Introduction: What Are Voluntary Benefits?
Voluntary benefits are benefits added to your core compensation and benefits package. When you are offered these benefits, you can pick and choose what you want and need. Voluntary benefits can be either insurance or non-insurance products, and these benefits provide you value in different ways.
For voluntary insurance benefits, you can take advantage of lower group rates, the convenience of automatic payroll deductions and sometimes pre-tax deductions. Most voluntary insurance products have portable coverage, which means you can keep your policy if you end up leaving your employer. You will typically pay 100% of the premium for voluntary coverage. Automatic payroll deductions ensure you never miss insurance premium payments and accidentally trigger a lapse in coverage.
Non-insurance voluntary benefits may also be offered by your employer to add extra value to your benefits package. Many of these benefits are designed to offer simplicity, convenience or money-saving options for various aspects of your life. For example, an employee discount program helps you save money on a variety of items and services simply for being an employee of your company.
As employers explore ways to add value to the benefits packages they offer you, many voluntary benefit offerings are expanding beyond traditional voluntary benefits, such as dental and vision insurance, to more specialized offerings such as adoption assistance and pet insurance.
Traditional Voluntary Benefits
Traditional voluntary benefits are insurance products that are useful to most people, and most employees would at least consider purchasing them. Many of these voluntary benefits supplement a regular medical insurance plan or contribute to your financial security should you suffer from a severe illness or disability.
You might already be familiar with dental and vision insurance products, which are commonly offered; traditional voluntary benefits also include long- and short-term disability, long-term care, critical illness, cancer, life and accident insurance plans.
Aside from protecting your smile, dental care ensures good oral and overall health. Several studies suggest that oral diseases, such as periodontitis (gum disease), can affect other areas of your body—including your heart. Understanding and choosing dental coverage will help protect you and your family from the high cost of dental disease and surgery.
What Is Dental Coverage?
Dental coverage is similar to regular medical insurance and is one of the voluntary benefit options employers commonly offer. When you have dental insurance, you pay a premium and then your insurance will cover part or all of the cost for many dental services.
Like medical insurance, dental coverage is offered in several types of plans:
Dental health maintenance organization (DHMO) – Coverage is only provided when you visit dentists who are in the insurance plan network.
• Dental preferred provider organization (DPPO) – Coverage is provided with in- or out-of-network dental care providers, but you will typically pay less with an in-network dentist.
• Dental indemnity plan – Coverage is provided for any dentist you choose, with no difference in cost.
• Discount dental plan – This type of plan is a common option for reducing dental costs without regular insurance coverage; with this plan, you pay for all your dental care at an agreed-upon discounted rate.
What Does Dental Insurance Cover?
Dental coverage focuses on preventive and diagnostic procedures in an effort to avoid more expensive services associated with dental disease and surgery. The type of service or procedure determines the amount of coverage for each visit. Each type of service fits into a class of services according to complexity and cost. Dental services are generally broken up into the following classes:
• Class I – diagnostic and preventive care (cleanings, exams, X-rays)
• Class II – basic care and procedures (fillings, root canals)
• Class III – major care and procedures (crowns, bridges, dentures)
• Class IV – orthodontia (braces)
Because dental coverage typically focuses on preventive care, Class I services are covered at the highest percentage. Class II services are then covered at a slightly lower percentage, followed by Class III services, which are covered at the lowest level. For example, if a plan follows a “100-80-50” structure, Class I services are covered at 100%, Class II at 80% and Class III at 50%.
Class IV services are frequently covered under a separate lifetime maximum (instead of the annual maximum) and often limit coverage to children under the age of 19.
In addition to the class of service, coverage also depends on other factors. Several common services are limited by frequency. For example, most plans will only cover two cleanings and exams per year. For more complicated procedures or surgeries, coverage is often limited to a maximum dollar amount, such as $1,500 per year. Age is yet another factor that determines coverage. For example, fluoride treatments are typically covered for children, but not adults. Cosmetic procedures, such as teeth whitening, are rarely covered.
How Does Dental Insurance Work?
Dental coverage works similarly to a medical insurance plan. You pay premiums, and then the insurance will cover dental costs according to the benefits listed in the plan. The routine exams and cleanings are usually covered at 100%, but other services are often subject to a deductible and copay. The deductible is the amount you must pay before your insurance will pay. After you meet your deductible, you may be responsible for a copayment (flat amount) or coinsurance (percentage of cost), which is the part of the treatment cost that you pay. For example, if you have a filling done and have already met your deductible, but you have a 20% coinsurance, the insurance will cover your filling at 80% and you would only have to pay the other 20% of the charge. Every plan is different, so you will need to read your benefit information carefully to understand your coverage.
Some dental plans, usually individual plans, enforce a waiting period. This waiting period means you will not have coverage for certain services (usually Class III procedures) until you have had the plan for a designated amount of time, such as six months. Waiting periods prevent a person from purchasing insurance shortly before major dental surgery and then dropping coverage as soon as the policy expires.
How Has Health Care Reform Affected Dental Coverage?
Under the Affordable Care Act (ACA), dental services are an essential health benefit for children under the age of 19, although individual states can choose to extend the age limit beyond this baseline. Declaring pediatric dental care an essential health benefit means that, beginning in 2014, all non-grandfathered medical health plans must offer dental benefits for children unless certified stand-alone coverage is available. Non-medically necessary orthodontia is not included in the essential health benefits definition.
The essential health benefit status for dental coverage does not apply to adults. In addition, unlike medical insurance, you do not have to obtain dental coverage to avoid penalties.
Driving to work, reading a news article and watching television are likely activities you perform every day. Your ability to do all of these, however, depends on your vision and eye health. Routine eye exams will help maintain your vision as well as detect various eye problems and concerns about your overall health. Obtaining vision insurance is a way to make sure you can continue enjoying good health as well as the sights around you.
What Is Vision Insurance?
