We added AFLAC to our benefit plan three years ago. It was a very positive addition to our plan. We offer Accident, cancer, personal recovery plus, and whole lifeinsurance. WE hve a WONDERFUL agent who processing about 5-10 claim per week for our employees. The accident plan is very popular. My personal experience has been very favorable. They process claims very quickly. Employees really like the addition to our plan.
It is true that you have to work closely with the rep. Becuase the AFLAC agent HAS to enroll the participants, due to insurance regulations (FLORIDA). If you have a GREAT rep (like I have) it makes the administration a breeze.
I honestly do not know how AFLAC can pay as well as they do, as stil stay in business. Per our rep, AFLAC insures about 90% of the working people in Japan.
The problem with AFLAC's supplemental policies (accident, cancer, etc) is that they are, in my opinion, "warm-n-fuzzy" items. They give people nothing more than a sense of security. With a good group health, short-term and long-term plan in place your employees and their families should be adeqately covered.
My biggest reason for not recommending AFLAC is the cost. Sure, they tout portability, etc, however, as of last month (when our broker sent out RFP's for group short-term disability so we can migrate away from AFLAC), you pay dearly for portability. In TN, AFLAC is about 50% more than comparable group coverage.
Educate your employees about adequately insuring their lives (8-10 times annual salary) in a level term policy, building a 3-6 month emergency CASH fund, and try to offer them a decent STD plan.
You make a valid point, but some people will never try to understand the benefits of planning and arranging personal finances/budgets in a way that may be more beneficial to them, and our (HR professionals') ability to make significant impacts on their lives through training/educating at work is limited. Some employees have a different mentality altogether, which leads to a different perspective, and their preference is to spend the money every payroll period with the idea that a payoff might be there at some point in the future--much like playing the lottery. We have a fearful society in many respects, and some insurance policies prey on the fear. We also still have many people trying to achieve the "American Dream," and believe it or not, many see insurance policies is a potential method for achieving it. Many employees in my organization truly do not understand that the same money set aside in some form of savings might be a better option. Their self discipline to set aside the money if it's not being taken away from them to pay a bill and their limited understanding of a more holistic approach to personal management of resources means they just don't get the picture.
We're just finishing open enrollment, and again I am amazed at how many people we have working in our organization who are near poverty level but who purchasing unrealistically high amounts of "warm & fuzzy" insurance policies (term life and supplemental). Their tendency is to focus on the amount of a single payroll deduction and not a total year's payment. If it's under $20, they'll buy. Unfortunately, their portion of the health insurance premium exceeds $20, so many will bypass health insurance (the very thing we want them to buy) and pick up various supplemental policies instead. Dental insurance is very inexpensive, so they'll take it. Term life insurance is very cheap, and AFLAC policies often cost less than $25 per payroll period, so they'll buy them. It makes me think of the "buy here/pay here" car dealerships where car payments are made by the week. Those types of dealerships don't appeal to a lot of people, but they do appeal to a specific type of person with a unique set of characteristics. And those businesses usually tout themselves as providing a beneficial service. I don't see it, but I guess they do for some folks. Some spplemental insurance policies fit the same general mold and probably do provide a beneficial service to their true target market.
"Their tendency is to focus on the amount of a single payroll deduction and not a total year's payment."
Then maybe they shouldn't have so much from which to choose. The rationale discussed in the prior post is the one I used to discourage our signing up with AFLAC; our STD & LTD and health insurance plans will cover our employees well enough that AFLAC is not a need.
I agree with your observation. Unfortunately, I inherited an extremely wide product range in the benefits program when I came onboard. In two years it has been simplified considerably by achieving a net reduction of about 4 products in the overall product selection, but we still have a ways to go. If you can imagine, the administration side of too many choices is a nightmare to manage. Changing from a previous insurance supplier to AFLAC was one of the steps we took a year ago to reduce the choices. Another was to consolidate life and disability insurances into single-product offerings. This year we worked on health insurance (trying to phase out HMO) and tried to consolidate dental insurance options. We went with the health insurance changes (with an 18% increase in premiums) and backed off the dental changes because without the change dental premiums declined slightly and with the change they would have increased 30% for one class of worker. Next year we'll attack something else. We are not advertising the message that some choices are being phased out, but that is exactly the strategy under my HR regime. Our experience has been that to take more aggressive steps any quicker would probably lead to a mutiny among employees. The catch for us is that we are very rural (limited talent/applicant pool), nearly 1/3 of hour total staff of nearly 500 are licensed nursing staff (some of the hardest to recruit, especially in a rural setting), and we have state mandated staffing ratios to maintain or we lose our license to operate a major revenue source. We truly walk a very fine. In the meantime while we transition to a simpler overall benefits program, we see the unfortunate circumstances of poor personal choices made by people who don't understand the role they play in their personal financial health. Some of our folks truly focus on the amount of the payroll deduction from a single payroll check. We've begun the education process with compensation statements this year, which helped make an impact, but if an employee insists on buying a product that we have available and the employee satisfies eligibility requirements, I can't deny the purchase because I think it's a bad decision.
