Foster Soltoff & Love, Ltd. The Benefits Life Cycle Presented by: Paul F. Love, CLU, ChFC, CLTC Foster, Soltoff & Love, Ltd Rock Spring Drive Suite 190 Bethesda, Md (301) x1107

Foster Soltoff & Love, Ltd. Basic Medical Coverage HMO Phase I (0- 2 years) Point of Service 2-9 Employees Preferred Provider Organization COBRA

Foster Soltoff & Love, Ltd. Phase II (2-5 years) Comprehensive Medical Core Benefits: Dental Benefits Vision Benefits 10 – 25 Employees HMO Point of Service Preferred Provider Organization Follow the Platinum Rule

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 Qualified Retirement Plans 401(k) / Profit Sharing Plan Non Matching Safe Harbor Money Purchase Plans Core Benefits (Cont’d): Section 125 Plan Premium Only SEP/IRA SIMPLE IRA SINGLE K

Foster Soltoff & Love, Ltd. Phase III (5+ Years) Section 125 Voluntary Payroll Deduction Plans Medical Expense Reimbursement Plans Dependent Care Supplemental Life Prepaid Legal Pet Insurance Short Term Disability/Critical Illness Employees Executive Benefit Plans

Foster Soltoff & Love, Ltd. Phase III (5+ Years) Employees Employee Assistance Programs Confidential 24 hour access to personal problem solving resources, consultation and referrals Childcare Eldercare Crisis Management Educational Issues Estimated 3-4% Payroll savings through reduced absenteeism Consumer Information Financial Issues Worksite Issues Issues include:

Foster Soltoff & Love, Ltd. Phase IV (5 + Years) Supplemental Disability Insurance Long Term Care Insurance Partial Self-funding of Health Benefits Defined Contribution Medical Plans Section 529 Educational Savings Plans Pension Disability Benefit > 100 Employees

Foster Soltoff & Love, Ltd. Methods of Restructuring Benefit Plans for Affordability

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. THE PROBLEM

Foster Soltoff & Love, Ltd. Some Solutions Higher Co-payments, Deductibles, Out-of-Pocket Maximums Prescription Drug Benefits Alternative Funding Methods 1. Medical 2. Prescription Drug Benefit 3. Short Term Disability Partial Self Insurance

Foster Soltoff & Love, Ltd. Some Solutions Health Savings Accounts Created by the 2003 Prescription Drug Act PL No 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. Health Savings Accounts Providers do not understand how the plan works  Set up and maintenance fees  Must be coordinated with spouse’s health plan Some Solutions Issues:

Foster Soltoff & Love, Ltd. Defined Contribution Medical Plans Review Money Purchase Plans versus 401(k)/Profit Sharing Plans Some Solutions Health Reimbursement Accounts (HRA)

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. FINALLY…..