Why Parental Leave Insurance is a Better Option for Your Customers

White-Label Insurance Parental Leave Insurance

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White-Label Insurance Parental Leave Insurance

By The Boost Team on Mar 24, 2023

8 min read

A greyscale photo of a woman smiling and checking her phone while holding a baby. A green-blue gradient cuts across the back of the picture, highlighting the figure of the woman.

Parental leave is the third most requested benefit for US workers, but with no universal parental leave requirements, there are limited options for how businesses can provide this important benefit to their employees. In this blog, we’ll unpack the four most common parental leave options for US businesses and explain why parental leave insurance is a better alternative.

What is the Purpose of Parental Leave?

Parental leave is a benefit designed to financially assist employees who become parents, and ensure job security while they take time off work to care for a new child. If an employee becomes a parent and needs time off to bond with their baby, parental leave could cover a portion of their salary until they return to work after a certain period of time.

Because the U.S. has no national requirements for parental leave, options can vary widely by state, and often have caveats, exclusions, and limitations. For example, some options don’t cover adoptions or foster care, or exclude fathers. While the federal Family and Medical Leave Act (FMLA) applies nationwide, it only guarantees unpaid leave, which limits its usefulness to working families.

Parental leave is a significant DEI issue for retaining and acquiring employees who may become parents—especially female employees. Nearly 30% of working women quit their jobs after giving birth, and 66% of employees said that paid parental leave is an important factor to them when they are deciding whether or not to accept a job offer. In states that do require paid parental leave, the rate of mothers leaving the workforce dropped 20-50%.

Parental Leave Options Available to Parents Today

The leave options available to U.S. businesses and prospective parents can vary widely based on location, length of employment, and more.

Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act of 1993 (FMLA) is a federal requirement for companies with 50 or more employees within a 75-mile radius of the company to offer their employees 12 weeks of job-protected unpaid leave due to childbirth. As a federal law, the FMLA act makes this leave available to parents in all 50 states whose employers meet the requirement, but the key word is unpaid leave.

While these federal protections ensure new parents have a job to come back to, most employees cannot afford to take 12 weeks of unpaid leave regardless. This makes taking FMLA leave a non-starter for many prospective parents.

Short-Term Disability (STD)

Short-term disability (STD) is a benefit that covers temporary medical issues that prevent an employee from working. Typically, STD covers things like non-job-related injuries, illnesses, or other medical issues that workers' compensation does not cover, and pays a portion of the employee’s salary during the claim period.

STD is often selected by companies as a potential way to address parental leave, but it has several shortcomings. First, in every state besides California, New York, Rhode Island, New Jersey, and Hawaii, STD is a voluntary benefit that employees have to pay into. That means that outside those five states, employees would have to anticipate their potential parenthood and plan for it before open enrollment. If an employee were to unexpectedly become pregnant or bring a child into their family, they would not have access to this benefit. In some cases, an employee who wants the benefit added after open enrollment can undergo a medical review to determine if they are eligible, but not all companies offer that option.

Another drawback is that STD coverage usually only applies to pregnant mothers, which leaves a significant portion of parents ineligible. Additionally, the amount of time an employee can take on leave is based on the number of days they’re worked at the company. This is a problem for newer employees who would want to take leave because it can exclude them from coverage entirely.

Some employees can benefit from applying for private STD coverage, and in some cases, they can combine their private STD coverage with what is offered by their employer. However, that is frequently a complicated application and coverage selection process. It requires employees to jump through several hoops to receive the coverage and paid benefits they need.

State-Funded Paid Leave and PTO

While the U.S. has no national paid parental leave solution, a minority of states offer programs to help fill the gap. These programs can offer considerable benefits over STD, but often fall short of providing a complete solution.

Let’s start with the benefits. Unlike STD, state-funded leave usually is more inclusive of what it means to be a parent, and often includes fathers, adoptive parents, and foster parents. In many cases, state-funded leave also allows employees to take off more time than what's offered by short-term disability. Some states even require employers to offer paid or unpaid leave to employees.

For companies whose employees are all based in states with leave programs, this can be a helpful support for offering paid parental leave. However, since only a few states currently offer state-funded parental leave, these programs will be of limited help to larger companies with employees scattered across the U.S.

