What You Need to Know about Voluntary Benefits

by Logan Mangold, Employee Benefits Sales Executive

What are Voluntary Benefits?

Sometimes called “supplemental insurance,” these benefits are paid directly to the policyholder to help in the event of an unexpected injury or illness. The money received can be used for things other insurance may not cover, such as lost wages, out-of-pocket expenses, and household bills. The most popular coverages include Accident, Hospital Indemnity, Short-Term Disability, Cancer, and Critical Illness.
 
Companies can choose whether voluntary benefits are fully funded by the employee or contribute to cost in the form of a defined contribution. This ensures that voluntary benefits can fit into any budget and provide the employer with flexible billing options.
 
Why are Voluntary Benefits important to my business?
 
Voluntary benefits can help attract top talent by enabling a provision of a variety of benefits to help them stand out amongst competitors. At the same time, they can be a useful tool in retention: a benefits package that an employee has chosen and that’s tailored to their specific needs is difficult to give up. This shows your employees that you care about them enough to provide many options that can fit their unique circumstances.
 
Voluntary benefits can help employers with rising health care costs. With health care costs continuously increasing year after year businesses are struggling with how to offer the same quality of coverage without going over budget. One way voluntary benefits can help is by combining a Hospital Indemnity plan that acts as a GAP coverage with the major medical plan. Now the employer can look at a plan with a higher deductible which will save money but the employees are still experiencing the same out of pocket costs. This solution of combining a high deductible health plan with a supplemental hospital plan typically costs less than going with a lower deductible option and is very well received by the employees.
 
Why are Voluntary Benefits important to my employees?
 
Voluntary benefits provide flexibility and customization through a wide variety of plan options and even some guaranteed issue options. This ensures there is coverage available for their personal circumstances and lifestyle, regardless if they are 20 or 50 years old. Voluntary insurance is portable from job to job and upon retirement at the same rate, so these benefits can be utilized throughout their entire life. Affordability is key to voluntary benefits which is why most plans have multiple options to fit any budget.
 
Core benefits can be enhanced with voluntary benefits without breaking the bank. Even the best medical plans have out of pocket expenses associated with it and Americans are struggling to pay these expenses. 48% of the workforce say they couldn’t pay $1,000 or more in out-of-pocket medical expenses without going into debt or using a credit card if an unexpected injury or illness occurred today. Voluntary benefits help take on some of that financial burden and provides your employees with peace of mind.
 
Who qualifies for Voluntary Benefits?
 
Employers with at least two employees can offer voluntary benefits into their business and utilize payroll deductions. These benefits can be offered to part-time and full-time employees, up to the discretion of the employer.
 
Employers with 1099 contract workers are able to offer voluntary benefits plans with some limitations on coverage options and billing methods.
 
We also have a program set up through SFFMA to be able to offer voluntary benefits to volunteers and their families. The rates are the same as if going through an employer which is typically uncommon.
 
If you have questions or would like to see how voluntary benefits can positively affect your business and employees, please reach out to Logan Mangold at [email protected] or (979) 540-7736.

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Logan Mangold
Employee Benefits Sales Executive
(979) 540-7736
[email protected]

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