Good Benefits Rise to the Top: Our Ancillary Close-Up Issue
Voluntary Legal Plans

by Marcia Bowers

As the economic pendulum shows signs of swinging toward a recovery, Americans are looking to get back on their feet and secure their financial future. Many employees are taking advantage of group legal plans offered by their employers. Many employers, across the nation, offer group legal plans as a voluntary benefit including more than 160 Fortune 500 companies. In addition to using legal plans for routine legal matters, like traffic tickets, many employees are using them to get the legal assistance they need to turn their financial situation around. Key metrics, such as usage, enrollment, year-to-year enrollment growth and retention, demonstrate the growing popularity of group legal plans.

According to MetLife’s 8th annual Employee Benefits Trends Study, employers’ top three benefits objectives are controlling benefit costs, retaining employees, and increasing employee productivity. As concerns grow about workplace productivity and morale, employers are looking at offering group legal plans as a low cost way to help employees who are facing legal and financial problems.
Group legal plans can help build job satisfaction and help employees focus on their work because they now have an affordable way to avoid costly legal and financial distractions. According to the study, 65% of employers believe that employees are less productive at work when they are worried about personal financial problems and 52% believe that absenteeism increases when employees are dealing with personal financial issues.

Affordable Legal Assistance for Employees

Many employees have a heightened need for legal advice on financial-related issues, such as debt, bankruptcy, foreclosure, mortgage refinancing, identity theft, and landlord problems just when many can ill afford to hire an attorney on their own. Now more than ever, employees are likely to realize the immense value in having an affordable group legal plan to protect their assets in these troubled times. For about $20 a month (typically through the convenience of payroll deduction) an employee can have easy access to legal advice on many different issues throughout the year.
Usage metrics from Hyatt Legal Plans indicate a dramatic increase in usage for financial-related legal matters in 2009 compared to 2008:
• 213% Refinance/home equity loan
• 103% Property tax assessments
• 92% Security deposit assistance
• 62% Personal bankruptcy
• 34% Debt collection defense (including foreclosures and repossession)
• 28% Miscellaneous financial matters

Group legal plan providers that offer comprehensive legal plans cover more than just consultation or advice for participants who are facing serious matters. Participants have access to qualified attorneys who work to resolve their legal issues. For example, when dealing with creditor issues, attorneys will help negotiate repayment schedules and even go to court to defend plan members in any action for personal debt collection, including foreclosure and repossession.

Resolving credit and debt issues is just one of many services that a group legal plan covers. Attorneys will also review mortgages and deeds and attend the closing for plan members who are buying and selling homes. Homeowners who are refinancing or applying for a home equity loan can have the attorney review the financing documents, deeds and mortgages, and provide advice on the matter. Legal plans also cover tenants who are having trouble with landlord problems, including eviction actions and security deposit issues. Some legal plans also cover tax audits and tax collection defense.

Enrollment Surges in Newly Installed Legal Plans

The typical benefit eligible employee enrollment in voluntary group legal plans is about 8% on average, according to the nation’s largest provider of group legal plans. Enrollments surged well above this average for enrollment at many organizations that implemented a group legal plan with a start date of January 2010. While personal finance issues have been attributed to increases in enrollment and usage, employees also appreciate the value of a legal plan for long-term legal needs, such as the preparation of wills and trusts.

Year-to-Year Enrollment Growth Demonstrates Value of Legal Plans

Strong year-to-year enrollment growth demonstrates that plan members value the service they get from the legal plan. Many are re-enrolling year after year and may be sharing their positive experiences with co-workers who then decide to enroll in the legal plan.

Legal Plans are Cost-Effective and Easy to Administer

Group legal plans are a great tool for employers because they are cost-effective as well as being easy to implement and administer. As a voluntary benefit, there is little or no direct cost to employers and employees typically pay about $20 per month, including coverage for a spouse and dependents. According to the American Bar Association, hourly attorney fees range from $60 to $300 or more per hour; therefore, often the first time a plan member uses their legal plan to resolve an important legal matter, the plan typically pays for itself.

As economic indicators point to a brighter future, group legal plans will continue to provide employees cost-effective legal assistance with financial-related and routine legal matters. q
––––––––––
Marcia Bowers is marketing director at Hyatt Legal Plans, a MetLife company that provides participants with legal services. She can be contacted at mbowers@legalplans.com.