The Benefits Life Cycle
Presented by:
Paul F. Love, CLU, ChFC, CLTC
Foster, Soltoff & Love, Ltd.
6550 Rock Spring Drive
Suite 190
Bethesda, Md. 20817
(301) 564-2966 x1107
pflove@fslbene.com
Foster Soltoff & Love, Ltd.
Phase I (0- 2 years)
2-9 Employees
Basic Medical Coverage
•HMO
•Point of Service
•Preferred Provider Organization
•COBRA
Foster Soltoff & Love, Ltd.
Phase II (2-5 years)
10 – 25 Employees
Core Benefits:
Comprehensive Medical
•HMO
•Point of Service
•Preferred Provider Organization
•Follow the Platinum Rule
Dental Benefits
Vision Benefits
Foster Soltoff & Love, Ltd.
Phase II
Core Benefits (Cont’d):
•Group Life Insurance
•Group Short Term Disability
•Group Long Term Disability
Foster Soltoff & Love, Ltd.
Phase II
Core Benefits (Cont’d):
Qualified Retirement Plans
•SINGLE K
•SEP/IRA
•SIMPLE IRA
•Money Purchase Plans
•401(k) / Profit Sharing Plan
•Non Matching
•Safe Harbor
Section 125 Plan
•Premium Only
Foster Soltoff & Love, Ltd.
Phase III (5+ Years)
26 - 99 Employees
Section 125
•Medical Expense Reimbursement Plans
•Dependent Care
Executive Benefit Plans
Voluntary Payroll Deduction Plans
•Supplemental Life
•Short Term Disability/Critical Illness
•Prepaid Legal
•Pet Insurance
Foster Soltoff & Love, Ltd.
Phase III (5+ Years)
26 - 99 Employees
Employee Assistance Programs
• Confidential 24 hour access to personal problem
solving resources, consultation and referrals
• Issues include:
•Childcare
•Eldercare
•Crisis Management
•Educational Issues
•Consumer Information
•Financial Issues
•Worksite Issues
• Estimated 3-4% Payroll savings through reduced absenteeism
Foster Soltoff & Love, Ltd.
Phase IV (5 + Years)
> 100 Employees
•Partial Self-funding of Health Benefits
•Section 529 Educational Savings Plans
•Supplemental Disability Insurance
•Pension Disability Benefit
•Long Term Care Insurance
Foster Soltoff & Love, Ltd.
Methods of Restructuring
Benefit Plans
for Affordability
Foster Soltoff & Love, Ltd.
THE PROBLEM

9.7% Average Annual Premium Increases Between
2002 and 2012 in Fully Insured Plans

Avg. Premiums- $5,615 Single $15,745 Family

Less than 50% of firms with 3-9 employees offer
coverage

Since 2002, Health Costs have Increased 97% vs.
Inflation at 28% and Wage Growth at 33%
Source: 2012 Summary of Findings -Kaiser Family Foundation
Foster Soltoff & Love, Ltd.
Some Solutions
•Higher Co-payments, Deductibles,
Out-of-Pocket Maximums
• Prescription Drug Benefits
•Alternative Funding Methods
• Partial Self Insurance
1. Medical
2. Prescription Drug Benefit
3. Short Term Disability
Foster Soltoff & Love, Ltd.
Some Solutions
Health Savings Accounts
• Created by the 2003 Prescription Drug Act PL No. 108173 as amended by the Tax Relief and Health Care Act
of 2006
• Creates savings accounts with maximums coupled with
high deductible major medical plans
• Employee/employer contribution (2013 $3,250 single,
$6,450 family)
• Lesser of 100% of annual deductible or
Individual-min. $1,250-max $3,250
Family- min. $2,500-max. $6,450
• Catch-up contribution ages 55 or over (2013 $1,000)
• Amounts grow income tax free and are withdrawn
income tax free for qualifying expenses.
• Can be rolled over year to year
• Accounts are portable on termination or retirement
Foster Soltoff & Love, Ltd.
Some Solutions
Health Savings Accounts
Issues:
•Providers do not understand how the plan works
Set up and maintenance fees
Must be coordinated with spouse’s health plan
Foster Soltoff & Love, Ltd.
Some Solutions
• Defined Contribution Medical Plans
• Health Reimbursement Accounts (HRA)
• Review Money Purchase Plans
versus 401(k)/Profit Sharing Plans
Foster Soltoff & Love, Ltd.
FINALLY…..
Review plans annually
 Benchmark against competition
 When costs increase, make
incremental changes in benefits and,
employee contributions
 Choose a consultant who can work
with you as you grow.

Foster Soltoff & Love, Ltd.