While state-funded leave programs generally offer more flexibility and extensive coverage than STD and FMLA, there can be drawbacks for parents as well. States may require doctor’s notes and official medical examinations, and different states have different limits on leave, percentages of salary reimbursements, time off requirements, etc. Even for parents who live in states that provide these programs, the time off and level of reimbursement offered might not meet their needs.

When state-funded leave falls short, parents can sometimes supplement the program by banking PTO days to fill in the gaps. However, this can be problematic for some employees. Banking enough PTO days for parental leave requires serious planning ahead, which doesn’t always benefit those who might become pregnant unexpectedly. Additionally, depending on the company’s PTO accrual policies, this may only be available to employees who have been at the company long enough to bank a significant amount of PTO hours.

On the company side, state leave places a greater emphasis on internal HR or administrative teams to manage these benefits. Every state has different laws, so managing employees across multiple states and different programs can be tricky. Ensuring compliance requires very specific legal expertise, knowledge of each state’s rules and regulations, and systems in place to follow them correctly. Not every HR team has the expertise or bandwidth to handle those responsibilities, and it can be expensive to hire the necessary specialists.

Company-Funded Paid Leave

Finally, some companies who offer paid leave to employees simply pay for it themselves. This requires the business to set aside money for employees who may become parents in order to pay them while they are out of office. It could also double expenses if the company needs to hire temporary replacements for the employee on leave. That would mean that both the temporary employee’s salary and a portion of the employee on leave’s salary would be coming out of the company’s pocket.

For many SMBs this option is far too expensive to afford on a sustainable, equitable basis. It can also be extremely difficult to forecast and budget for. How many employees will take leave in a particular year, and how much money needs to be set aside?

In short, most parental leave options leave something to be desired, be it inclusivity, pay, availability, or affordability. Employers have traditionally had limited choices for how they can provide this much-needed benefit, but there’s a new option that’s picking up steam —parental leave insurance.

What is Parental Leave Insurance?

Boost’s parental leave insurance is a first-of-its-kind business insurance designed to make parental leave affordable for small and medium businesses (SMBs).

How Parental Leave Insurance works

As someone who partners with or caters to SMBs, you can offer the parental leave insurance product to your customers. By purchasing this commercial insurance product, your SMB customers can customize the level of benefit that they want to offer to their employees. This includes factors like what percentage of the employee’s salary will be covered and the length of leave the SMB will offer.

Once your customer is satisfied with their package, they buy the policy from you and pay a recurring premium based on their selected benefits and employee demographics. When a covered employee takes parental leave, your customer will file a claim through your claims process. The customer will then be reimbursed for the cost of paying their employee during the covered leave period, as spelled out in the parental leave insurance policy.

Parental Leave Insurance: Comparative Benefits

When comparing parental leave insurance to the existing options, there are many areas where elective, state, federal, and company-funded solutions fail but parental leave insurance thrives, including:

Affordably increases top talent attraction and retention

For prospective employees with highly valuable skills and experience, benefits are the real differentiator for jobs. For companies to stand out from the competition to attract and retain the best talent, they need to offer great benefits that employees actually want. Parental leave insurance enables companies to affordably offer a highly desirable benefit: reliable, comprehensive, and inclusive parental leave programs.

Eliminates large, unexpected leave expenses

Parental leave insurance provides predictability to a typically unpredictable financial dilemma. Instead of trying to estimate how many employees will need paid parental leave, forecasting their salary payments, reserving capital, and funding a paid parental leave program internally, your customers can pay a set amount in premiums and avoid surprises.

Reduces internal HR admin requirements

In comparison with STD, FMLA, and a mixture of state-funded leave and PTO, parental leave insurance is much simpler for employees to receive and understand their benefits and easier for internal teams to manage. Especially for smaller HR teams or companies who have employees across multiple states, this can be a huge time-saver and incentive to get started with parental leave insurance without the administrative burden of state or federal options.