Vision coverage is similar to regular medical insurance and is one of the voluntary benefit options commonly offered by employers. When you have vision insurance, you pay a premium and the insurance company will cover part or all of the cost for vision care. Vision coverage is available in two basic types of plans:
• Vision benefits plan – This type of plan is regular insurance coverage. Depending on the specific plan, coverage may differ between in- and out-of-network eye doctors. You will typically pay a portion of your eye care cost through a deductible and coinsurance or copayments.
• Discount vision plan – With this option you can choose to reduce vision costs without regular insurance coverage. You pay for all your vision care, but at a reduced rate.
What Does Vision Insurance Cover?
Vision insurance generally provides coverage for basic care and eyewear. Most vision plans will cover the following services:
• Annual or biannual eye exams, including dilation
• Eyeglass frames
• Eyeglass lenses
• Contact lenses
Some plans may also cover other services, including laser vision care programs or even prescription protective eyewear that is compliant with American National Standards Institute (ANSI) and Occupational Health and Safety Administration (OSHA) safety guidelines.
Vision plans typically do not cover replacements for frames, eyeglass lenses or contact lenses, medical or surgical treatment, vision training or experimental vision services or treatments.
How Does Vision Insurance Work?
For vision coverage, you pay a premium or membership fee. Then, when you visit your eye doctor or purchase corrective lenses, you pay a reduced amount for services. Eye exams will typically be covered at 100% or have a small copay. Corrective lenses are usually covered with a copay or a maximum allotted amount per year. If you are given an allotted amount, you would only have to pay if the eyewear exceeds that amount. For example, if your insurance covers eyeglass frames up to $120 and the frames cost $160, you would only have to pay the additional $40. Other services, such as eye surgery or treatment for eye diseases, are usually covered at a reduced rate.
Most plans will place limits on their coverage for eyewear. For example, a plan might cover a new set of eyeglass lenses once a year, eyeglass frames once every two years and contact lenses once a year. Many plans will further limit coverage to either eyeglasses or contact lenses during a plan year. Plans vary, so make sure you read your benefit information carefully.
How Has Health Care Reform Affected Vision Insurance?
The Affordable Care Act (ACA) does affect some vision benefit plans. If your vision coverage falls under the new ACA rules, then the vision plan will have to cover adult children up to age 26, and lifetime and annual limits on coverage will be eliminated. If the vision plan is of limited scope, then it is considered an excepted benefit and does not have to follow the new rules. Limited-scope plans include vision benefits provided under a policy separate from regular medical benefits, or vision benefits that are not an “integral part” of the group health plan.
In addition, under the ACA, pediatric vision care is considered an essential health benefit. This means that vision coverage must be available for children under the age of 19. The ACA does not consider vision care an essential health benefit for adults, so vision care is not mandatory for individuals 19 years and older. Unlike medical insurance, there will be no penalty for not purchasing vision insurance. For further information on the ACA and vision insurance, visit www.dol.gov/ebsa/faqs/faq-aca2.html.
Short-term Disability Insurance
When severe illness or injury strikes, the next few weeks and months can seem scary and uncertain, and you may worry about how you will pay your bills and afford your next rent or mortgage payment. Short-term disability insurance can ease your worries and help you with expenses while you’re away from work.
What Is Short-term Disability Insurance?
Short-term disability insurance may be offered by your employer as a voluntary benefit to give you financial security in the event that an illness or injury prevents you from working. Most disability insurance plans define a disability as the inability or reduction in ability to perform your job duties; the definition of disability will be specified by your policy. The purpose of short-term disability insurance is to protect your income during short periods of disability.
What Does Short-term Disability Insurance Provide?
If you are disabled, short-term disability will provide you with weekly or monthly payments of either a fixed amount or a set percentage of your regular income. Short-term disability insurance provides income replacement when you are disabled for a limited time.
How Does Short-term Disability Insurance Work?
When you purchase short-term disability insurance, your monthly premium will likely be paid through an automatic monthly payroll deduction. Depending on the insurance company, you may be able to choose the length of your waiting period, the length of your benefit period and the percentage of your regular income that will be paid in your benefits. All of these decisions will affect the cost of your monthly premium.
After you become disabled and unable to work, your plan will have a specified waiting period. Usually, short-term disability coverage begins within one to 14 days of the event causing your disability. Once you have reached the end of your waiting period, your short-term disability insurance will start paying benefits for a pre-determined length of time. Most short-term disability plans will provide benefits for three months, six months or one year. If you are still not able to return to work and you have long-term disability insurance, this is when the long-term coverage typically takes effect.
Disability insurance is coverage that provides you with a reliable source of income even when you’re not working due to injury or illness. Short-term disability insurance can help you pay your bills while you recover and get back to work.
Long-term Disability Insurance
After severe illness or injury strikes, the next few months can seem scary and uncertain, and if your ability to work is affected for an extended length of time, you will likely worry about how you will pay your bills and afford basic purchases after your short-term disability insurance runs out. Long-term disability insurance can ease your worries and enable you to keep up with your expenses.
What Is Long-term Disability Insurance?
Long-term disability insurance may be offered by your employer as a voluntary benefit to give you financial security in the event that an illness or injury prevents you from being able to work. Most disability insurance plans define a disability as the inability or reduction in ability to perform your job duties; the definition of disability will be specified by your policy. The purpose of long-term disability insurance is to protect your income if you become disabled for a prolonged period prior to your retirement.
What Does Long-term Disability Insurance Provide?
If you are disabled, long-term disability insurance will pay out a set amount or a percentage of your regular income in monthly intervals. Long-term disability provides you income protection for extended periods of time.
How Does Long-term Disability Insurance Work?
When you purchase long-term disability insurance, your monthly premium will likely be paid through an automatic payroll deduction. Depending on the insurance company, you may be able to choose the length of your waiting period, the length of your benefit period and the percentage of your regular income that will be paid in your benefits. All of these decisions will affect the cost of your monthly premium.
After you become disabled and unable to work, your plan will have a specified waiting period. This waiting period may coincide with the length of a short-term disability insurance plan and is often three to six months long. Once you have reached the end of your waiting period, the long-term disability insurance will start paying, typically in monthly allotments.
