Voluntary Benefits – “What is the Benefit?” – Part 3 – Frequently Asked Questions.

Voluntary benefits are offered by employers but are paid completely or mostly by employees through payroll deferral. Traditional voluntary benefits include life insurance, vision, dental, disability, cancer and critical illness insurance, and accident insurance. Below are some of the more common questions pertaining to the benefits.

Who can get voluntary benefits?
Is there a minimum number or percentage of employees that must participate in voluntary benefits for them to be viable? 
Minimum participation requirements depend on several factors, such as the number of eligible employees and what products are offered. Typically, the minimum number would begin with three to five employees.

Can part-time workers buy or receive voluntary benefits? 
Generally yes, as long as they work a minimum number of hours to meet the eligibility criteria for coverage.

Can a contractor be added to voluntary benefits?
 Typically, independent contractors cannot be covered under the employer’s policy. However, individual policies for some benefits are available.

Can non-profit organizations offer voluntary benefits? 
Yes, non-profit and charitable organizations can offer voluntary benefits to their employees.

As a business owner, can I also receive coverage through the voluntary benefits that I am offering to my employees?
 Yes. A business owner can apply for voluntary benefits coverage – just like their employees would do.

Are family members able to get voluntary benefits? 
Yes. Many voluntary benefits provide the ability to cover your spouse and eligible dependent children.

Are there age limits for certain voluntary benefits?
 Each product will have its own unique age requirements. These limits are designed to be flexible to allow the majority of employees actively at work the ability to apply for coverage.

Can home-based or remote workers receive voluntary benefits?
 Yes, if they meet the requirements of being full-time eligible employees.

If you already have an existing medical condition can you get coverage? 
It depends on the type of product. Some products will require eligible employees to be medically underwritten before they are issued coverage. Other products offer guaranteed-issue coverage, meaning employees can get coverage without answering any medical questions. Certain products may have a pre-existing condition limitation, which means a certain period of time must pass before the person is covered. It’s important to understand any limitations or exclusions specific to the product.

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 into 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.

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