Shaker Auto Group has 6 locations in New England. Each location had provided their full-time employees the opportunity to purchase Individual Life, ADD, STD and LTD and Cancer coverage through a voluntary payroll deduction plan.
Initially another carrier's agent met individually with each of the employees and as time went on the agent was no longer available and did not provide service to the employer or the employees. The benefits had not been communicated to the employees and the employers properly.
The plans were sold on a pre-tax basis, with premiums paid with pre-tax dollars. This structure allowed a small savings to the employee allowing the employee to pay their premiums with pre-tax dollars; however, due to the revenue code, it would only allow an employee to terminate coverage if they had a qualifying event.
Since coverage was also placed with many different carriers causing more confusion, it appeared that the selling agent sold based on the highest commission received rather that what coverage was best for the employee. Due to these problems, we introduced a third party administrator and we remarketed the programs. One vendor was chosen and coverage was replaced.
We set up a schedule to have the new administrator available at each location once a quarter, or as needed by the employer and employee. The administrator is available to meet with new employees or meet with current employees to answer questions.