The number of payments from long-term disability plans varies. Some plans are limited to a specified time period, often between two and 10 years. Other plans may deliver benefit payments until you reach the age of 65, even if you were disabled at a young age.
Long-term Care Insurance
Of the many financial goals people make, many would list “not burdening my family” as one of their top goals. Long-term care for an elderly family member can be a huge financial burden, and you probably don’t want to be the one placing that pressure on your family.
What Is Long-term Care Insurance?
Long-term care insurance is offered by some employers as a voluntary benefit to help with long-term care expenses not covered by a regular medical policy. Long-term care refers to services you need when you are not able to perform everyday activities due to aging or a chronic illness, injury or disability, and this care can last for many years. Regular health insurance plans generally cover only about 30 days of recuperative time, whereas a long-term care plan will provide benefits for a much longer period of time.
What Does Long-term Care Insurance Cover?
Long-term care policies supplement a regular medical policy and help cover a variety of care expenses that would otherwise be out-of-pocket costs. Some of the services that might be covered by long-term care insurance include the following:
• Nursing home care
• Adult day care center
• Assisted living
• Medical equipment
• Home care assistance
How Do Long-term Care Insurance Benefits Work?
Long-term care policies pay benefits directly to you or a designated recipient, such as your spouse or child. Depending on the policy, benefits will either be paid at a set daily amount or as a reimbursement for eligible services. Usually, once you are receiving care that qualifies for benefit payment, you will have to satisfy a waiting period, which could last as long as three or more months. Your premium, likely paid through payroll deductions, will depend on various factors, including your selected waiting period, desired benefit level, age and health status at the time you purchased the policy.
Critical Illness Insurance
Heart attack, stroke, cancer and other illnesses can affect not only your health but also your bank account—medical expenses reportedly lead to more than half of all bankruptcies in the United States. When faced with a severe illness and the accompanying medical costs, critical illness insurance can help.
What Is Critical Illness Insurance?
Critical illness insurance is offered as a voluntary benefit by some employers to supplement your regular medical coverage. This insurance is designed to cover out-of-pocket expenses not covered by your health insurance, such as your deductible and copays, as well as many out-of-network charges. Illness can often lead to extended time away from work, and critical illness benefits can offset some of those lost wages and help you pay routine living expenses such as child care, transportation and rent or mortgage payments. If you don’t want to drain your savings because of medical bills and time away from work, critical illness insurance can protect you from financial loss.
What Does Critical Illness Insurance Cover?
Critical illness insurance provides coverage for acute illnesses that can be financially catastrophic. Plans specify the conditions that will be covered. Although some plans only include a few of the most common critical illnesses, other plans provide benefits for as many as 20 or more. Some of the illnesses that may be covered include the following:
• Heart attack and stroke
• Kidney failure
• Major organ transplant
• Blindness and deafness
• Multiple sclerosis
Many insurance plans will have a specific definition for each illness, so read your benefits carefully in order to understand what will be covered if you are diagnosed with a serious illness.
How Does Critical Illness Insurance Work?
Because this insurance is a voluntary benefit offered by your employer, you will likely receive a group discount, and your premium may be paid through an automatic payroll deduction. After submitting a claim, the insurance company will determine whether your illness is a qualifying event and will usually enforce a survival period, which is a predetermined number of days you must live past the diagnosis in order to receive your benefit payment.
The insurance company will typically issue a lump-sum payment directly to you regardless of any medical or disability insurance you might have. Plans are designed to have a specified benefit payout, usually for an amount between $10,000 and $50,000. With some insurance plans, you will receive the full amount for any of the covered conditions; other plans may feature several categories of illnesses, with some illnesses allotted the full benefit amount and others only given 25 or 50% of the benefit amount. Also, age may affect your coverage, resulting in reduced benefits as you get older.
No one wants to deal with a serious or life-threatening illness, but critical illness insurance can help reduce your financial worries and give you peace of mind.
Cancer is scary. You might know someone who has had cancer, and you understand the worry that goes along with this disease. If you are diagnosed with cancer, the last thing you want to do is add financial problems to your concerns. Cancer insurance is designed to relieve your financial burden if you get cancer so you can focus on recovering your health.
What Is Cancer Insurance?
Your employer may offer cancer insurance as a voluntary benefit to help protect you financially in the case of a cancer diagnosis. Cancer insurance can supplement your regular medical and disability insurance as you incur various medical and related expenses during cancer treatment.
What Do Cancer Insurance Benefits Provide?
Cancer insurance benefits may be used to cover various expenses associated with cancer and may help pay for the following:
• Out-of-pocket medical expenses
• Out-of-network services
• Experimental cancer treatment
• Travel and lodging costs
• Home health care
• Child care and household help
• Routine living expenses, such as rent or mortgage payments, utility bills and groceries
How Does Cancer Insurance Work?
When you purchase a cancer insurance policy, you can typically choose a benefit amount, often between $10,000 and $50,000, and your premiums will be based on the chosen benefit amount. You can pay your monthly premium through automatic payroll deductions. Cancer insurance will typically only pay benefits for the first occurrence of a cancer and will not be of any use if you have already been diagnosed.
When you are diagnosed with cancer, most plans will send a lump-sum payment directly to you or your designated recipient. You then choose how to spend the benefit money—whether it’s for out-of-pocket medical expenses or replacing lost income as you buy groceries and pay the utility bill. Make sure you read your policy benefits carefully for any listed exclusions; for example, many plans do not cover most skin cancers. Dealing with cancer can be challenging, but cancer insurance can help ease your financial worries.
If you have people who depend on you for financial support, you might have thought about what happens when you’re not there to support them anymore. Life insurance can give you security as you think about the future of your family.
What Is Life Insurance?
Life insurance can be offered as a voluntary benefit by your employer. Life insurance protects your family financially after your death. Many people who are the primary or sole providers for their families will purchase life insurance to take care of their families in case they die and are no longer there to support their families.
