Voluntary insurance is coverage 100% paid for by the employee. Voluntary plans have become a very fast growing benefits option. Increasing health insurance premiums with lower employer contributions with the constant demand to attract and keep employees has fueled the demand for voluntary insurance coverage

Companies may now offer employee benefits coverage's they could not afford before because employer contributions are not required for voluntary plans.

Voluntary plans when written thru a section 125 plan are pre-tax resulting in a better value for employees and their dependents. At the same time with proper enrollment and information the tax advantages of Voluntary Insurance Plans will help increase participation.

Employee Benefits Products Available on a Voluntary Basis
Not all insurance carriers have voluntary products. Some carriers specialize in voluntary plans while others will decline to issue a quote on any voluntary funded business. Even without every insurance carrier in this industry segment almost every insurance coverage ranging from Group Health insurance to Legal Service plans is available on an employee paid basis.

Underwriting Restrictions
In general underwriting for voluntary plans is stricter than for employer paid coverage's. Voluntary insurance policies typically require a minimum participation level higher than employer funded plans. For example a company may need to have a minimum of 25% of all eligible employees elect coverage. Also common is a minimum business size, such as 50 employees. Some insurance carriers combine both parameters for eligibility such as the greater of 25 lives enrolled or 25% of eligible employees must participate to be eligible for benefits. Underwriting places these conditions to have a higher risk pool. Insurance carriers know voluntary coverage is risky so they have more underwriting demands in an effort to keep their block profitable.

How Voluntary Benefits Work
The law of large numbers is how a group may purchase a voluntary plan with richer benefits at lower rates than they could as an individual. By spreading the risk over a group of 25 employees the insurance carrier with proper underwriting is assuming less risk.

Could Voluntary Benefits help my Company?
Yes. The answer is simple. Proper analysis and consulting will help meet specific employee benefits needs for each business however let's use two examples to make this point.

Rich company has every coverage Life, STD, LTD. LTC, Health, Vision etc... paid for by the employer. However a voluntary plan could also be for supplemental coverage to go above and beyond company paid benefits. This is especially helpful for coverage's like disability and life insurance which under group plans typically do not cover all employees to necessary levels. In addition the group could get a "perk" benefit like a legal services plan for very little cost and possibly on a pre-tax basis.

Start-up Company has 20 employees but no benefits. A smart move by human resources would be to put together a voluntary health, dental, life, and disability plan for their workers. This groups size and pre-tax billing ability would make these benefits available and affordable. Adding to the company's long term growth goals by retaining and attracting employees.

Guaranteed Issue
In addition to offering benefits at pooled rates with typically increased features voluntary plans may offer something more important: Guaranteed acceptance. For example lets use life insurance, not all individual applicants get accepted for coverage. Under a group voluntary plan that individual would be eligible for coverage if the plan quoted with a minimum guaranteed issue amount.