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February 26th, 2014

A beneficiary designation is an immensely important decision.  Ensuring that your employees have both named a beneficiary and kept it up to date is paramount in showing your employees that you care about what happens to their families should anything happen to them.  Supplying the benefits is primary however employees tend to forget or take advantage of the Life portion of the benefits plan.  Talking to your employees and showing that you care about them personally can help foster an appreciation for these important benefits and you as an employer.

No Beneficiary

 Employees should be aware that if no beneficiary is named, in the event of a claim, the proceeds would be severely delayed and paid to their estate, incurring estate taxes and probate fees, shrinking down this non-taxable benefit significantly.

 Out of Date Beneficiary

 Life changes call for re-assessments of many aspects, a change of beneficiary should be included.  For example, young, single employees who start their career come onto the plan and perhaps name a parent as their beneficiary but a few years into their employment, marry and start a family.  Without updating the beneficiary, the proceeds would be paid to the employee’s parent and would leave his new family reliant on his parent to “share”.

 Naming a Minor

 A trustee should be named for any beneficiary under the age of 18.  The employee should consider having a lawyer draw up a legal trust agreement to ensure that insurance proceeds are used as intended.  The agreement should specify the age of the child(ren) when the trustee no longer has any right to the benefit.

 Contingent Beneficiary

 Naming a contingent beneficiary protects the proceeds should the primary beneficiary die before the insured.  The contingent beneficiary would only receive the funds in this circumstance.

 Summary

 Providing awareness of the potential consequences to your employees can help in building your relationship and ensuring that you’re getting the most out of your employee benefits plan.

 Please contact us for a list of your employees’ beneficiaries to review with them and guarantee that in the event of a death, the funds will be allocated as your employees wish.

September 13th, 2013

Due to the focus on rising costs of Extended Health Care and Dental, an easy way to provide a low-cost plan enhancement is to increase Life and AD&D benefits.  This shows that you’re thinking of employees and their families in the long-term and can boost employee morale and provide comfort and reduced stress to the employee with a minimum cost to employer.  Need another advantage?  Premiums are also tax deductible.  The average cost in Ontario for a funeral is between $5,000-7,000.  With more plans implementing a minimum flat $25,000 Life benefit, after paying final expenses, there's not much leftover for the remaining family members.  For an employee with a spouse and children, it shows that you’re thinking of their family when you increase their death benefits.  Contact us for specific information regarding your plan today.

August 30th, 2013

With Matrix, you won’t be stuck with mandatory generics if you transfer your business to us.

Matrix is proud to offer a variety of formularies and cost-saving options to suit both you and your employees’ needs.

Your needs are important to us so unlike many of our competitors, you have drug options when building your plan or transferring carriers.

We don’t believe that employers should be forced to accept lesser plans and for you, the broker, to have to deal with all of the issues that arise within a company when the plan is reduced. Out of pocket costs can dramatically increase in an already tough economy. The backlash from employees whose drugs are no longer covered can strain the relationship with the employer and can produce many negative effects including reduced productivity. Animosity can spread within the workplace. Your goal is to provide employee benefits that are effective in retaining and pleasing current employees and attracting new ones while getting the most value for your dollar.

Contact us, we can help.

July 31st, 2013

Traditionally, Long Term Disability benefits have been based on a percentage of monthly salary; for example, 65 per cent.  The LTD benefit is meant to help financially sustain your plan members who are unable to work; however, this must be balanced with a financial incentive to return to work.

Most insurance carriers cap LTD benefits at 85 per cent (all source maximum) of the pre-disability salary to provide incentive for plan members to return to active work.  Without this cap, a plan member could be financially better off while receiving LTD benefits rather than working.  However, high-income earners insured with a flat percentage LTD benefit may find that the benefit for which they are paying exceeds the benefit they will receive due to the all source maximum.  Here is an example of a plan of 65 per cent to a maximum of $6,000:

  • $10,000 salary per month x 65% = $6,000 (plan maximum)
  • Net income is approximately $5,800 for a $10,000 salary and $5,800 x 85% = $4,930
  • This means that this employee would only get a maximum of $4,930 even though he or she would be paying premium based on receiving $6,000, which leaves a shortfall of $1,070.

Solution:  Tiered Benefit Formulas

A tiered benefit formula can shorten or remove the gap between the benefit amount that premiums are based on and the amount of disability payment for non-taxable plans.  Although the tiered LTD benefit formula will calculate a lower overall benefit than the flat percentage for higher-income earners, these plan members would not be charged for a benefit that they would never be eligible to receive.

Matrix Benefit Services
126 Commercial Avenue, Unit 7
Ajax, ON L1S 2H5
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