When you purchase life insurance, you can choose between term and permanent life insurance. Term life insurance is the simplest and generally the cheapest form. You buy coverage for a specific period of time, such as 10 years. The policy can usually be renewed at the end of that time period, but premiums can increase based on your current age and health status. If you reach the end of the term and you’re still alive, you receive no benefits and no cash value.
The other main type of life insurance is permanent, and there are several kinds of permanent life insurance. Each of these kinds of life insurance includes a savings element that builds cash value in addition to the death benefit. Once that cash value accumulates, it is generally accessible to the policyholder tax-free. The most common types of permanent life insurance are whole, universal and variable life.
• Whole life. You purchase this policy to cover you indefinitely. The premiums remain the same, and you keep paying for the rest of your life. If you decide to cash in, you will receive the cash value in a lump-sum payment. These are more expensive than term policies at first, but they can even out eventually because the premium does not increase.
• Universal life. This policy is similar to whole life, but has the potential for higher earnings on the savings component. Universal life insurance is flexible because you can alter your premiums and death benefits as desired based on your current budget. Part of your premiums will be invested, and this fund will pay the cost of the set death benefit. However, in case the investments do poorly, there is usually a guaranteed minimum return on the cash value.
• Variable life. A variable life policy generally has fixed premiums, and you have control over the investment decisions for the cash value portion. The death benefit is not set, but rather depends on how the investment fund performs; sometimes the insurance company will provide a guaranteed minimum death benefit upon your death if the fund does too badly.
What Does Life Insurance Provide?
Life insurance provides cash benefits to your family or designated recipients after your death. Depending on which type of life insurance you purchase, it might also give you the option of cashing in for a lump-sum payout.
How Does Life Insurance Work?
When choosing the type of life insurance to buy and the death benefit amount, many people choose a benefit amount based on an income replacement calculation, often between five and 10 times the amount of your current income. Premiums are typically paid via automatic payroll deduction. Benefits are delivered to your designated beneficiary upon your death.
Accidents happen. Whether you suffer a concussion falling off a ladder, break your leg slipping on ice or dislocate your shoulder moving the couch, injuries can lead to costly medical care, loss of work time and various other related expenses. If you don’t want to be caught financially unprepared to handle an accident, consider accident insurance.
What Is Accident Insurance?
Accident insurance may be offered by your employer as a voluntary benefit. This insurance can help protect you financially in case of an accidental injury. Regular medical insurance won’t cover all the expenses that result from injury—at the very least, you will likely owe a deductible and copays—and accident insurance can help fill in those coverage gaps as you pay out-of-pocket medical bills.
You can use your accident coverage to pay for anything you need after a qualifying accident. Just remember that accident insurance does not replace your medical insurance; instead, it offers additional coverage and financial assistance.
What Does Accident Insurance Cover?
Accident insurance will deliver a payment to you for various qualifying incidents. These occurrences may include the following:
• Injuries such as fractures, dislocations, burns, concussions, cuts and lacerations, eye injuries, coma, torn knee cartilage, broken tooth, ruptured disc and paralysis
• Medical services and treatments such as ambulance (ground and air), emergency care, non-emergency care, hospital (admission, confinement and inpatient rehab), intensive care unit confinement, physician follow-up, therapy services, medical testing (X-rays, MRIs and CT scans), medical appliances, inpatient and outpatient surgery, and blood and blood plasma
• Family lodging and travel needs related to an accident and follow-up care
Some plans may also include accidental death and dismemberment (AD&D), which is sometimes available as an add-on to the accident insurance policy, although it is more commonly a separate plan altogether.
Accident insurance will likely not cover an accident or injury under the following circumstances:
• Suicide attempt or intentionally self-inflicted wound
• Acts of war, declared or undeclared, or active military duty
• Natural disaster
• Non-prescription use of controlled substances or consumption of alcohol
• Participation in illegal activity
• Participation in a professional or semi-professional organized sport, or driving in a race, stunt show or speed test
How Does Accident Insurance Work?
As a voluntary benefit through your employer, accident insurance will likely offer you a reduced premium rate that can be automatically paid through payroll deductions. Insurance benefits are paid regardless of other insurance coverage, such as a health insurance plan that might already pay a portion of your medical expenses.
After you submit a claim and any required verification for an accident, the insurance payment will be sent directly to you. Generally, the insurance will pay a one-time lump sum. Some plans pay out according to your expenses up to a maximum amount specified in the policy, while others simply pay out a predetermined amount based on the injury or accident type.
Accident insurance is used in addition to your regular health insurance, and when you receive your insurance payment, you can use the benefit money for any of your expenses—medical deductible and copays, rent or mortgage payment, groceries, transportation, child care or any other needs. The use of the money paid out following a claim is entirely up to you as you recover from your accident.
You will have to read your benefits carefully for any stipulations regarding waiting periods or provider networks, but typically you can receive benefits after visiting any doctor you choose as long as it is a qualifying accident and injury. Also, check with your plan to see if it has portability—generally, you should be able to keep your accident insurance even if you switch employers.
Although no one likes to think about accidents and injuries, consider preparing for the unexpected with accident insurance.
Non-traditional Voluntary Benefits
Non-traditional voluntary benefits include offerings that are newer products or more specialized programs than the traditional voluntary benefits insurance products. Some of the non-traditional benefits are insurance plans, but others are types of reimbursement or discount programs that contribute to your quality of life or your ability to get the most out of your budget.
Non-traditional benefits include group prepaid legal plans, pet insurance, financial planning assistance, employee purchase programs, employee discount programs, home and auto insurance, educational assistance services, identity theft insurance and adoption assistance.
You’re remodeling your kitchen, but your contractor didn’t finish the job and isn’t responding to your phone calls. You need legal assistance to resolve the problem. However, after spending hours searching for an attorney, you realize that legal help will come at the price of at least $100 to $300 an hour—and you’ve already lost money on the incomplete kitchen project. This is a situation where legal plan benefits could come to your rescue.