Inclusive of all parents

The alternative options like STD often only apply to pregnant mothers. Dads, foster parents, adoptive parents, and others are frequently ineligible. But Boost’s parental leave insurance product covers all employees in the event of the birth of a child (natural or surrogacy), or the adoption or foster placement of a child into their home. Parental leave insurance provides equal benefits to parents regardless of their gender identification.

If you partner with small to medium businesses, offering parental leave insurance to your customers can help differentiate you from the competition. By providing your clients with this unique insurance product that can increase their employee retention and productivity, you can enhance your brand as a leader in your space. Establish your brand as one focused on employees’ well-being, while helping your customers do the same.

If you want to learn more about growing your customer LTV with Boost’s Parental Leave Insurance, contact us.

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Offering Insurance: Build, Partner, or White-Label?

Nov 1, 2021

So you’ve heard that the insurance market is set to pass $700B gross written premiums this year and that changing consumer expectations are creating big opportunities for companies that haven’t traditionally offered insurance. Now what? If you’re ready to get started with offering insurance, your options fall into three general buckets: build and sell the insurance product yourself from scratch, partner with an insurance company to offer their product, or work with an insurance-as-a-service provider to offer white-label insurance products. So, which is right for your business? We’ll go through what’s involved with the top 3 options, as well as some pros and cons to be aware of. Your first option for offering insurance to your customers is also the most intensive: you can create the insurance products you want to offer, in-house. With this option, you would essentially create a business within a business: an insurance agency that operates as part of your company. As with most business-DIY options, the big advantage of building your own is that you can create exactly what you want. You’ll be responsible for the concept, design, operations, compliance, and tech, so you can approach each area in a way that centers your business needs. Building a new business from scratch is never easy, but insurance is a particularly difficult vertical to get into. It’s complex and heavily regulated, and getting started requires a significant investment of time and money. How significant? Here’s a quick overview of the steps you’d need to follow to create your own insurance products and offer them on your website. All in all, you’re looking at a multi-year timeline to build your insurance products in-house from scratch, with a considerable financial investment as well. And that’s not even considering the ongoing financial investment to maintain them - long-term program management requires significant resources. Besides just the effort involved, the long lead time for getting an insurance product to market means that by the time you get there, the market may well have changed. On top of time concerns, there’s another disadvantage you should weigh before going the build route. Everything we just covered about starting your own insurance program probably falls outside your company’s core business and specialization. What’s more, recruiting and hiring the right people to manage it may be significantly more challenging than hiring the right people for your core business. It’s often difficult to know what to look for when hiring for a completely different skill set, outside your core industry. Once you’ve brought all these new people on board, you’ll also have to manage them in an area where your core leadership has little experience. Consider whether the benefits of building it yourself outweigh the inevitable distraction of running an entirely separate secondary business within your company. Instead of creating an insurance product yourself, you might choose to partner with an established insurance company to offer your customers their product. In this scenario, you would have a link on your site for the customer to buy insurance. When the customer clicks it, they would be taken to the insurance partner’s website to buy the product from them. This is sometimes called affinity marketing, or click-through affinity. In this situation, you would be essentially acting as lead gen for your insurance partner. Your partner may pay you a certain amount per click, but after that you would not participate in the transaction. Your insurance partner would complete the transaction, collect the premiums, and own the insurance relationship with the customer. A click-through insurance partnership like this is both fast and simple to set up. After you’ve worked out the details of the partnership agreement, all you’ll need to do is add the link on your website to direct customers to the insurer. A partnership like this is also relatively low-commitment. Because you’re simply passing web traffic on to the insurer, you can later switch insurance partners or even remove the insurance option from your site altogether with a minimum of disruption to your business. The easy setup of a click-through affinity partnership also comes with considerable drawbacks. Because