Employees have come to expect medical benefits from their employers. Dental and vision plans don’t even turn their heads much anymore. Ditto for life insurance.
So how can you wow employees with these days when it comes to benefit coverage without breaking the bank? One Columbus-based utility may have an answer.
AEP started offering prepaid legal plans to its employees four years ago, says senior benefits consultant Curt Cooper.
The cost of offering this somewhat unusual benefit is minimal and it gives employees access to their choice of several prepaid attorneys, Cooper explains.
Any employee electing this benefit, administered through Hyatt Legal Plans of Cleveland, pays the full cost through a payroll deduction. Employees pay $7.95 per month for individual coverage and $16.75 for family coverage, which includes most any type of legal advice except information involving AEP employment-related questions, says Cooper, who is an attorney.
“The only real cost from the company’s standpoint is to get the administration done, which is collecting the money from the paycheck, sending it off to Hyatt and answering employee questions,” Cooper says. “There’s a low cost from a company standpoint and that was attractive to us.”
Setting it up
Before choosing Hyatt as its prepaid legal plan administrator, AEP considered several issues, Cooper says. Among them:
- What legal services are covered?
- What are the employee premiums?
- What is the company’s cost?
- How many attorneys are in the plan network?
- Are those attorneys located where employees are located?
- What is the administration process for the company and employee?
About 750 AEP employees have chosen the prepaid legal benefit and they use the wills and estate planning service most frequently about 40 percent of the time, according to usage reports AEP receives from Hyatt, Cooper says. Wills and estate planning are also the No. 1 services used by employees of other companies offering the Hyatt plan, says Marcia Messett, group sales director in Hyatt’s Cleveland headquarters.
Hyatt, a division of Metropolitan Life, has about 300 corporate customers that offer its prepaid legal plan to employees, Messett says. Other Central Ohio employers using the Hyatt plan include Distribution Fulfillment Services, Rockwell Automation and the Drake Center.
While only 4 percent of AEP employees have elected the prepaid legal plan option, Cooper says, Hyatt marketing materials show that 10 to 20 percent of employee enrollment is typical. AEP employs 17,300, about 3,500 of whom are in Franklin, Fairfield, Delaware and Licking counties.
“With AEP, you have a lot of hourly employees, linemen, people who work out in the field who maybe wouldn’t see the need for legal work,” Cooper says. “With a lot of lower paid folks, they are not real concerned with developing an estate plan or a will. That’s one possible explanation [for the low participation rate].
“Another is that in some of our more rural locations [West Virginia and Kentucky], there aren’t a lot of attorneys in Hyatt’s network. We’ve heard that as a negative.”
Approximately 8,500 attorneys are available through Hyatt’s plan nationwide, although Cooper could not say how many of those are in the greater Columbus area. An employee can choose an attorney outside the plan, he adds, but that attorney would be paid a fee based on the Hyatt fee schedule.
Attorneys on the list do change fairly regularly, Cooper says, but employees can call Hyatt’s toll free number or check its Internet site at http://www.legalplans.com for updates.
At AEP, the popularity of the wills and estate planning benefit is followed by document preparation, then real estate matters. Other ways the company’s prepaid legal plan has been used by employees include:
- Consumer protection;
- Debt issues;
- Defense of civil lawsuits;
- Family law;
- Insurance matters.
Hyatt provides yearly reports on what services within the overall plan are used; however, Cooper stresses that there is never a report showing which employees used which service.
“With a lot of legal issues, they are unpredicted and unplanned and could end up costing a lot of money,” Cooper says. “This would be a relatively low-cost way to guard against those unplanned expenses. We saw it as a fairly valuable benefit to employees and low cost to the company.”
AEP is in the process of merging with Central and South West Corporation of Dallas, which offers a pre-paid legal plan other than Hyatt’s, Cooper says. He expects that after the merger is completed, a prepaid legal plan will remain a benefit to AEP employees.
How to reach: Hyatt Legal Plans Inc., (800) 423-3000; www.legalplans.com
Andria Segedy (email@example.com) is a free-lance writer for SBN.