Voluntary means the employee pays the premium, usually by payroll deduction, on cover the employer arranged. It is therefore close to free for the employer, which is exactly why it deserves more scrutiny than a benefit you pay for. You have selected a product your people will buy on the assumption that you checked it. This page covers what voluntary cover is good for, the three things to check before offering it, and the participation problem that decides whether it works at all.
What voluntary disability insurance is genuinely good for
Giving employees access to group-rated cover they could not buy as individuals at that price, and letting people who want more protection buy it without the employer funding it for everybody. Both are real benefits and both cost you administration only. Voluntary long term disability in particular is cover that most individuals would never arrange for themselves and that matters enormously in the rare case it pays.
Three things to check, because you chose it
The definition of disability, which decides whether claims are paid. The weekly or monthly maximum against your own salary distribution, which decides whether the cover is meaningful for the people most likely to buy it. And the pre-existing condition treatment, which decides whether somebody who enrols with a known issue is buying anything at all. An employer that has not read those three has arranged a purchase it cannot answer questions about.
Participation is the thing that breaks
Voluntary cover priced on assumed take-up gets re-rated when take-up is low, and low take-up is the norm because disability is the risk people most consistently under-insure. Ask the insurer what participation the quote assumes and what happens if you miss it, because the answer is sometimes a rate increase at the first renewal, which is an unpleasant surprise for the employees who bought it.
How to offer it without overselling it
Say plainly that the employer arranged access and the employee pays, name the four variables, and state the pre-existing condition treatment in the announcement rather than in the certificate. Voluntary cover communicated as an employer benefit creates an expectation the employer did not fund and cannot control, and the first declined claim is where that gets resolved badly.
Questions people ask about voluntary short term disability
Does voluntary short term disability cost the employer anything?
Almost nothing beyond administering the payroll deduction. That is the appeal, and it is also why the selection deserves scrutiny: your people will buy it on the assumption you checked the product.
Is voluntary long term disability worth offering?
It is the cover individuals least often arrange for themselves and it matters most in the rare case it pays, so access to group rates is a real benefit. Check the definition of disability, the monthly maximum against your salaries and the pre-existing condition treatment.
Why would the rate change after a year?
Because voluntary cover is priced on assumed participation and take-up is frequently lower than assumed. Ask what participation the quote assumes and what happens if you miss it, before your employees are the ones absorbing a re-rate.
How should it be announced?
As access the employer arranged and the employee pays for, with the four variables and the pre-existing condition treatment stated up front. Presenting it as an employer benefit creates an expectation you did not fund, and the first declined claim is where that unravels.