Voluntary Benefits FAQs
Some of our most frequently asked Voluntary Benefit questions:
What are voluntary benefits?
Voluntary Benefits are insurance plans marketed through the workplace on a payroll-deducted basis. They are voluntary for employees to participate in and require no employer contribution.
What does disability insurance cover?
Disability insurance protects you in the event of an illness or injury that prevents you from working. The disability benefit is designed to help pay your mortgage/rent, car payments, grocery bills, medical bills, etc. There are no restrictions on what this benefit can be used for.
The amount of disability benefit received depends upon the plan selected. Most plans average 60% to 66.66% of pre-disability earnings. This amount can be set up to be a tax free benefit, but in most cases it is taxable. Some plans can even cover up to 75% of pre-disability earnings.
Are voluntary benefits a good fit for my organization?
Offering voluntary benefits enhances the existing employee insurance offerings with no cost to the employer. Employees are given access to affordable benefits that can protect them financially in the event of unexpected medical need or claim. Knowing they have personal stop-loss coverage can relieve your employees’ financial stress and provide peace-of-mind.
What is the difference between short-term disability and long-term disability insurance?
Short-Term Disability insurance normally covers the first three to six months of an injury or illness that prevents you from working. Benefit duration is generally 12-24 weeks. Childbirth is generally covered under Short-Term Disability.
Long-Term Disability insurance provides income protection when an injury or illness prevents you from returning to work. The benefit duration ranges from two years to Social Security Normal Retirement age. To illustrate the importance of long-term disability insurance, consider that the average claim lasts 2.6 years.
What are some popular types of voluntary plans?
Accident Plans: Provide benefits to help cover the costs associated with unexpected medical bills that can arise due to an accidental injury.
Critical Illness & Cancer Plans: Pay lump-sum benefits in the event that you or a covered family member is diagnosed with a covered critical illness. This money can help pay for medical bills, living expenses while you are out of work, or any other financial needs that you may have.
Hospital or Indemnity Plans: Provide financial help to supplement your current coverage. Your health insurance plan may pay only a portion of the total hospital stay or medical treatment costs. This plan can help cover those expenses and protect your savings.
Short-Term Disability Plans: Short-Term Disability coverage can replace up to 66.67% of your income if you are unable to work due to a covered illness or injury.
What if our long-term disability maximum benefit does not adequately cover some of our employees?
For high earning executives, the traditional group disability maximum benefit is usually too low. Putting an executive disability insurance policy in place allows your high-earning executives to obtain a monthly benefit much closer to their current take-home income level, should they need to utilize disability benefits.