you’re just providing a link to your partner’s signup form, you lose control of the customer immediately after they click the link. Whatever comes after that is up to your insurance partner. If the customer has a negative experience during the process, it might reflect badly on your brand for offering the referral. Even if the experience is a good one, losing control of the customer comes with another big downside: you also lose control of the revenue. The insurance customer relationship will be with your partner, and they’ll collect the premiums. While a click-through partnership is a fast and straightforward way to connect your customers with insurance, it also removes one of the major benefits of offering insurance on your site in the first place. With this option, you won’t see the kind of regular recurring revenue that you would if your company were able to collect the premiums. Further underlining that it’s not your product (or your customer), with this kind of partnership you’ll have little to no input into the insurance product you’re offering. Your insurance partner will build, develop, and sell the products that best fit their business interests, which may or may not be a good fit for your particular customers. As just another marketing partner, you won’t have much influence to try and get a product created that closely matches what your customers need from insurance. A relatively new third option is to work with a company that offers insurance-as-a-service, and white-label the insurance product they provide you with. If you aren’t familiar with insurance-as-a-service, it generally works like this: insurance-as-a-service providers are companies who have already done the work we outlined in Option 1 (Boost is one example). They’ll have all the necessary state licenses to create their own insurance products, and they will have already negotiated with licensed carriers to back those products. A good insurance-as-a-service provider will also already have built the necessary technology to offer an embedded insurance product experience. Your company can then sign on with the provider to offer one or more of the insurance products they’ve created, under your own brand name, on your company’s website or app. Unlike affinity partnerships, partnering with a white-label insurance-as-a-service provider doesn’t simply generate customers for someone else. Your company will be the one selling the insurance product, on your own website. The customer will buy the policy from you, and you’ll be the one to collect the premiums and own the ongoing customer relationship. White-labeling an insurance-as-a-service product offers many of the advantages of building it yourself, but at a fraction of the time and cost. Because your partner will have already done the heavy lifting on things like operations, technology, compliance, and capital, you can easily offer the right insurance products for your customers - and get to market in a dramatically shorter timeline versus trying to create an insurance company from scratch. A white-label insurance product also allows you to reap the full business benefits of offering your customers insurance: While white-labeling an insurance-as-a-service product is much faster and easier than building one yourself, it’s still more involved than simply adding a link to your website. Working with an insurance-as-a-service provider may take longer to implement than partnering with an insurer for click-through affinity since you will be building the full experience into your website rather than just linking out to an insurance partner's website. Selling white-label insurance policies also requires an important additional step: someone at your company will need to be licensed as an individual broker, and then sponsor a license for your company. You may recall this as Step 1 in the build process - the broker license is required to legally sell insurance, which your company will do with its insurance-as-a-service products. This sounds much more intimidating than it actually is. The insurance licensing process itself is relatively simple and straightforward. However, it does require additional effort from one of your employees (usually a senior executive who is unlikely to leave the company). The other good news is that not only is the licensing process easier than it sounds, but once it’s done, it’s done. You’ll need to maintain it with fees, renewals, etc, but you won’t need to go through the process again as long as that employee is still at the company. A good insurance-as-a-service partner will also help you with this step, so you can check the box and start offering insurance to your customers as soon as possible. The insurance market is changing quickly, and there’s never been a better time for new entrants to take advantage of the embedded insurance opportunity. Depending on the route you take to get there, however, the cost, time to market, and experience for your customers can vary a great deal. When starting on the road to offering insurance, it pays to carefully consider your budget, your timeframe, and your business goals, so that you can choose the option that’s right for your company. Is insurance-as-a-service the right option for you? Boost can help get you started. Contact us today to learn more about your options for offering the different ways to offer insurance with one of our Boost product experts.