What Are Legal Plan Benefits?
Group legal plans are voluntary benefits that your employer may offer in order to give you access to legal services that you might not otherwise be able to afford. A group legal plan is a type of insurance for when you need an attorney’s services. You pay into the program through payroll deductions, and, when you need legal help, you have prepaid access to an attorney who can assist you—without breaking the bank.
What Do Legal Plan Benefits Provide?
Legal plan benefits can help you in a variety of situations. The more common service categories used by employees with group legal plans include the following:
• Telephone advice and office consultations with an attorney
• Estate planning documents, including wills, trusts, living wills and powers of attorney
• Real estate matters, including the purchase, sale and refinancing of homes
• Financial matters such as debt collection defense
• Hiring or dealing with contractors
• Leasing or purchasing an automobile
• Traffic offenses
• Criminal matters
For any legal plan, certain specified legal services will be covered, and non-covered services will often be provided at a reduced rate from the attorney’s normal charges.
How Do Legal Plans Work?
If you elect to use this voluntary benefit, a monthly fee will be paid through payroll deduction. Typically, a network of attorneys can be accessed through the plan. When you find yourself in a situation where you need legal assistance, you can call your legal plan provider who will then connect you with an attorney in your area. Prepaid legal services through a group legal plan give you the assurance that when you need legal assistance, you have access to an attorney’s services without having to deplete your savings.
According to a survey by the American Veterinary Medical Foundation, almost two-thirds of pet owners consider their animals to be a member of the family. If you consider your pet to be an important part of your home and family, you’re likely willing to spend a great deal to ensure your pet’s health and well-being.
In addition to the costs of food, grooming, training, toys, vaccinations and other regular expenses, veterinary care for sudden illness or injury can impact your budget. Pet insurance is a product offered by some employers as a voluntary benefit to protect you from high, unexpected veterinary bills.
What Is Pet Insurance?
Pet insurance provides coverage for pet illnesses and accidents. These plans are somewhat similar to your own health insurance plan, but with more focus on unforeseen medical incidents rather than routine preventive visits. Most pet plans cover dogs and cats, though some may cover other animals, such as chameleons, chinchillas, geckos, gerbils, goats, mice, lizards, hamsters, potbellied pigs, rabbits, rats, snakes and tortoises.
As veterinary technology adopts advanced diagnostic and treatment tools already used for people, such as MRIs and organ transplants, the possibility of saving your pet from life-threatening injury and disease has increased. However, the cost of veterinary care has risen as well. Having pet insurance can provide you with the ability to say “yes” to a costly but life-saving operation for your pet.
What Does Pet Insurance Cover?
Plans will cover different illnesses and conditions, but most are generally focused on non-routine care and will cover a new illness, disease or injury. Listed below are a few examples of the conditions pet insurance might cover:
• Eye and ear infections
• Broken leg
• Lyme disease
Pet insurance policies will also specify expenses that they will not cover. While every plan is different, the following items are typically excluded:
• Elective procedures
• Prosthetic limbs
• Training or behavioral problems
• Pre-existing conditions
• Burial-related expenses
Some plans will cover chronic or hereditary conditions, but others will specifically exclude these even if they are diagnosed after your policy begins.
If wellness, preventive or routine care is covered, it will usually be offered as a separate package that can be added on for an additional premium, although the extra amount might almost double the regular premium in some cases.
How Does Pet Insurance Work?
Like your own health insurance, you pay a premium for your pet’s insurance policy and then the insurance will pay the specified amount when you submit a claim. Because this is a voluntary benefit through your employer, premiums will likely be paid through a payroll deduction, and you will probably pay a reduced premium due to a group rate. You should check with your plan to see if there are any restrictions on which veterinarians you may visit.
When you submit a claim for reimbursement, the charges will typically be subject to a deductible and coinsurance or copayment. Many plans allow you to choose from several different levels of deductibles and coinsurances, which will affect the premium; for example, if you choose a higher deductible, you will pay a lower premium. Some plans may only cover amounts up to a certain maximum for each type of disease or procedure. Additionally, the plan may have an annual or lifetime benefit maximum.
Waiting periods may prohibit certain conditions from being covered for a designated length of time. For example, if your dog suffers from a chronic condition that is covered by the policy, your insurance plan may stipulate a waiting period of six months before it will pay for related care.
Although most pet owners budget for routine care, surprise accidents and illnesses can be costly. If you’re a pet owner who would spend any amount to save your animal friend, pet insurance might be a good option to protect your finances from unexpected vet bills.
Financial Planning Assistance
Many people struggle with financial planning. Surveys reveal that as many as two-thirds of employees admit that worrying about their personal financial situations negatively affects their health. Financial planning can be difficult for a number of reasons, especially when you don’t have a budget, aren’t sure if you’re on the right track for retirement savings or simply don’t know whom to trust for advice. If you worry about paying bills and saving for the future, you’re not alone.
What Are Financial Planning Assistance Benefits?
Many employers are noticing the financial troubles that plague their employees, and some companies are responding by offering their employees financial planning assistance as a voluntary benefit. The purpose of this benefit is to help you manage your money efficiently and give you peace of mind as you budget today’s spending and save for your future.
What Do Financial Planning Assistance Benefits Provide?
Financial planning assistance benefits might help you with financial issues and decisions ranging from daily budgeting to debt management to long-term investment strategies and retirement savings. Financial planning assistance can come in various formats:
• Educational materials
• Group seminar or presentation (in person or online)
• Online class
• Personalized advice through one-on-one counseling
• Financial software
• Financial calculators or budget templates
Employers may provide financial planning assistance benefits from internal human resources or finance department personnel, or they may bring in experts from a financial organization. These third-party experts may be paid consultants, affiliates of your employer or agents from a financial institution that agrees to provide counseling or seminars in exchange for the opportunity to promote their own services.
How Do Financial Planning Assistance Benefits Work?
Whether you’re offered group classes or individual advice, your employer is providing access to expert assistance for your financial planning. Choosing to use this benefit is up to you, and it is ultimately your responsibility to make educated decisions regarding your financial plans.
