Voluntary Employee Benefits allow employees who want more benefits to choose and pay for what they can afford
By Fred Fischer, Benefits Director, CFP, Inc.
The MetLife 8th annual Employee Benefits Trends Survey said that benefits was the number two job satisfaction factor, second to job security, with compensation following in third place. Surveyed employees indicated the top five advantages of Employer offered Voluntary Products are:
1) Payroll deduction is a convenient way to make payments
2) Group products are available without medical underwriting or exams.
3) It is more convenient then shopping individually
4) They trust their employer to screen insurance carriers to find the best products and services
5) Buying voluntary products through their employer saves time.
Many employers are increasing medical insurance deductibles to offset annual cost increases. Group dental, group life and other benefits are being discontinued because of increased medical insurance expense. Higher deductibles are usually paired with a higher out of pocket maximum cost for the family’s medical expenses. By offering voluntary benefits, employers can help employees to close the gap between the medical insurance provided and the personal financial risk that comes with higher out of pocket expenses. Voluntary benefits (no premium cost to the Company) can be purchased individually for accidents, cancer, hospital confinement, life insurance, disability, and dental insurance. The medical voluntary products are designed to offset the shock costs associated with hospitalization of a family member. Those employees who want more insurance can pick and purchase what they can afford. We have a number of companies that now offer voluntary dental insurance to their employees. Voluntary benefits play an important role in employee benefit packages, helping companies balance employee needs with tightening budgets. Employer contributions are not required for voluntary plans.
Voluntary plans when written thru a section 125 plan can be paid for with pre-tax income resulting in a better value for employees and their dependents. Available plans include basics such as Dental, Vision, Life Insurance, and Disability, as well as plans that can help fill gaps caused by higher deductibles such as Critical Illness and Accident Plans. A few types of voluntary benefits available today are:
| Type of Coverage | Benefits |
| Accident Plans | An Accident Expense Plan is designed to help cover expenses associated with an accidental injury. It pays the employee directly, regardless of other insurance. |
| Disability | Disability plans are designed to replace income in the event an employee is injured or ill and not able to work. |
| Hospital Confinement Indemnity | Plan pays a set benefit when a person admitted to a hospital. |
| Life /Accidental Death | Voluntary Life Insurance may be either a set benefit, or employees may choose to increase their benefit with minimal underwriting. |
| Specified Health Event | These plans pay benefits when a covered individual is diagnosed as having a covered medical condition. Plans may cover single or multiple diagnosis such as heart attack, cancer, or coma. |
Voluntary benefits are a good way for employers to offer employees a way to close the gap between what benefits they have, and what benefits they want without additional cost burden to the employer. Each employee can make their own decision on what additional protection or insurance they would like to have, and how much they want to spend. Voluntary benefits can be added at any time. We have available a number of voluntary benefits and companies to advise or assist you in deciding if you want to offer this option to your employees. Contact CFP at (866-532-0417) or by email at benefitshelp@cfpinc.net and we will be glad to provide more information on voluntary benefits for your company and employees. We are the endorsed benefits agent of the AOL and appreciate any opportunity to help you with your benefits planning.
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