This Hidden Voluntary Benefit Plan Feature Can Help With Covid-19 Layoffs
Recently I've been writing about Wellness Benefits: a feature of many voluntary plans that pays a claim for annual checkups and screenings. They're a great way for a policyholder to get money back on a plan every year, while doing something good for their health at the same time. Funny thing is, most people don't know or don't remember that this benefit even exists.
As a voluntary benefits broker and enrollment firm, we place a lot of importance on educating clients about the features of their plans, especially ones with an obvious perk like an annual payout. So our group benefit broker partners, corporate clients and individual policyholders are going to hear all about Wellness Benefits. But VB carriers seem intent on cramming more and more features and value-adds into their plans, and many of them go under noticed and underutilized.
One of these features surfaced early in the coronavirus pandemic. Depending on their industry, many of our business clients had no choice but to lay off employees. The hospitality industry was especially affected: restaurants, hotels, anything related to travel, all suffered.
At the time, we spent a lot of effort sifting through the language of VB plans and calling carriers for clarifications on how their policies would protect the individual policyholder exposed to coronavirus. I wrote an article about how voluntary benefit plans work with a Covid-19 diagnosis. But we soon realized that at least one carrier had a feature that could help with the layoffs too.
Many of the Transamerica plans we had in place, especially the Universal Life with Long Term Care that has been so popular with clients, have a "waiver of premium for layoff" feature. If you have a plan with this benefit and get laid off, you don't have to pay any premium for up to 6 months, or until you're back on payroll at your job.
Employees affected by layoffs wanted to keep the policies they had purchased at work because they saw the value in them, but suddenly had no income to sustain premium payments. The layoff feature gave them a break on payments and made that a non-issue. Many were back to work by June or July and resumed having their premiums payroll deducted with no interruption of coverage.
The layoff feature...can be used for up to 6 months per year, across 3 separate layoffs
For business clients forced to lay off employees during the lockdowns in March and April, managing the process of temporarily removing those employees from carrier invoices, so that they could be brought back onto payroll billing when they had work again, was a big concern. As part of our service model we help HR and accounting with billing issues, so we were able to smooth the transitions for them and keep carrier invoices as accurate as possible.
Managing all this meant a little extra work for everyone, but it's been worth it. The layoff feature, which is poetically called the "Waiver of Monthly Deductions for Layoff or Strike Rider," can be used for up to 6 months per year, across 3 separate layoffs per year. If we get the long dark winter that many experts are predicting, this benefit could come into play again for clients who have already been helped by it once.
That's good news for our clients. And it's been a good reminder that not every feature in your voluntary plans requires you to be hurt or sick to be valuable.