Addressing Uncertainty with Legal Insurance

BY DENNIS HEALY

Uncertainty was the hallmark of 2020 as the confluence of a global pandemic, social unrest, economic setbacks, and a series of natural disasters left many of us reeling. Working through these daunting challenges continues as we head into 2021.

Business leaders strive to be empathetic to the needs of their employees in these still stressful times — reaching out candidly with perspectives on company direction, recommitting to diversity and inclusion, and enhancing programs that support employee well-being.

To that end, employers are evaluating their benefits portfolio, particularly their voluntary offerings that help a diverse, multigenerational workforce personalize a benefits solution that works for them. In turn, employers look to their benefits carriers to collaborate and evolve their products and services to better support that objective.

“We try to walk in step with our customers to make sure our products address changing needs,” said Jennifer Beck, director of customer experience & insights for ARAG. “We get input  from employers, brokers, benefit consultants and members themselves to determine what additional coverage will have the most value to them — and then add those to our legal plan.”

At its core, legal insurance helps provide peace of mind by mitigating some of the uncertainties in life — uncertainties that have grown exponentially in the past year and will likely continue in the months ahead. The need for legal protection is ubiquitous across all life stages — for the great moments, like buying a home or adopting a child, and to help with life’s struggles.

Brokers should consider how adding legal insurance plans can help employers respond to some of the long-tail issues from 2020 that will be part of our ‘new normal’ in the years ahead.

CHALLENGE #1: ADDRESSING FINANCIAL STRESSORS

The economic toll of the coronavirus, while showing some signs of diminishing, has been considerable for many businesses and individuals alike. For an employee base that was already under financial pressure pre-COVID-19, the pandemic — and resulting shutdowns and furloughs — exacerbated those money concerns.

Financial matters continue to be the top cause of stress and a major distraction at work — more than other stressors combined, according to the PwC 2020 Employee Financial Wellness survey. Contributing to that unease is the fact that nearly 40% of full-time employed millennials, GenXers, and Baby Boomers, have less than $1,000 saved to deal with unexpected expenses.

In addition to increased stress, this may trigger greater delinquencies, financial hardship, and even bankruptcy. For example, Forbes reported that mortgage delinquency rates nearly doubled, jumping almost four percentage points to more than 8% during the second quarter of 2020, as the economic fallout from the coronavirus really began taking hold. According to the Mortgage Monitor, this problem is becoming persistent.

For those dealing with serious debt issues, it’s critical to have access to legal counsel to understand the options as well as the short- and long-term implications of each. ARAG network attorney Candace Y. Brooks with Brooks & Carpenter in Sacramento advises, “Before doing anything, at least have a consultation with an experienced bankruptcy attorney. That conversation may save you from making some expensive mistakes.”

Depending on the legal plan, coverage provides enrolled members access to network attorneys who practice in dozens of areas of law — at no cost or significantly reduced costs.

Considering that the average hourly rate for an attorney in the U.S. is $368 per hour, a legal insurance plan can save members thousands in legal fees on covered matters — debt-related or otherwise. Given the reported lack of funds to cover the unexpected, this can be a game-changer for many families.

In addition, members can take advantage of a wide range of tools and online resources, like template documents, an attorney finder, and various guides. In fact, here at ARAG, we saw a surge in usage of DIY Docs®, a document creation tool, from March to April. In addition to wills, creation of healthcare power of attorney, HIPAA authorizations and elder care arrangements have all nearly doubled over this period in 2019 as growing concerns about health and finances have prompted many to get their houses in order, particularly when it comes to estate planning.

CHALLENGE #2: CHANGING FAMILY DYNAMICS

Multiple generations under roof and limited mobility thanks to guidance to ‘stay home and stay safe’ present its own challenges. Many employees must balance work responsibilities — from home or office — with overseeing children’s education, at least part of which is online, while potentially caring for older family members.

COVID-19 accelerated the caregiving crisis by thrusting more Americans into caregiving roles. The Blue Cross Blue Shield Association reports that more than half of employees (55%) who say they’re now caregivers didn’t identify themselves as such before the coronavirus pandemic.

More than 80% of employee caregivers say caregiving has affected their productivity at work, according to a Harvard Business Review survey, at a cost to companies of more than $5 billion each year in absenteeism alone. Recognizing the magnitude of the issue, more employers are stepping up to offer caregiver friendly benefits like flexible work schedules and paid time off or caregiver leave.

How can legal insurance plans help? Clearly, access to attorneys for guidance on elder law issues and a wide range of legal documentation designed to protect a loved one’s financial and health interests are key. In addition, some plans afford members support from elder care specialists, like CareScout®, who can help members develop care plans or look for the best long term care providers as needed.

CHALLENGE #3: DIVERSITY & INCLUSION: A BIAS FOR ACTION

When it comes to diversity and inclusion, employees are looking for companies to ‘show, not just tell.’ In addition to demonstrating its commitment to creating a diverse and inclusive environment through its hiring, professional development programs, and shared values, employers should evaluate how well its benefits program supports this effort.

Imagine the frustration of not being able to visit your partner in the hospital. Or the confusion caused by inaccurate personal information displayed on important documents. For members  of the LGBTQ community, situations like these can lead to legal challenges, not to mention added personal stress.

As my colleague Jennifer Beck puts it, “At ARAG, we strive to help all employees assert their legal rights. So, we’re constantly adapting our plan coverage to meet the diverse needs of employees — and to help them through whatever situation they may face, wherever they are in life.”

Some legal issues, such as creating an estate plan or designating a power of attorney aren’t unique. But there are some new inclusive coverages that go beyond age, gender and income differences, and apply broadly to any diverse group, such as a:

  • Domestic Partnership Agreement that explains the legal rights and responsibilities of each partner; it’s designed to help protect assets, children, financial interests and overall
  • Hospital Visitation Authorization that provides the right to have access to a partner during a hospital
  • Gender Identifier Change to make necessary changes on government issued documents, such as Social Security records, licenses, or
  • Funeral Directive that addresses final wishes on the arrangement of services and disposition of remains.
  • Surrogacy Agreement that guides the entire surrogacy journey, clearly outlining each party’s rights, roles, and responsibilities before, during and after the

OPPORTUNITY IN CRISIS

To paraphrase author Gever Tulley, “Persistence and resilience come from having to work through difficult problems.” Well, 2020 certainly presented us with myriad tough challenges. Our shared goal is to do what we can to give our clients the  best tools to meet those challenges head on going forward — and in the process, demonstrate to employees that their well-being is valued.

DENNIS HEALY is a member of the ARAG® executive team. Healy is a passionate advocate for legal insurance because he has seen firsthand how it helps people receive the protection  and  legal help they need. He has nearly 30 years of insurance industry experience, with a primary focus on the sale of group voluntary benefit products to employer groups of all sizes through the broker and consultant community.