Small Business Benefits in Florida: Voluntary Coverage I Can Set Up, and the One I Cannot

Voluntary benefits sit on top of a medical plan. They don't replace one. An employee who has a health plan through you, through a spouse, or through the marketplace can add one of these, and it pays them cash when something specific happens.

The word "voluntary" is doing real work. Usually the employee chooses whether to enroll and pays the premium, through payroll deduction, so the cost to you as the employer is the administrative work of running the deduction rather than the premium itself. You can choose to contribute to it instead.

What that means in practice:

• You're not buying group coverage. You're giving your employees the chance to buy a policy of their own, one that pays a set amount for specific things rather than covering their medical bills. The formal name is a limited benefit health insurance policy. The premium comes out of their pay.
• It's separate from their medical plan. These are separate policies and pay separately.
• Enrollment is per employee. Some will take it and some won't.

These are category descriptions, not a specific policy. What any individual plan pays, what it excludes, and what waiting periods apply are in that policy's own documents, and going through those is what the call is for.

• Accident. Pays a fixed amount when someone is injured in a covered accident, based on what happened and what treatment followed.
• Critical illness. Pays a lump sum on the diagnosis of a covered condition.
• Disability. Replaces part of income while a covered illness or injury keeps someone from working.
• Hospital indemnity. Pays a fixed amount for a covered hospital stay, by the day or by the admission, regardless of what the hospital bills.
• Life. Pays a death benefit, under the policy's terms, to whoever the employee names.

The money generally goes to the employee, not to a provider, so it can be spent on a deductible, on rent, or on anything else.

This is the part worth reading twice.

None of the coverage above is major medical. It pays a set amount when a specific thing happens. It isn't the coverage that pays a hospital bill. An employee who has only this and no medical plan is, for practical purposes, uninsured for anything large.

So, plainly: this is a supplement to health insurance. It is not a substitute for major medical coverage. If an employee of yours has no medical plan at all, getting one is the thing to do first. I place individual coverage, and I'd rather do that than sell someone something that sits on top of a gap.