Choosing Better Medical Insurance

A Quick Guide to Mandatory and Voluntary Benefits

In recent years, concerns about the availability and usability of benefits, such as health, life, and dental insurance, have become increasingly rampant. The line between mandatory and voluntary benefits has become blurred, and surprising options are now provided by some employers. Therefore, it will be helpful to understand the basis of both types of benefits.

Understanding Mandatory Benefits

Mandatory benefits refer to the different types of insurance that the federal government believes every full-time worker in the United States is entitled to. You cannot opt out of those programs, and money may be taken from each paycheck for them. Although many people are aware of them, you may not know what they are used for.

Examples Include:

  • COBRA (which would allow you to maintain various employer-sponsored benefits, at your expense, after leaving your job)

  • Unemployment insurance (provides you with an income, in some cases, if you were to lose your job)

  • Workers Compensation (pays medical bills and a percentage of your income after a work-related injury)

  • Social Security (pays for future retirement and disability payments)

Health insurance for employees, due to the recent changes associated with the Affordable Care Act, is required by most employers to provide. However, they can choose to opt out of the programs and pay a fine for not complying with the law. It is also important to remember that if you, or any person that you claim as a dependent on your federal tax forms, lacks health insurance, a fine is likely to accrue. It will be charged on your taxes each year, if necessary.

In addition, small companies that employ fewer than 50 full-time workers do not have the same requirements to provide insurance. Therefore, benefits that seem mandatory are not always so.

Learning About Voluntary Benefits

Fortunately, common voluntary benefits are easier to understand than mandatory ones. It may be surprising to learn that voluntary benefits, provided by an employer, do not only cover health-related concerns.

Common examples of voluntary benefits include these:

  • Supplemental policies for dental and vision

  • Short- and long-term disability policies

  • Improved coverage for specific major illnesses, like cancer

  • Accident

  • Pet insurance

  • Identity theft

Many of the voluntary benefits that you can access from your employer can be considered "perks." For instance, many people go their entire lives free of injury or illness, and therefore the short- and long-term disability will never be needed. However, it is a good idea to consider how devastating a few weeks or months without an income would be for your family when deciding if the cost is worth your peace of mind. Fortunately, the costs of employer-sponsored voluntary benefits are often very reasonable.

Voluntary benefits are not provided by every employer, nor are they all equally appropriate for each employee. A supplemental policy is often used to "fill in the blanks" of an existing policy and to cover copayments, unapproved charges, and deductibles. Identity theft is a major concern, with life-changing ramifications for the victims, and timely assistance from insurance in recovering from it can be crucial.

In conclusion, the role of both mandatory and voluntary benefits to the American worker is essential. Whether it is making sure that you can afford your teenager's braces or that your spouse can take time off work due to cancer treatment, it is important to have adequate coverage. By understanding how they both work, it becomes easier to choose the right plans for your family. If you have further questions about voluntary benefits, contact a company like All About Voluntary.