It’s helpful to know who is providing the financial assistance advice. If your employer brings in an outside firm that provides financial counselors for free, be aware that the counselor may also be trying to sell a financial product.
Most importantly, make sure you never rush a decision because you only have a short lunch break to chat with the financial planner. Take the information and answers you’re given and make a decision when you have the time to carefully think it through. Financial planning assistance benefits are a great tool to take advantage of, but it’s only helpful if you thoughtfully consider the advice and apply it in the best way for your personal financial situation. You also have to take action to follow the financial plan you decide on—good financial planning requires you to follow the plan you’ve created.
Employee Discount Programs
Who doesn’t like to save money? Whether you’re always on the hunt for a good deal or simply appreciate a sale when you see it, you’ll be happy to learn about employee discount programs.
What Are Employee Discount Programs?
Employee discount programs are voluntary benefits offered by an employer to help you save money. Employers contract with vendors and merchants to offer you promotions, discounts and group rates. Each discount program is unique to the employer that offers it, and, through the program, you will have access to a variety of products and services at reduced rates. These discounts might include items you usually buy, such as groceries and cellphone service, or you may be able to access discounts for more specialized purchases such as concert tickets and hotel stays. The advantage of a discount program is that it saves you money simply for being an employee of your company.
What Do Discount Programs Offer?
The types of products and services that might be offered through a discount program vary widely, often including both special and everyday items and services. Here are some of the more common products and services that you might be able to purchase for lower prices:
• Fitness center or gym membership
• Mobile phone group rates
• Lower loan or bank account fees
• Health-related services such as acupuncture or chiropractic care
• Computer hardware or software
• Child care services
• General discount programs, which may include:
o Tickets for sporting events, movies, theaters and more
o Hotel stays and transportation tickets
o Restaurants and groceries
o Travel planning assistance
o Clothes, shoes and jewelry
o Services at salons and spas
o Reduced rent for designated apartments
Some programs may also offer payroll deduction options. With this perk, you can purchase an item through the program and then pay for it with automatic deductions from your paycheck each month.
How Do Discount Programs Work?
The discount program may offer lowered rates, percentages off or special deals and promotions. Depending on the program, discounts may be available in-store, online or both. To take advantage of a discount or other offer, simply provide proof of employment (such as an identification card or pay stub) or a discount card or ID number, if given one. Then proceed with your purchase.
For most discounts, especially programs like gym membership rates, you will need to identify yourself as an employee of your company at the beginning of the transaction. Additionally, you may have to order a product, such as movie tickets, through a designated website in order to obtain the savings. Employee discount programs are a great way to save money and stretch your salary.
Employee Purchase Programs
Your washing machine is leaking and the freezer isn’t freezing your food anymore. Whether you need to replace a broken appliance or want to book a family vacation, you might be looking for a way to make a big purchase without taking out a loan or amassing credit card debt. An employee purchase program might be the perfect solution.
What Are Employee Purchase Programs?
Employee purchase programs are voluntary benefits that give you the ability to purchase items and then responsibly pay for them. The program distributes the cost of the item, plus any fees or interest, over a specified number of months of repayment, allowing you to easily budget for the purchase. The monthly payment is made via an automatic payroll deduction, so you never run the risk of forgetting to make a payment. An employee purchase program is not a layaway plan; instead, it enables you to purchase an item and use it right away, without dealing with credit card debt.
What Does an Employee Purchase Program Provide?
Employee purchase programs can offer a variety of products. Categories of items may include the following:
• Household appliances, furniture and mattresses
• Computers, televisions and video games
• Fitness and recreational equipment
• Home and outdoor supplies
• Jewelry, watches, luggage, strollers and musical instruments
• Travel and vacation packages
How Does an Employee Purchase Program Work?
Most employee purchase programs will require you to meet a few qualifications, such as being a full-time employee, a minimum age (usually 18 years old) and employed by your company for a minimum number of months. Additionally, the program will typically establish a maximum purchase amount based on your annual income in order to prevent you from borrowing more than you can reasonably repay.
When you wish to make a purchase through the program, you sign in to its website and browse the catalog of available items. You then select what you want and place an order. You will likely have a small amount of paperwork to fill out, and monthly payments will be paid through payroll deductions.
Home and Auto Insurance
You and your family probably spend a considerable amount of time in your home and backyard, as well as time in your car driving to school or work. Your house and automobile are two of the most valuable purchases you’ve made, and it makes sense that you want to protect them with insurance coverage.
What Is Home and Auto Insurance?
Home and auto insurance protects you from large expenses resulting from loss, damage and injury associated with your home, property and automobile. The two types of insurance—homeowners and automobile—are separate products but are frequently bundled, or purchased together, which usually results in a discounted rate. Most states mandate a minimum amount of auto insurance, and many mortgage lenders require homeowners insurance if you want to borrow from them.
Despite the necessity of having it, insurance can seem complicated and expensive. Some employers offer home and auto insurance as a voluntary benefit, which can help simplify getting and paying for insurance. You may receive discounted rates for purchasing insurance through your employer, as well as the convenience of automatic payroll deductions.
What Does Home and Auto Insurance Cover?
All insurance plans will have specific guidelines and exclusions regarding coverage, so make sure you understand the benefits before making a decision. Coverage availability and requirements may also vary depending on the state you live in.
You will have to choose which types of coverage you want, as well as how much coverage for each category. Listed below are summaries of the commonly offered areas of coverage for home and auto insurance plans.
Homeowners insurance may offer the following:
• Dwelling coverage – covers repairing or rebuilding after damage to the structure, including built-in appliances, plumbing and wall-to-wall carpeting
• Other structures coverage – covers other buildings on your property, such as a garage, shed or gazebo
• Personal liability – covers injury or damage to others and their property if you are held responsible; for example, medical bills for someone injured on your property
• Contents or personal property coverage – covers clothes, furniture, electronics and other items in your home if damaged or lost due to a covered cause
• Loss of use coverage – covers living expenses in the event of a covered loss (such as temporary housing after a house fire)
Homeowners plans typically list covered damages and losses in either an “open perils” or a “named perils” policy. An open perils policy will cover any damages not specifically excluded, whereas a named perils policy will list the damages and losses that are eligible for coverage.
