Group Legal Plans Help with Personal Financial Challenges

Aid for debt negotiation and bankruptcy, and for preventing problems

By Marcia Bowers, Hyatt Legal Plans Sep 28, 2009

Employees have an unprecedented need for personal financial and legal advice on issues such as debt, bankruptcy, lease renegotiations and mortgage refinancing—at a time when many can ill afford to hire an attorney. Meanwhile, employers are worried about workplace productivity as they look to improve morale without increasing their benefits spending.

One answer: group legal plans offered through the workplace and typically funded via payroll deduction as a voluntary benefit. These plans provide access to legal representation for issues including many personal and financial-related challenges confronting more workers as a result of the recession and its lingering economic impact.

A Growing Need

During the first half of 2009, personal bankruptcies increased 35 percent over the same period in 2008, according to the American Bankruptcy Institute, and foreclosure filings rose 15 percent, according to RealtyTrac.More than one-third (36 percent) of U.S. employers observed an uptick in the number of employees taking hardship withdrawals from their 401(k) and 403(b) retirement plans during the third quarter of 2009, a Watson Wyatt report reveals.

While employee assistance programs can provide access to personal counseling, and investment advice can help with long-term wealth accumulation, immediate financial challenges often arise that require the services of an attorney. Group legal plans are able to provide employees with full representation on many personal, financial and contractual matters, allowing them to receive immediate, expert advice as if they had a lawyer on retainer.

Employees can prevent problems by having an attorney review their mortgages, leases and home equity loan documents—or using an attorney to dispute property tax assessments. During the first half of 2009, use of Hyatt Legal Plans1 services for refinancing and home equity loans grew by 192 percent compared with the same period in 2008. Similarly, the use of plan services for property tax assessments increased by 88 percent, while personal bankruptcy services increased by 62 percent. Consultations on general financial matters were up 60 percent.

Work/Life Balance: In Short Supply

Of all the losses workers experienced because of the downturn, none is more pronounced than work/life balance. As employees struggle to keep abreast of their finances, many find themselves juggling personal issues that are every bit as complex—and often more emotionally draining—than their work challenges. Access to legal advice at work can increase peace of mind and reduce workplace disruptions.

According to a 2009 Corporate Executive Board (CEB) survey, only 30 percent of U.S. employees were satisfied with their level of work/life balance, compared to 53 percent one year earlier. In fact, the CEB survey found that employees who are satisfied with their work/life balance are far more engaged in their jobs, working 21 percent harder than those who aren’t satisfied. And they are 33 percent less likely to leave their organization.

Retention Premium

Despite weakness in the labor market, retention remains a top priority. For the second year in a row, MetLife’s 2009 Study of Employee Benefits Trends found that “retention” and “cost controls” topped employers’ list of benefits objectives. The Watson Wyatt survey affirmed that 52 percent of employers are more worried about retaining their top performers and critical-skill employees than they were before the economic downturn.

Group legal plans can build job satisfaction among top performers by alleviating complex legal and financial distractions. Employees can use group legal services for a wide range of routine and distress-related legal issues, including home equity loans, refinancings, sale or purchase of a home, review of mortgages and deeds, property tax assessments, debt collection proceedings, foreclosure, and personal bankruptcy.

Ease of Administration

Group legal plans can help employees make savvy financial decisions, resulting in increased productivity and workplace satisfaction.

For employers, group legal plans have an additional benefit: They are cost-effective and easy to implement and administer. When implementing a group legal plan, employers incur little or no cost because the plan typically is funded fully through employee payroll deductions. Enrollment files require minimal employee data, which makes the plan simple to manage.

For employees, group legal plans are affordable (usually less than $20 a month) and offer the convenience of making payments through payroll deductions. Typically, a group plan pays for itself the first time a plan member uses it to resolve an important legal issue.

Marcia Bowers is marketing director at Hyatt Legal Plans, a MetLife company that provides participants with legal services from a national network of participating law firms or attorneys of their own choice.

1Group legal plans are provided by Hyatt Legal Plans, Inc., Cleveland, Ohio. In certain states, group legal plans are provided through insurance coverage underwritten by Metropolitan Property and Casualty Company and Affiliates, Warwick, Rhode Island.

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