A voluntary plan in a long term disability (LTD) plan is a type of group LTD insurance plan that is offered by an employer, but is entirely funded by employees through payroll deductions. Voluntary plans allow employees to purchase LTD coverage at a group rate, which is typically less expensive than purchasing individual coverage on their own.
Under a voluntary plan, employees can choose to enroll in the LTD plan and pay the premiums themselves, rather than the employer paying a portion or all of the premiums as is the case in traditional employer-sponsored LTD plans. Employees can typically select the amount of coverage they want, subject to the plan’s maximum benefit limits.
While voluntary plans are typically not mandatory, employers may choose to offer this type of plan as a way to provide employees with access to affordable LTD coverage, while also minimizing the financial burden on the employer. Voluntary plans can be a good option for employees who may not be eligible for employer-paid LTD coverage, or who want to supplement their employer-sponsored coverage with additional protection.