Group plans can provide flexible, low cost options that protect employees and their families against the high cost of medical expenses and the loss of earning capacity that can accompany a sudden accident, illness or death.

Along with time-off benefits, health care benefits are one of the most popular and most important employee benefits. It's generally most efficient to go with a group program when you want to provide benefits to a substantial number of employees.

Some of the most common types of benefits used in group plans are listed below.

• Health—Considered by most employees as their most valuable group benefit. Provides coverage that may include prescription drugs.



• Life—Businesses purchase coverage on the lives of their employees. Some may choose to offer employees the option to purchase supplemental coverage from the same insurer.



• Dental—Often the next benefit added to a benefit plan after health. Coverage may include expenses related to preventative care and maintenance, and may include orthodontia.



• Vision—Businesses provide coverage for their employees that may include eye exams, frames, lenses, or vision correction.



• Disability Insurance—Businesses purchase short-term or long-term disability coverage for their employees. The benefit protects employees against financial risk associated with lost income due to disability.



• Long-Term Care Insurance—Growing in popularity, long-term care insurance provides coverage that helps pay the cost of extended care received in the home, community, an alternate living facility or nursing home.

 Individual nonqualified executive benefit plans allow business owners to custom design their benefits package to reward key employees by meeting unique employee needs. Often, these plans are used in conjunction with group benefit plans.

In fact, business owners may use a concept called group carve-out to provide unique benefits to key executives. With group carve-out plans, individual welfare benefits replace or enhance group plans to provide competitive benefits used to attract, reward and retain key employees.

Some of the most common types of benefits used in nonqualified executive benefit plans are listed below.

• Bonus Plan—The business provides the executive with added compensation for acquiring personal benefits such as personal life insurance, disability insurance, health insurance, or annuity contracts.



• Split Dollar Plan—The business assists the executive in the purchase of cash value life insurance. Premiums, cash values, and death benefits for the policy are usually split between the business and the executive.



• Death Benefit Only Plan—The business agrees to provide benefits only in the event of the executive's death.



• Disability Wage Continuation Plan—Select executives of the business apply for and own individual disability insurance policies. The employer and executive agree on who will make premium payments.

Qualified plans—Qualified retirement plans typically cover substantially all employees and have special tax advantages. These types of plans are subject to somewhat complex rules to obtain tax advantages. Two broad categories cover most qualified plans: defined benefit and defined contribution.

Within each category, there are specific types of plans that meet certain needs and objectives. In addition, a business can set up somewhat less complex plans by using IRA's. Two examples are the Simplified Employee Pension Plan (SEPP) and Savings Incentive Match Plan for Employees (SIMPLE) which are variations of a defined contribution plan.

Qualified plans may be funded through mutual funds, annuities, and/or life insurance purchased by the business. A Financial Representative or Benefit Specialist can consult with you on your options and provide you with a detailed analysis of possible solutions.

 Nonqualified executive benefit plans—Selective plans provide retirement benefits and in some cases supplemental death benefits to select key employees and can be used to replace or enhance group or tax-qualified retirement benefits.

The tax advantages are generally not as immediate as they are with qualified plans, but nonqualified plans are not subject to the strict rules governing qualified plans.

Two broad categories cover most nonqualified executive benefit plans based upon whether the benefits provided are in lieu of, or in addition to, current compensation. These are deferred compensation plans and supplemental employee retirement plans, respectively.

Nonqualified executive benefit plans are unfunded, from a tax standpoint. The business can choose to set aside funds or to purchase assets, such as life insurance, to informally finance the benefit. However, the benefit is provided strictly from the assets of the business—not from any separate fund. A Financial Representative or Benefit Specialist can consult with you on your options and provide you with a detailed analysis of possible solutions.

Individual plans—Employees may also participate in individual retirement plans that offer personal tax advantages. The employer may assist employees in setting up these plans to enhance retirement benefits without all the requirements of a qualified plan.

Two common types of individual retirement plans are individual retirement accounts (IRA's) and tax-deferred annuities. A Financial Representative or Benefit Specialist can consult with you on your options and provide you with a detailed analysis of possible solutions.