Voluntary benefits are benefits offered in addition to employees’ core compensation and benefits packages that employees can pick and choose from. Many employers consider expanding their voluntary benefits to compensate for increasing health care costs, which is a major factor in the recent trend toward providing a wider array of voluntary benefits.

Voluntary benefits can fill in gaps left by traditional medical offerings by providing additional options. Since Voluntary Benefits are almost exclusively paid for by the employee, they cost employers little to nothing to offer while making compensation packages more attractive to employees.

Many employees highly value certain benefits, such as dental, vision and disability insurance, making voluntary benefit offerings a great recruitment tool. Attractive benefits packages also help build loyalty and retention, reducing employee turnover and associated costs.

Employees benefit from reduced group rates, the convenience of payroll deductions and the ease of having multiple options all in one place. Additionally, a good voluntary benefits selection promotes goodwill because employees can choose the options that are best for them and their families.

There are a variety of voluntary benefit options; some of the common ones include:

• Life Insurance– employees can typically elect up to a certain amount without needing to go through medical underwriting
• Vision Insurance– typically includes a free annual eye exam and discounts on glasses and contacts
• Dental Insurance– generally covers preventive services and offers a discount on other treatments
• Long-term Care Insurance– covers the care people need when they have lost the ability to perform certain daily activities (care that may not be covered under Medicare or Medicaid)
• Short-term Disability– covers a percentage of lost pay due to time away from work because of a disability, generally up to three or six months
• Long-term Disability– covers care needed over a longer period of time, for injuries that could affect someone for years
• Accidental Death & Dismemberment– coverage in case an employee dies in an accident or loses a limb, vision or hearing.
• Accident Insurance– coverage designed to supplement by paying for injuries due to an accident
• Cancer Insurance– generally pays a cash benefit for cancer diagnosis and treatment, above and beyond traditional medical plans
• Critical Illness – supplemental coverage designed to cover higher out of pocket expenses not covered by the core medical plan.

Offering voluntary benefits is a great way to enhance your benefits package, differentiate, yourself from competitors, and increase employee satisfaction—all with little impact on your budget.

But while you may choose to offer numerous types of voluntary benefits that can deliver convenience and value to your employees, many employees may not understand the advantages of the voluntary benefit options.

It’s even more likely that your employees may be unclear about how voluntary benefits work. Educating your employees about the voluntary benefits you provide will yield the greatest value for you and your employees.

On July 08, 2018 the Trump administration announced it would temporarily suspend a program that helps health insurers in the individual market cover the costs of high-risk enrollees, injecting further uncertainty into the health insurance markets, one that could lead to higher premiums and fewer insurers offering coverage.

The reduction

The second round of cuts that began last summer – will shrink the federal funds devoted to the groups, known as Navigators, from $36.8 million to $10 million for the enrollment period that starts in November. Sound familiar? It should.

It’s just the latest of Trump administration efforts to minimize the Affordable Care Act (ACA), including a similar effort from last October when the administration abruptly cut off reimbursement payments to health insurers for subsidies they provide to consumers with low incomes. (That action caused North Carolinians to suffer an additional hike of 14.1 percent for N. Carolina Blue’s this year.)

The insurance industry is sounding the alarm about this decision. America’s Health Insurance Plans (AHIP) released a statement shortly after the announcement:

“We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments. This decision comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates. This decision will have serious consequences for millions of consumers. It will create more market uncertainty and increase premiums for many health plans – putting a heavier burden on small businesses and consumers, and reducing coverage options.”

Paying The Price

Suspending the Risk Adjustment program means insurers who cover sicker enrollees are missing out on billions of dollars they were promised under the law, and if the fund transfers aren’t restored, it’s likely consumers who will pay the price. (Risk adjustment programs exist in order to maintain a functioning health insurance market in which insurers cannot discriminate against people with pre-existing conditions.)

The ACA’s Risk Adjustment program requires insurance companies that enroll relatively healthier populations to transfer funds to companies who enrolled older, sicker, and higher-risk enrollees. This in effect, creates a disincentive for insurers to game the system (to the extent they can under the ACA) in an effort to avoid covering high risk patients. The Impact on market stability is potentially significant. Only time will tell. Stay tuned…

By having a strong payroll policy, you’re positioned to meet payroll deadlines, comply with federal and state payroll laws, and protect the business against lawsuits. Ultimately, your policy should be concise while giving employees a solid understanding of your payroll procedures.

