What is Parental Leave Insurance?
May 10, 2022
If you’ve never heard of parental leave insurance, you’re not alone. Parental leave insurance is a relatively new product on the market but an increasingly necessary one. Let’s explore a few of the reasons why parental leave is important and what solutions insurance can offer. Becoming a new parent is a major life event that can be happy and exciting, but it can also present challenges in the workplace for both employees and employers. Over 60 million Americans are parents, but the U.S. is one of the few countries worldwide with no universal parental leave requirements. As such, nearly 30% of working women quit their jobs after giving birth. In states that do require paid parental leave, however, the rate of mothers leaving the workforce dropped 20-50%. It’s no surprise that according to recent studies, “When deciding to accept a job offer, 66% of employees said the employer’s paid parental leave policy is important.” Parental leave is a significant DEI issue for retaining female employees who become mothers. Social and cultural shifts over the past few decades have made this issue more important than ever. “With the increase in female employment rates, coupled with the decline of the male breadwinner family model…entitlements to job-protected leave after childbirth has become important policy measures to support parents” (EIGE). Employees ranked parental leave as the third most desired benefit, outranked only by flexible work and paid insurance premiums, but many small and medium enterprises (SMEs) don’t offer it. In fact, only 23% of private employers in the U.S. offer paid parental leave in their benefits package, which puts SMEs at high risk of losing their employees when parenthood arises. Though paid parental leave is a highly requested benefit, it can be expensive for businesses to cover. For SMEs, this often prohibits them from offering any benefit at all. Adding to the difficulty, paid parental leave is also an unknown liability on the balance sheet. Employers can't predict if or when their employees will use it, which translates to a potentially large expense that they can’t accurately plan and budget for. The Facebooks and Googles of the world can afford to be generous and pay that out of pocket, but many smaller companies can't. This puts those smaller companies at a disadvantage for both acquiring and retaining talent. In the absence of a national parental leave solution, it’s up to the private sector to find ways to support new parents in the workforce. Parental leave insurance is a business insurance innovation designed to make parental leave affordable for small and medium enterprises. This is how it works: an insurance provider offers the parental leave insurance product, sometimes as part of a larger business insurance suite. The SME chooses a package that covers the kind of leave they want to offer their employees. This includes factors like what percentage of the employee’s salary will be covered and the length of leave the SME will offer. The SME then buys the policy, and pays the insurance provider a recurring premium based on their selected benefits and employee demographics. When a covered employee takes parental leave, the small or medium enterprise will file a claim through their insurance provider’s claims process. The SME will then be reimbursed for the cost of paying the employee during the covered leave period, as spelled out in the parental leave insurance policy. It’s a solution for providing this benefit that mitigates large, unexpected leave costs. Instead, the employer pays a regular, planned amount in premiums, and can rest easy knowing their insurance policy will protect them. No more unknown liabilities on their balance sheet. Meanwhile, the SME can reap the benefits of attracting and retaining top talent by offering parental leave. With over 30 million small and medium enterprises in the U.S., there is a significant opportunity for insurtechs and embedded insurance providers to help businesses affordably provide this valuable benefit to their employees. Offering a first-of-its-kind, highly desirable insurance product is a forward-thinking way to set yourself and your clients apart in the market. By offering parental leave insurance, you can help your clients attract and retain top talent. Employees are far more likely to work for a company where they feel supported, and this product is an effective way to establish your brand as focused on employees’ well-being while helping your clients to do the same. More than ever, employees want competitive, comprehensive, and inclusive insurance packages, and offering parental leave is an opportunity to positively impact employee experience and perception of their employer. Additionally, adding parental leave insurance to your product lineup creates new cross-sell opportunities to boost revenue and LTV with your existing customers, and deepens their business relationship with you. Parental leave insurance provides an opportunity to stand out from the competition. This is a first-of-its-kind product that is not being offered by many insurtechs, but benefits employers and employees alike. You have the opportunity to get ahead of the curve with this innovative white label insurance product. If you want to learn more about growing your customer LTV with Boost’s Parental Leave Insurance, contact us. Continue Reading
Why Parental Leave Insurance is a Better Option for Your Customers
March 24, 2023
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. 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%. The leave options available to U.S. businesses and prospective parents can vary widely based on location, length of employment, and more. 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) 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. 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. 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. 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). 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. 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: 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. 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. 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. 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. Continue Reading