You can often add extra coverage to the base plan as long as you are willing to pay a higher premium. For example, many plans will include minimal coverage for items such as jewelry and furs, but you may be able to purchase extra coverage. Likewise, damages caused by flood, earthquake and sewer water backup are typically not included in standard coverage but are sometimes offered as add-ons.
Some home policies might automatically include minimal identity theft coverage with your base plan, or you might be able to add this coverage for a higher premium.
Auto insurance may offer the following:
• Bodily injury and property damage liability coverage – covers expenses when you are legally responsible for an accident or other incident, including damages and medical bills as well as defense and court costs in case of a lawsuit
• Uninsured and underinsured motorists coverage – covers damage or injury caused by another motorist who is not properly insured
• Medical payments and personal injury protection (PIP) coverage – covers medical expenses for you and possibly passengers following a car accident
• Comprehensive coverage – covers damage from events such as fire, theft and vandalism
• Collision coverage – covers damage after a collision with other vehicles or objects
• Replacement cost or gap coverage – covers the replacement value of a severely damaged car rather than the lesser, depreciated value
Other items such as towing or emergency roadside services coverage can also be added to your policy depending on the insurance company offerings.
How Does Home and Auto Insurance Work?
When offered as a voluntary benefit through your employer, home and auto insurance premiums can typically be paid through a payroll deduction. The two products will often be bundled together, and with a group rate, you will likely pay a discounted premium that is better than if you had purchased insurance on your own.
In addition, many insurance plans offer discounted rates for meeting certain safety and precautionary measures. For auto insurance, this may include having airbags, anti-lock brakes or anti-theft devices, as well as earning good grades (for students) or meeting safe driver qualifications. For homeowners insurance, discounts may be awarded for installing protective devices such as smoke detectors and alarms, interior sprinkler systems and security systems such as deadbolts and alarms. Also, some home insurance plans may offer a discount if you recently purchased the home or have been loss-free for a specified time period.
When submitting a claim, do so as soon as possible because many policies have a time limit for claim submission. Depending on what the claim is for, make sure you keep any police reports for a theft or car accident, retain receipts for everything and take photographs of damages.
Generally, your plan will have a deductible to meet, which is the amount you are responsible for before the insurance company will pay. For example, if your car suffers covered damages that require $1,200 in repairs, and your auto policy has a deductible of $500, you will be reimbursed for the $700 that it cost after you met your deductible. Additionally, your insurance plan may have a “split limit,” meaning different parts of your coverage are subject to separate deductibles and maximums.
If your employer offers home and auto insurance as a voluntary benefit, check out how you can save on premiums and enjoy greater simplicity with payroll deductions.
Even after entering the workforce, many people choose to continue their formal education by taking classes or enrolling in degree programs. Learning new skills or obtaining a higher degree can enhance your job productivity and open new opportunities for career advancement. Educational assistance is a voluntary benefit that some employers offer to help you reach your educational goals.
What Are Educational Assistance Benefits?
The purpose of educational assistance is to help you overcome the obstacles of time and money if you wish to further your formal education. These benefits can range from partial reimbursement for specific job-related courses to full reimbursement for an entire degree program, along with flexible work scheduling to make it easier to accomplish.
What Do Educational Assistance Benefits Provide?
Educational assistance programs typically cover some or all of the expenses for course tuition, required books and eligible fees. These are some expenses that educational assistance programs may cover:
• Tuition for job-related classes
• Tuition and fees for degree program courses
• Tuition for classes that are not specifically relevant to your job or career path
• Online or distance learning courses
• Required textbooks
• Required supplies and equipment
• Various fees and expenses that are added to the tuition bill (for example, an entrance exam fee)
• Required licensing classes (guidelines may be included in the educational assistance program or in a separate policy)
Expenses that are generally not covered include the following:
• Tools and supplies that you keep after the class concludes
• Transportation and parking costs
In addition to financial assistance, educational assistance benefits might also feature flexible work schedules or telecommuting to accommodate class and exam schedules.
How Does Educational Assistance Work?
With most educational assistance programs, your eligibility for benefits depends on your employment status. You typically have to be a regular, full-time employee in order to qualify, although some companies may include part-time workers as well. Also, you will likely have to be employed with the company for a certain length of time, such as six months or a year, before becoming eligible for educational assistance benefits.
Employers have several options regarding how to deliver the financial benefits for educational assistance. Some companies may pay the school directly at the beginning of the course. Others may reimburse you after receiving proof of satisfactory completion.
Reimbursement levels also vary according to company policy. Educational assistance benefits may be limited to a certain number of classes per semester, dollar amount per year or other factors such as relevancy to your current job or career path. Whether or not the courses are part of a degree program may also affect eligibility.
Additionally, some employers may reimburse you according to the grade you received in the class. For example, you may be reimbursed 100% for an A grade, 75% for a B, 50% for a C and no reimbursement for a D or F. Likewise, a pass/fail course might be reimbursed 100% for a passing mark and nothing for a failed course.
In addition, if you take advantage of educational assistance benefits, your company may require that you remain at your job for a specified minimum amount of time, such as 18 months. Employers typically provide this voluntary benefit because they consider it an investment in you as you contribute to their success. If you leave the company within that time frame, you may be responsible for paying back part of the educational cost that they covered.
Educational assistance benefits may also have tax implications. According to the Internal Revenue Service (IRS), up to $5,250 of qualified educational assistance from your employer is tax-exempt each year. You can visit www.irs.gov/publications/p970/ch11.html for more information.