Below are some best practices that should be included in your policy:

1. Workweek Records –Under the Fair Labor Standards Act (FLSA), employers must keep records that show when the workweek begins for nonexempt employees. In your payroll policy, say what time and day your workweek starts and ends, such as 12:01 a.m. Sunday through midnight Saturday.
2. Timekeeping– Employees must be paid accurately and on time. Therefore, you’ll need to be clear about procedures surrounding the use of time clocks or time sheets. Explain that submitted hours are subject to approval by the respective supervisor. Also, list the penalties for falsifying time records.
3. Breaks – Do you provide short breaks and lunch periods? If so, for how long? Under what circumstances are breaks and lunches paid or unpaid? Do employees need to clock in and out for breaks and lunches? Address all of these questions in your payroll policy, and make sure your responses adhere to federal and state requirements.
4. Overtime– Let employees know whether overtime is permitted at your workplace, how many hours constitute overtime under federal or state law and how overtime is calculated. Describe the approval process for working overtime. State the consequences of unauthorized overtime. Make everything clear cut.
5. Overcommunicate– How often do you pay employees? When does the pay period for each payroll start and end? Do you have salaried and hourly employees? If so, do you have separate paydays for each group? Do you offer direct deposit? If so, is it mandatory or voluntary? Your responses must not conflict with applicable federal and state laws.
6. Tax Deductions – State the different types of payroll taxes that are typically withheld from your employees’ wages. Say what forms employees need to complete for federal and state income tax withholding, such as Form W-4 and the state’s withholding form. Explain how wage garnishment is handled. You might say that, along with informing the employee of the garnishment, you will obey the garnishment order as required by law. State whether voluntary benefits are deducted on a pretax or after-tax basis.

7. Final Compensation Checks – When will terminated employees receive their final paycheck? And will it encompass all wages due at the time of separation? Will unused vacation or PTO be included in the final check? When employees resign, do they need to give advance notice in order to receive payout of their unused vacation or PTO? Which deductions are taken out of the final paycheck? To ensure your answers are correct, examine federal and state laws on final wages.

Your payroll policy may also cover holiday pay, salary adjustments, pay increases, salary advances, overpayments, W-2 distribution and expense reimbursement.

Tired of payroll taking up all your time? We realize that this is one area that has to have perfect acuity. But payday doesn’t have to be something to worry about.We create high-touch, concierge payroll services, provide concise reporting, online access and seamless integration (into accounting and human resource technology). If you want to streamline the process, contact CorpStrat and we’ll take care of you and your employees.

Open enrollment can be an overwhelming time for both employers and employees. Employees are given the opportunity to re-evaluate their current benefits and make changes for the coming year, while employers must choose a benefits package that balances cost and value and facilitate the enrollment process. Due to a variety of factors, benefit offerings are changing, placing new demands on employees and employers during open enrollment. To make the enrollment process as smooth as possible, it is important that employers educate and communicate with their employees effectively.

Here is a brief checklist that will help you make Open Enrollment a success:

• Make a list of anything new and exciting that will enhance your open enrollment processes.
• Plan to communicate these enhancements to employees.
• Make necessary changes to your benefits offerings before the open enrollment period to avoid rushing at the last minute.

• Consider offering new benefits, even if they are 100 percent voluntary.

• Hold meetings with employees to review coverage options and changes. Offer information regarding benefits in various formats to your employees such as one-on-one meetings, benefit fairs, mailers or intranet tools.
• Provide easy-to-understand tools. This will lessen employee confusion and the feeling of being overwhelmed while trying to make tough decisions.
• Make plan information as simple as possible, while also being interactive. Employees should be able to understand their offerings to make more knowledgeable decisions.
• Maintain all Summary Plan Descriptions on your website, rather than directing employees to the insurance carrier site for information. This provides easy access to information and makes the company appear more in control of the information.

Overall, a successful and effective open enrollment process can have a dramatic impact on the relationship between employers and their employees. By catering to their needs and wants, employers will ultimately make the experience more enjoyable and worthwhile for their workers. As a result, they will feel more secure in their benefits decisions throughout the plan year.

Need help developing a strategic benefits package that works for your budget and offers attractive options for your employees? We’re here to help, contact us at 818.377.7260 or send an email today.