Reprinted with Permission from Birmingham Medical News.
Multiple benefit consultants report that participation by employees in voluntary benefits is on the rise, in part due to increases in cost sharing under group major medical plans as a result of healthcare reform. Both employees and employers see voluntary benefits as a way to fill the gap on medical costs. In addition to voluntary medical-type benefits, traditional voluntary benefits such as supplemental life insurance and long term disability continue to be popular.
What are voluntary benefits? Simply put, they are any benefit for which the employee pays 100% of the cost, but the focus of this article is on fully insured welfare benefits. Voluntary benefits are found in the smallest medical practice to the largest hospital system. If employee-pay-all insurance is offered at your workplace, read on. Because employers do not contribute to the cost of voluntary benefits, there is a misconception by most that the employer has no responsibilities beyond collecting and remitting premium payments. While this may be true in some cases, in many cases it is not.
What is involved in the ERISA checkup? First, identify all benefits for which employees pay 100% of the cost. Second, identify which are provided by insurance (both group and individual policies). Third, identify which provide welfare benefits. Fourth, for those that are insured welfare benefits, carefully review your role under the ERISA “safe harbor.” Fifth, for those that fail to meet the safe harbor, take steps to comply with ERISA. The first two steps are self-explanatory. Let’s review the others.
Download the full article, “Voluntary Benefits: Time For An ERISA Checkup” written by Debra Lee Mackey.