Although Legal Insurance Plans (also known as Pre-Paid Legal Plans) have been around for quite some time now, employers haven't jumped on the bandwagon by offering them to employees as part of their benefits package. This may be due to many plans being marketed through Multi-Level Marketing groups rather than bona-fide benefit organizations. Typically benefit organizations have access to HR personnel because of their group health benefit relationships, and it is most likely difficult for an unknown person to get the attention of an HR manager at a large organization. When we talk about Legal Insurance Plans, there are many available, but most all of them contain the same common core of benefits.
Pre-Paid Plans are typically sold to help individuals offset the cost of anticipated legal expenses by paying a discounted fee in advance. The plans work very much like any normal insurance product since the fees paid in advance are spread among a large group that may or may not ever have the need to use them. In simple terms, a large fund of money is created in the present which is available to pay legal expenses for members in the future.
The basic service typically provides members with access to an attorney for legal advice and other preventative services over the telephone. The member may also receive the benefit of contract reviews, preparation of simple legal documents, and short letters signed by an attorney. If additional services are needed, the member is referred to an attorney's office.
Comprehensive Group Plans
The group plans which are typically offered by the employer, work much the same way as insurance and provide more core benefits than the Pre-Paid Access Plan. The employer or employee pays a monthly benefit into the plan which allows the member access to covered legal services if and when the need arises. Most plans will cover unlimited telephone consultations with the plan attorneys, document and contract review, preparation of wills and powers of attorney, and some simple traffic cases. As with most insurance products, a deductible or copayment may apply, so the member is encouraged to thoroughly review the plan's terms and conditions.
Discount Legal Plans
Many employers will give away the Discount Legal Plans to employees. These plans work similar to Discount Prescription Plans. The member obtains access to a group of participating attorneys who have agreed to charge pre-negotiated and discounted fees to the member.
Are They Worth It?
Certainly, employers understand that great benefit packages help retain employees. In fact, prospective employees typically consider their benefits packages almost as important as their compensation package. Knowing this, employers should make the following considerations:
- Marketplace Competition - Having a Legal Insurance Plan as part of the employer's benefits package is an inexpensive method of adding an arrow to your quiver of benefits.
- Lost Work Hours - Virtually every employee will be affected one way or another because of a legal matter. Having access to attorneys can reduce time lost when employees must leave the office to handle legal matters.
- Reduced Stress - Employees that experience stress resulting from even minor legal matters are typically less effective than non-stressed employees.
- Positive Outcomes - Employees that have access to legal representation will achieve a more positive outcome when legal situations arise.
If you are considering to offer your employees some type of Legal Insurance Plan but haven't pulled the trigger yet, contact one of our insurance professionals at (718) 267-6600 or visit Skyline Risk Management, Inc. to get the information you need regarding employee benefits.