Administration and cost
How much administration is incurred by offering voluntary benefits?
If you find a good carrier, very little. Many offer administrative services such as online billing and payments at little or no cost.
Can employees add coverage throughout the year, or is this limited to an annual enrollment window?
This decision is partly up to the employer. For benefits paid on a pre-tax basis, changes are only allowed annually. Otherwise, an employer can decide how often they would like to make benefits available.
Can employees take their benefits with them if they leave the company?
Many carriers offer voluntary benefits that are portable, meaning employees can take the coverage with them if they change jobs or retire – as long as the premiums continue to be paid.
How much do voluntary benefits cost?
Voluntary benefits range in cost. This can vary based on the type of product, the age of the applicant, their use of tobacco and other factors. Voluntary benefits are designed to be affordable for a wide range of incomes.
What are the tax implications of voluntary benefits?
Some voluntary benefits can be deducted from paychecks before tax – offering savings for employees – whereas others must be paid for after. Your accountant will be best suited to talk to you about the tax savings and implications in offering voluntary benefits.
Health care and voluntary benefits
How do voluntary benefits tie in to the Affordable Care Act (ACA)?
Most voluntary products are considered “excepted benefits” under the current ACA regulations, so are not impacted. A voluntary carrier experienced in benefits communication and education can help educate your employees on their health options – including how this varies by state – and review their individual situation to identify any gaps they may want to fill with voluntary benefits.
Is health insurance available as a voluntary benefit?
No. Health insurance is not a part of voluntary benefits. However, supplemental health benefits can help alleviate some of the out-of-pocket costs that major medical plans may not cover.
Can voluntary benefits be offered if health insurance is not?
Yes. They can and often are. However, it’s important that your employees understand the coverage is limited and is not health insurance.
Does an existing cafeteria plan need to be modified to allow for additional voluntary benefit plan options?
It depends if voluntary benefits will be paid for with pre-tax or post-tax dollars. If paid via post-tax dollars, the plan would normally not need to be modified. If premium is paid pre-tax, the plan would need to be modified.