How it Works to White-Label an Insurance Product with Boost
August 4, 2023
White-labeling insurance products can be a great option for insurtechs looking to expand their lineup: it’s a faster, more cost-effective route to growing revenue with additional insurance lines. It’s also one of our primary offerings here at Boost. If you’ve ever wondered how that works exactly, then this blog is for you. We’ll walk through the whole process of partnering with Boost to offer white-label insurance products, and what to expect at each step. The first step to white-labeling with Boost is to choose which of our products you’d like to offer your customers. Boost offers a range of both personal and commercial insurance products to our partners, from popular products like pet health insurance and commercial cyber insurance, to innovative new products like parental leave insurance. White-labeling with Boost offers several advantages versus reselling a traditional carrier product: Customizable products. All of Boost’s products are developed in-house by our team of insurance experts. Since we control the product, we can allow our partners much more flexibility in what to offer than is possible with legacy products. Our insurance products were designed to be modular, with many coverages optional. Faster time to revenue. A streamlined deployment process powered by APIs (more on that later) means you can be in-market with a new product - and generating premium - significantly faster than with traditional carriers. Built-in capacity. Boost has assembled a panel of reinsurance partners to ensure plentiful insurance capacity for our partners, and all Boost products are offered on ‘A’-rated carrier paper. You’ll never need to worry about limited capacity artificially restraining your growth. Once you’ve decided on the products you want to offer, the next stage is configuration. Boost is set up to offer our partners a foundation to grow on (our favorite analogy is that Boost is the AWS of insurance). That means providing the flexibility to set up and run your white-label insurance program in the way that’s best for your business. Select your coverages.You know your customers the best - what they care about, and what they don’t. You can choose from Boost’s available coverages to build a package that will best fit what your customers actually want, at a price that works for them. Choose how to handle billing. Already have the ability to process payments? You can manage billing entirely in-house. Rather not deal with it? Boost can handle it for you. It’s up to you. Prepare for claims. Your insured customers’ claims can be handled either in-house by Boost, or by one of our fully-licensed TPA partners. Boost’s platform includes an FNOL API that will allow your customers to file a claim online, with no manual steps required. As part of the implementation process, you’ll integrate this API with your digital property. If you plan to also take claims through other channels like phone calls or email, we’ll work with you on how to send the information on to us and open a claim. There’s no one-size-fits-all for insurance providers, and it’s important for our partners to be able to grow their business in the way that’s right for them. We’re here to provide as much or as little support as you need in managing your program. We get it: you’ve invested a lot of time and resources in getting to know your customers,, and you care a lot about their experience with your brand. That’s why working with Boost gives you full control over building the insurance experience, while our platform provides the infrastructure that allows you to run the program. When you white-label with Boost, the entire program is offered under your branding (right down to the policy documents), and your customers never have to leave your existing site or app. Since your business builds the front-end, you never have to worry about compromising your brand. You’re free to create the perfect purchase flow to engage your customers. The transaction itself is powered by Boost’s policy administration system, which allows for seamless, end-to-end digital management of the entire policy lifecycle. All Boost products are already pre-configured with our PAS, so all you’ll need to do to get started is connect your front-end with the PAS via API. Boost’s insurance API was designed by developers, for developers, and built to be extensible, modular, and easy to use. We provide personalized API documentation with real-time updates, and permanent access to a dedicated testing environment to help your developers get up to speed quickly. An easier development process means a smoother deployment - which means you’re in-market and collecting revenue sooner. Once the integration is finished, your new program is ready to start signing customers. Beyond just the initial purchase, Boost’s PAS also enables you to handle later transactions digitally as well, such as policy modifications and renewals. Your customers will be able to manage the entire lifecycle of their policy from your site or app, seamlessly and lightning-fast. For any new product, of course, the launch is only the beginning. As you sign more customers and your program scales, Boost’s infrastructure scales along with you. And if you decide to offer additional white-label products? Just update your configuration in the API. Growing your GWP has never been easier. Thinking of expanding your portfolio with a white-labeled insurance product from Boost? Get an overview of our platform and products, or contact us to get started. Continue Reading