Voluntary Plans

Voluntary Employee Benefits allow you to offer your employees and their dependents the benefits they want without impacting your employee benefits budget!

Voluntary employee benefit plans differ from traditional group plans in several key areas:

Contributions

Traditional group benefits (such as medical, dental & disability) require the employer to pay some portion of the premium. Voluntary programs require No Employer Contributions! These programs are paid 100% by the employee through the convenience of payroll deduction. Even though no employer contribution is required, some employers choose to subsidize a portion of the premiums. The employees may pay their premiums (for certain products) on a pre-tax basis through a Section 125 plan. The result is a tax savings for the employee as well as the employer!

Enrollment Percentage

Traditional group benefits require high levels of participation, typically 75%. Voluntary programs require only 20% of the eligible employees to enroll.

Design Issues

Voluntary programs must be designed to deal with adverse selection. If you were an insurance company would you sell guaranteed issue life insurance to patients in the intensive care unit of your local hospital? Offering your employees a voluntary insurance plan has the same initial effect. Everyone who needs a new bridge or crown can't wait to sign up for a new voluntary dental plan so they can go out and have their work started. Properly designed voluntary plans take adverse selection into account through plan design and pooled risk.

No Employer Costs

Voluntary benefits are a great way to provide employees with the benefits they want and desire with little or no cost to the company. Any additional administrative costs can be offset by the payroll tax savings the employer gains from Section 125.
Highly Desired Benefits
How many times have employees or prospective employees asked about benefits like dental, disability or additional life coverage?

Employee Retention

Companies with strong employee benefits packages have lower employee turnover and find it easier to attract prospects looking for employment. This is critical when the employment pool is reduced due to high levels of employment.

Group Rates

By utilizing the purchasing power of your group, the employees get access to benefits at low group rates.

Favorable Underwriting

Disability coverage and life insurance are extremely difficult to find on an individual basis if the insured has a less than favorable medical history. These voluntary products have simplified underwriting requirements or in many cases are guaranteed issue (no health questions!).

No Secondary Market

Some programs (i.e. Indemnity dental plans) are only available through employer sponsored plans. Employees can not go home and contact their local insurance agent to purchase coverage.

Promotes Goodwill

Employees who choose to participate appreciate the opportunity to select an extra coverage they believe is necessary for their insurance needs.