The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
By Cyril Tuohy
American Family Life Assurance Company, known as Aflac, is expanding its reach into the growing voluntary benefits marketplace with the launch of cancer care coverage in New York and New Jersey, and tweaks to its group short-term disability product line, the company said.
Cancer coverage for New York was announced June 27, and for New Jersey July 1. Enhancements to group disability were announced June 26.
“Fighting cancer is an emotionally difficult experience and one that already carries tremendous stress and anxiety along with it,” said John Harmeling, senior vice president of worksite marketing at Alfac, in a news release. “Unfortunately, the stress is often exacerbated by the financial burden of this costly disease.”
The cancer care policy offers cash payments of varying amounts in connection with the initial diagnosis, wellness, medical imaging and topical chemotherapy benefits, the company said. Dependent child riders are also available. The company already offers cancer care coverage in several other states, according to a company spokesman.
On the group short-term disability side, which protects an employee if he or she is injured and doesn’t have the means to go back to work and generate income, Aflac has increased income replacement coverage of up to 60 percent of salary with a total monthly benefit limit raised to $6,000.
Minimum hours worked have also been reduced to 19 hours per week for employees to qualify for the coverage, the company also said.
“Short-term disability expenses can quickly add up,” said Michael Zune, executive vice president and chief marketing and sales officer. A leg fracture can cost as much as $14,420 in out-of-pocket medical costs, according to an Aflac estimate, and that doesn’t even include lost income from being unable to go back to work while the employee heals.
The group voluntary market has notched big gains with total new business premium exceeding $6 billion last year, up 6.6 percent from 2011, according to Eastbridge Consulting Inc.’s U.S. Worksite/Voluntary Sales Report.
Insurers have taken note of the growth, with several companies in the past year introducing new critical care policies and enhancing their income protection products.
Industry experts say that the uncertainty surrounding health care reform and the underpenetration of voluntary benefits among smaller employers means plenty of opportunity for carriers selling into the voluntary benefits space.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at Cyril.Tuohy@innfeedback.com.
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