s healthcare spending account allows the employee more flexibility and choice as to where they spend their healthcare spending account dollars.

The savings are found in two ways. First, the administration fee of a healthcare spending account is half the cost of the fee being charged by the insurance company for the traditional plan. Second, is that most employees will not use 100% of their healthcare spending account allocation, in fact many healthcare spending accounts operate at a 75% utilisation rate.

For example, if a company had 25 employees and they gave them each a notional healthcare spending account balance of $1000 the total liability to the business would be $25,000 annually, however history shows us that the actual utilization rate is closer to 75% or $18,750. Unlike an insured plan a healthcare spending account only pays for costs that are actually incurred.

The insurance portion, life, disability and critical illness, called the “pooled” portion of the plan, generally only represents 10-20% of the premium. A hybrid plan leaves the drug plan, major medical and supplies, and the pooled benefits, with the insurance company.

Continue reading
Hits: 511 0 Comments

Term Life Insurance - the second important feature most people forget - Convertibility

Posted by on in Business Insurance

The second important feature of most term life insurance policies is that it is convertible to a permanent, level premium policy without providing any medical evidence of insurability.


This is a great feature because as we age our health changes. The big three health issues are cancer, stroke and heart attack but there are lots of other health issues that develop as we age.


Once you own a term life insurance policy you have locked in your protection and your insurability. If you develop a health problem and are facing a big increase in your term life insurance you can convert some, or all of the protection to a level premium permanent policy.

Continue reading
Hits: 983 0 Comments

Selling a Business? Make it more attractive to buyers with key man insurance.

Posted by on in Business Insurance

Buyers are more comfortable when the sellers have insured themselves properly. It shows the buyer that they are serious about selling the business.


There are many unforeseen events that can put a business sale at risk. Some are easier to manage than others. Key man insurance is a relatively easy and inexpensive way to take risk off the table.


Key man insurance is simply life insurance on the key person in a business. In a small business, this is usually the owner, the founders or perhaps a key employee or two. These are the people who are crucial to a business; the ones whose absence would sink the company. These are the people the buyer wants to see insured.

Continue reading
Hits: 1476 0 Comments

Blog Archive


Blog List

Free Quotes - No obligation

Your Name
Please let us know your name.

Your Email
Please let us know your email address.

Please let us know your message.

Spam control(*)
Spam control
Invalid Input

Copyright © 2017. Nick Godfrey Business Insurance, Employee Benefits and Succession Advisors. Designed by Joomla Templates