Identity Theft Insurance
According to the Federal Trade Commission, as many as 13 million Americans become victims of identity theft each year. Identity theft occurs when someone obtains personally identifying information, such as your name, credit card number, birth date, Social Security number, home address and bank account numbers, and then illegitimately uses this information. This unauthorized use of your personal information can result in great financial loss as the thief amasses credit card debt and tarnishes your credit rating.
Repairing the damage from identity theft can be a daunting—and financially taxing—task. After losing money to identity theft, you don’t want to spend more on the various fees and charges that accompany re-establishing your name and credit. Some employers offer identity theft insurance as a voluntary benefit that can help protect you in case you become a victim of identity theft.
What Is Identity Theft Insurance?
Identity theft insurance is designed to relieve you of the financial burden of repairing damages after your identity has been stolen. This type of insurance does not reimburse loss from theft such as stolen credit card numbers or forged bank checks, but rather prevents further loss once you have already become a victim of identity theft. Also, aside from some plans which may provide free credit monitoring, identity theft insurance does not work to prevent identity theft. Instead, identity theft coverage helps with expenses as you navigate the identity recovery process, which is useful whether or not you actually lost money to an identity thief.
What Does Identity Theft Insurance Cover?
Identity theft insurance assists you with the potentially costly and complicated process of recovering from identity theft, and most plans will cover basic expenses incurred during your identity recovery. Eligible expenses may include the following:
• Postage and certified mailing costs
• Phone bills
• Photocopying charges
• Notary and filing fees
• Legal fees and attorney fees
• Fees for reapplying for loans, grants or other credit lines that were denied due to identity theft
• Lost wages due to time away from work to meet with police, confer with attorneys or engage in other recovery-related activities
• Cost of obtaining credit bureau reports
In addition, the insurance may cover fees for a fraud specialist who can support and guide you through the recovery process, and some plans may provide their own experts to assist you.
How Does Identity Theft Insurance Work?
As a voluntary benefit offered by your employer, your premium for identity theft insurance will likely be paid through a payroll deferral. Because the insurance is offered through your employer, you are likely receiving a group discount on the premium.
After making a claim, the insurance company will reimburse you for expenses that are specified in your plan. For some plans, you may have a deductible, which is the amount you would have to pay before the insurance would start paying anything.
In addition, the coverage amount is usually limited to between $10,000 and $1 million. Your insurance may have a limit for each occurrence, a limit per policy period, or both.
Having identity theft insurance can contribute to your peace of mind and give you necessary assistance should you ever become a victim of identity theft.
On average, approximately 120,000 children are adopted every year in the United States. The decision to adopt a child is dependent on many factors, and financial obligations often become a significant one. Adopting a child can cost anywhere between almost nothing and more than $40,000. While no one can truly put a price on having a child, the cost of adoption can be difficult to overcome. Some employers offer adoption assistance as a voluntary benefit to help you afford the adoption process.
What Is Adoption Assistance?
Adoption assistance benefits help you with various parts of the adoption process. Benefits might include advice and help with paperwork, time off while bringing the child home, reimbursement for adoption-related costs or other types of assistance. Employers that offer adoption assistance benefits understand the importance of supporting their employees who choose to adopt. Employers typically design their adoption assistance benefits similarly to the benefits they provide for new biological parents, particularly regarding parental leave policies.
What Do Adoption Assistance Benefits Provide?
Adoption assistance benefits come in many forms, but the benefits can generally be categorized into information resources, financial assistance and parental leave. If your employer offers adoption assistance, it may be in one or more of these categories.
Information resources. The adoption process can be fraught with complicated rules, processes and paperwork. Information resources from your employer can help you navigate the adoption process. This assistance may include access to an adoption specialist who can answer questions or provide special support for more difficult adoption situations. Other resources may include recommendations for licensed adoption agencies, support groups and organizations.
Financial assistance. Another benefit is financial assistance for many adoption-related expenses. Fees and expenses associated with adoption may include public or private agency fees, court costs, legal fees, foreign adoption fees, home study charges, medical costs, temporary foster care charges, transportation and traveling costs, pregnancy costs for a birth mother and counseling fees associated with child placement and transition. Employers that offer this financial benefit can set up the program in various ways.
Financial assistance for adoption could be provided in the form of a single payment to assist with the adoption—usually an amount between $1,000 and $15,000. Assistance might also be provided through reimbursement for adoption-related fees and expenses. For example, an adoption assistance reimbursement program might cover 80 or 100% of specified expenses (such as court fees, travel expenses or child medical care) up to a predetermined maximum amount.
In addition, an employer may provide benefits per adoption or per child adopted. Expenses may be paid up front as they are incurred or reimbursed after child placement or when adoption is finalized. Some employers provide extra financial assistance for the adoption of children with special needs.
Parental leave. Like the birth of a child, bringing home an adopted child requires time and care. Parental leave allows you the time you need to assimilate the child into your home and make sure he or she is properly cared for. According to the Family and Medical Leave Act (FMLA), companies with 50 or more employees are required to provide both mothers and fathers up to 12 weeks of unpaid leave for the birth or adoption of a child. Companies that offer adoption assistance benefits may offer additional parental leave, or they might provide paid parental leave or a combination of paid and unpaid time off.
How Does Adoption Assistance Work?
If you are planning on adopting a child and hope to benefit from your company’s adoption assistance program, make sure you understand the specific policies and tax implications before applying for adoption assistance.
Eligibility. Eligibility for adoption assistance benefits varies according to the company’s specific benefits program. Typically you must be a full-time, regular employee in order to qualify. Other qualifications for eligibility may include your length of employment.
In addition to your employment status, the type of adoption may affect your eligibility for this benefit. Some companies will not offer the reimbursement benefit for the adoption of children older than 16 or 18 years or for stepparents adopting their stepchildren.
Tax implications. Adoption assistance benefits, especially those in the financial assistance category, will likely affect your taxes. For example, company reimbursement for your adoption expenses may impact your adoption tax credits. You can visit www.irs.gov/taxtopics/tc607 for further information on adoption tax credits and how they may be affected by employer reimbursement.
Voluntary Benefits – Employee Guide