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June/July 2016  Volume 7, Number 3        

life insurance

Legal Plans Help Employees Stress Less

According to one matrix, “reasonable” attorney fees range from $255 per hour for an attorney with one to three years’ experience, up to $520 per hour for one with 20 years’ experience. A legal plan can help your employees control these expenses.

Several studies commissioned by ARAG, a legal insurance provider, found that legal problems can be a major stressor for people who experience them.

“Legal life events” occur more frequently than you might imagine. Nearly three quarters of Americans reported having at least one legal event in the preceding 12 months, found ARAG’s 2012 Legal Woes Study. This represents a significant increase from the 69 percent who reported a legal event in ARAG’s 2007 study. The most common legal events included buying or leasing a car, hiring/dealing with contractors, caring for an aging family member, dealing with credit or creditors, and death of an immediate family member.

Among Americans with legal events, a majority cited specific causes of their stress:

  • 79 percent didn’t know where to turn or how to get started to resolve their problems
  • 76 percent didn’t understand their options
  • 76 percent cited the time commitment
  • 75 percent mentioned costs
  • 62 percent said they were stressed about finding an attorney.

Although some employee assistance programs (EAPs) provide legal services, benefits are usually very limited. Group legal plans can fill this benefits gap. They can also help employees control their legal costs.

The ARAG study found that people with a legal plan felt less stressed about their ability to deal with a legal issue. Specifically:

  • 90 percent felt less stress about understanding their options and the best course of action,
  • 85 percent were less worried about the time commitment needed to deal with their problem, and
  • 85 percent worried less about the cost of dealing with their legal issue.

(Source: The De-Stress Zone: How a Legal Plan Can Ease Stress, Boost Wellness, a research study conducted by Russell Research and ARAG. www.araggroup.com)

Before you offer a plan, though, here are a few facts to consider:

Access plans vs. insurance: There are two types of legal plans: an access plan and a legal insurance plan. According to the American Prepaid Legal Services Institute’s 2004 survey, most people enrolled in group legal service plans have an access plan, also known as a prepaid legal plan.

This type of plan gives the participant access to an attorney from a preselected network. That attorney agrees to provide a specified number of hours of legal advice or consultations per year at no charge. Typical services might include a simple real estate contract review or simple will. When participants need more in-depth services, they pay the lawyer directly, but the plan typically guarantees a discount off the lawyer’s usual hourly rates.

The legal insurance plan differs from the access plan in several ways. A legal insurance plan is an insurance contract that works like an HMO, where the participant buys an insurance policy, pays monthly premiums and uses a “preferred provider” for services. And like most HMOs, as long as the service you require is covered and you use a network provider, you do not have to fill out claim forms and wait for reimbursement. If you use an out-of-network lawyer, your service will be reimbursed up to a certain (lower) amount.

Not everyone can sell legal insurance. Only a licensed insurance agent or broker can sell a legal insurance plan. And while an agent or broker can sell a legal access plan, unlicensed individuals cannot sell legal insurance.

Plans aren’t for everyone: Legal access plans and insurance policies are designed to meet the needs of most middle-class families. They cover simple family law matters, such as simple wills, uncontested divorces, uncontested adoptions, juvenile court proceedings, minor motor vehicle proceedings (such as speeding, reckless driving, etc.) and IRS audit protection and defense services. Some plans also offer an unlimited number of phone consultations, identity theft services and immigration services.

Not all employees will participate: An article in HR Magazine reported that participation rates of 15 to 20 percent of the workforce were typical. Other sources note that employees tend to opt in and out of legal plans as their circumstances change. For example, employees who plan to adopt a child or buy a house might buy legal insurance, knowing they could use the contract review services.

By allowing employees to buy a legal insurance plan on a lower-cost group basis, you give them a valuable benefit that can help them reduce the stress of dealing with legal problems, and keep them focused on work. For more information on legal access plans, legal insurance or other voluntary benefits, please call us.

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In this issue:

This Just In...

Long-Term Care Helps Boomers Ensure Quality Care, Preserve Estates

Enhance Your Benefit Plan with Cancer and Critical Illness Insurance

Legal Plans Help Employees Stress Less

Enrolling Non-Native English Speakers



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