The top 3 takeaways from our embedded insurance consumer survey

Embedded Insurance Survey Results: What We Learned From Consumers

Feb 3, 2023

You may have heard that embedded insurance is a big opportunity to grow your business, but are your customers actually interested? We wanted to get the story straight from the source, and so in Q4 2022 Boost surveyed 650+ US consumers. We asked about their experiences with insurance, how they felt about their current insurance options, and what mattered most in their insurance purchases. Here are the top 3 things that we learned from our consumer insurance survey results. [See Full Size] In our insurance survey, a whopping 73% of consumers had either already bought insurance from a non-insurance brand, or would be interested in doing so. While price was mentioned most often, other reasons included brand loyalty and convenience. Trust was another important factor. 62% of respondents were interested in buying financial products from a trusted brand, rather than a bank. For millennials, the number went up to 95%. First movers might have an advantage here as well. 20% of our respondents had never been offered financial products from a retail brand - but they liked the idea. All this is promising news for companies outside the traditional insurance sphere who are looking to build revenue and customer loyalty with embedded insurance. If you can deliver the product and experience consumers are looking for, the appetite is there. It’s hardly a secret that convenience is crucial to customer experience in the digital age, so it comes as no surprise that it was important to our respondents. 59% told us that they’d be more likely to buy insurance if it were offered digitally, as part of a related transaction. Younger consumers were more likely to be enthusiastic about digital insurance: nearly 70% of respondents aged 18-29 were interested in buying insurance directly through a transaction on a retail website. For half of our respondents, embedded insurance wasn’t a novel idea. 50% had already bought embedded insurance at least once, at the point of sale in a related transaction. For many consumers, insurance is a long-term purchase. 68% of our survey respondents told us they’d had the same insurance provider for at least two years, and 10% had had the same provider for more than five years. For retailers, insurance could also be an overall boost to retention. 62% of respondents said that when a retailer offered protect-your-purchase options, they were more likely to be repeat customers. Learn more about offering embedded insurance in our free guide, or contact us to get started.

How to Market & Sell Pet Insurance

Mar 11, 2022

Offering embedded pet insurance is a great way for companies that already serve pet owners to bring in an ongoing source of revenue. But just like every other product out there, marketing and advertising are key contributors to your overall sales. If you’re new to the industry, here are six pet insurance marketing tips to keep in mind when selling pet insurance. Because pet insurance is still relatively new in the US, some of your customers may not even be aware that it’s an option. So how do you convert them? From industry experience, we know that customers are most likely to sign up for insurance when it’s offered as a complement to their existing pet purchase. If you can make them this offer at the point of sale as an add-on to what they’re already buying, you are much more likely to win that additional revenue (and turn a one-time customer into an ongoing one). Your existing relationship with your customers can help you make the right insurance offer at the right time. From their purchase records, you probably already know what kind of pet(s) your customer has, and how much they tend to spend on pet expenses. Leverage that data in your pet insurance marketing strategy. A customer who regularly buys vitamins and specialty food for their pet might be interested in a wellness package. A customer with several pets might be interested in a multi-pet discount offer. Additionally, you likely have a database of prospects that you’ve identified as your target audience, but who haven’t purchased with you yet. Since you’re already actively marketing to this group, you can add your pet insurance offer into the mix and the additional value may help nudge them over the conversion line. Insurance is complicated, and sometimes consumers miss out on the coverages they need because the details are confusing or buried in legalese. As a trusted source for information about their pet, your brand is in a great position to break it down for them. In your pet insurance marketing, offer detailed explanations of how your pet insurance works, and what is or isn’t included, in clear, natural language that your customers can easily understand. Avoid confusing your customers with jargon or complicated legal statements, and don’t try to hide details in small print. Everything in your pet insurance advertising should be understandable by the average consumer, and any information about what is or is not included needs to be easily visible. One of the most powerful sales tools you can get is a real-life story about how your customer’s pet insurance made a difference for them. Consider reaching out to insurance customers who save on big bills, and see if they’d be willing to share their stories so you can leverage these in your pet insurance marketing. When sharing testimonials for insurance, there are a few things to keep in mind: This sounds like a marketing no-brainer, but this is particularly important for insurance advertising. If a state insurance commissioner finds your ads to be misleading or deceptive, you could be hit with fines and other enforcement actions, so it is always advised to be transparent when selling white-label pet insurance. If you use any statistics in your insurance ads, you’ll need to cite where that information came from. It pays to go the extra mile for good, credible sources - a great statistic isn’t so great if you have to attribute it to “koolstats4u.biz” in your ad. It’s a good idea to make sure that nothing related to insurance goes live without first passing a compliance review. If you use external marketing agencies for things like paid search ads, set up a review process to ensure that all insurance-related copy is vetted by your team before going live, including for A/B tests and similar experiments. If your company offers pet-related products or services, selling pet insurance is a great option and it is so easy to do with Boost. If you’re just getting started with pet health insurance, our team is here to help. Get in touch with us today.