Ok, so I suppose I don't really belong in the "Vintage" forum. However, I thought it would be a great resource to tap, given the wealth of knowledge and life experience that is gathered in this forum.

Now that I've plumped your egos a bit, it's question time: Does anyone here have any opinions on Aflac? An insurance guy just came by my office to sit and talk about the benefits and costs. I was wondering if any of you have had any experiences where you have Aflac and it came through, or you wish you had some sort of supplemental experience.

Any opinions would be much appreciated, especially since some of you may be able to see things from a different perspective from me.

Thanks much!

 

I don't know what Aflac is.

 

Well, I wasn't really paying attention to the guy (it was lunch time), but basically it's a supplemental insurance program. You pay them a small amount per paycheck, and if you ever have an accident outside of work (even as small as stubbing your toe), they pay an amount to you in cash to cover:

-Doctor bills
-Transportation costs
-Lost wages
-etc. etc.

Or at least that's my understanding of it. It "fills in the holes" left by a normal HMO/PPO healthcare plan.

 

AFLAC is a good company, but the idea is great. You pay for benefits with before tax dollars, and your employer also saves on payroll taxes. The disability insurance is most important. The cancer insurance is a ripoff. Pay attention to what they offer and sign up.

 

 

I believe that if an employer pays the cost of this type of coverage, it is a deductible expese for the employer.... but then the disability benefits when paid are taxable to the recipient.

If the employee pays the disability premium with "after tax" dollars (i.e., payroll deducted), then benefits received are tax free.

IMO, it is better to have tax free benefits at the time when you may really need the money.

....and I would agree, skip the 'cancer' coverage.... focus on the disability coverage.

 

Canberra is correct in the taxation. However I would rather have the deduction now (by lowering my salary to pay with "before tax" dollars and bet that I will never need the disability payments and therefore not care if it's taxable or not. But each must make their own decisions. In any case, the insurance is a good idea.

 

I'm not as familiar with the taxation of insurance premiums/ benefits as I should be, but I too tend to recommend that my clients pay for their own disability insurance as to avoid the tax on the benefits when and if they become necessary.

At the same time, I do understand Dean's point. Still, we generally feel that disability benefits, if needed, should be tax free.

Dean, are you sure that disability insurance premiums, paid for by the employee with pretax salary result in taxable benefits? It makes sense in terms of the "wholeness of tax" theory, but heathcare benefits paid for with pretax dollars are not taxable. (I know I'm not comparing apples to apples, but I'd have thought there would be some common ground here. I know that healthcare benefits are typically reimbursements of healthcare expenses, or payments to third parties for services received.)

I thought the key to taxing disability benefits was whether the individual or the company paid the premium and if the premium was taken as an expense by the company.

I was under the impression, but I could be wrong, that AFLAC was primarily in the business of offering supplemental insurance, that is insurance over and above what is normally covered by healthcare policies.

 

My husband's employees have this as an option, that they pay on their own. (They have full health insurance from him through Kaiser.) When one of his employees got cancer it wasn't covered. Another guy got hurt (he can't remember how) outside of work, and it wasn't covered either. He said you have to be careful of the fine print. It's through Colonial at his shop.

 

They employ a very intelligent duck.