We fired AFLAC for supplemental benefits 3 yrs ago. The reasons were:
1) our regular EE benefits are excellent, so the AFLAC supplemental stuff really provided NO added value for our EEs.
2) it was almost impossible to get an AFLAC rep on the phone. Our "rep" did not return calls for the most part. We scheduled the "rep" to do one on-site meeting w/ staff, and he did not show up.
3) when we dumped AFLAC, none of the staff complained about it-- in fact, by that time, most EEs had canx'd their AFLAC, and we had only 1 EE still participating.
4) when we fired AFLAC, it took them several months to get the message.... they continued sending invoices, frantic cancellation notices, etc, for at least 6 mos after they were notified, both by phone and in writing, that we were canxing.
Bottom line: I do NOT recommend AFLAC. I think that obnoxious quacking duck in the TV ads accurately represents both the corporate personality of AFLAC and the real value of their insurance products. I'm just grateful I never purchased their insurance products myself, and so never had to pursue a claim with these jokers.
After being bombarded constantly by calls, I finally talked to one AFLAC rep about the problem. I told her that I had asked repeatedly to be removed from AFLAC's call listing and still the calls kept coming. She explained that the reps are not employees but Independent Contractors and that was why the extreme persistence -- everyone did their own thing. Also, that is why your experience totally depends on the "rep".
We decided that this was not for us. However, we did not let our employees suffer -- we have the same or better benefits offered by AFLAC with another provider.
Well, that helps *me* understand why they not only keep calling, but stopping by constantly, even though I had asked to be taken off of their list, as well. I just saw an ad last night online to work at one of their local offices as a benefits administrator, but reading the entire ad was like reading an ad for a sales job: "Do you want to have the possibility to make $100,000 a year?" I guess they really get on them to sign new companies up all the time.
Comments
It is true that you have to work closely with the rep. Becuase the AFLAC agent HAS to enroll the participants, due to insurance regulations (FLORIDA). If you have a GREAT rep (like I have) it makes the administration a breeze.
I honestly do not know how AFLAC can pay as well as they do, as stil stay in business. Per our rep, AFLAC insures about 90% of the working people in Japan.
My biggest reason for not recommending AFLAC is the cost. Sure, they tout portability, etc, however, as of last month (when our broker sent out RFP's for group short-term disability so we can migrate away from AFLAC), you pay dearly for portability. In TN, AFLAC is about 50% more than comparable group coverage.
Educate your employees about adequately insuring their lives (8-10 times annual salary) in a level term policy, building a 3-6 month emergency CASH fund, and try to offer them a decent STD plan.
We're just finishing open enrollment, and again I am amazed at how many people we have working in our organization who are near poverty level but who purchasing unrealistically high amounts of "warm & fuzzy" insurance policies (term life and supplemental). Their tendency is to focus on the amount of a single payroll deduction and not a total year's payment. If it's under $20, they'll buy. Unfortunately, their portion of the health insurance premium exceeds $20, so many will bypass health insurance (the very thing we want them to buy) and pick up various supplemental policies instead. Dental insurance is very inexpensive, so they'll take it. Term life insurance is very cheap, and AFLAC policies often cost less than $25 per payroll period, so they'll buy them. It makes me think of the "buy here/pay here" car dealerships where car payments are made by the week. Those types of dealerships don't appeal to a lot of people, but they do appeal to a specific type of person with a unique set of characteristics. And those businesses usually tout themselves as providing a beneficial service. I don't see it, but I guess they do for some folks. Some spplemental insurance policies fit the same general mold and probably do provide a beneficial service to their true target market.
Then maybe they shouldn't have so much from which to choose. The rationale discussed in the prior post is the one I used to discourage our signing up with AFLAC; our STD & LTD and health insurance plans will cover our employees well enough that AFLAC is not a need.
1) our regular EE benefits are excellent, so the AFLAC supplemental stuff really provided NO added value for our EEs.
2) it was almost impossible to get an AFLAC rep on the phone. Our "rep" did not return calls for the most part. We scheduled the "rep" to do one on-site meeting w/ staff, and he did not show up.
3) when we dumped AFLAC, none of the staff complained about it-- in fact, by that time, most EEs had canx'd their AFLAC, and we had only 1 EE still participating.
4) when we fired AFLAC, it took them several months to get the message.... they continued sending invoices, frantic cancellation notices, etc, for at least 6 mos after they were notified, both by phone and in writing, that we were canxing.
Bottom line: I do NOT recommend AFLAC. I think that obnoxious quacking duck in the TV ads accurately represents both the corporate personality of AFLAC and the real value of their insurance products. I'm just grateful I never purchased their insurance products myself, and so never had to pursue a claim with these jokers.
We decided that this was not for us. However, we did not let our employees suffer -- we have the same or better benefits offered by AFLAC with another provider.