Voluntary Insurance Benefits
Voluntary benefits are insurance products such as dental, vision, life, disability, supplemental health and cancer insurance that are offered on a voluntary basis by many employers. Employers offer voluntary benefits because they provide companies an opportunity to offer a more rich benefit package at no additional cost to them. The benefit to employees is they may choose to purchase these benefits through their companies at rates that are lower than they could get on their own.
How do voluntary benefits work?
If an employee wishes to purchase disability insurance to help offset the income lost if unable to work due to sickness or injury, the amount of the premium for that employee would be deducted from the paycheck each month (week or bimonthly). An employee may also choose a supplemental insurance plan to help cover deductibles, copays and other costs of care not covered by his health insurance. Supplemental benefits are paid directly to the employee so the money can be used however the employee chooses.
Advantages of Voluntary Insurance
Offering voluntary benefits provides a more robust benefit package for employees to help protect their health and their savings. The premiums are paid with pre-tax dollars and therefore employees save money on taxes. Benefits such as short-long term disability provide employees a portion of their salary if they were to be out of work for any length of time. Voluntary benefits provides the opportunity for employers to lower payroll taxes with each enrolled employee.