How much group life should I offer as an employer?
Common employer-paid baseline is 1× or 2× annual salary, capped at $50K–$300K. The IRS imputes income for employer-paid life over $50K (employees pay tax on the imputed value), which is why $50K is a common cap for cost-paid employees. For higher-earning professionals (physicians, executives), basic group life of $50K is materially insufficient and supplemental voluntary life buy-ups become important. Voluntary life lets employees buy additional coverage in $25K, $50K, or 1×/2×/3× salary increments at group rates without medical underwriting up to a "guaranteed issue" limit (often $250K–$500K).
- Category
- Employee Benefits
- Audience
- Pre-purchase guidance
- Topic
- Employee Benefits
Related FAQs
Can I use a Professional Employer Organization (PEO) or association plan instead?
Sometimes. **PEOs** (TriNet, Justworks, Insperity, Sequoia, etc.) bundle health, retirement, and HR services for small businesses — they pool employees across many client businesses to access large-group pricing and richer plan options. For some NY small employers (especially those with younger/healthier workforces), PEO pricing beats community-rated small-group. But PEO arrangements have implications for tax, payroll, ERISA compliance, and unwinding can be complicated. **Association Health Plans** (AHPs) are restricted in NY — DFS regulates them tightly and they're far less common…
Read answerDo I have to offer health insurance to my employees?
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Read answerDo voluntary benefits coordinate with major medical?
No — and this is the main feature, not a bug. Voluntary benefits pay cash directly to the employee, regardless of what major medical paid. There's no coordination of benefits, no offset, no reimbursement claim. The cash can be used for anything: deductibles, copays, lost wages, transportation, childcare, household expenses. This is why voluntary benefits are so frequently paired with HDHP medical plans — they fill the high-deductible gap with non-coordinated cash.
Read answerDo voluntary benefits cost the employer anything?
Generally no — premiums are 100% employee-paid through payroll deduction. Some employers pick up a portion of premium as a richer benefit (especially for groups looking to differentiate). The administrative cost of offering voluntary benefits is real but small: enrollment communications, payroll integration, claims questions handling. Most carriers in this space provide turnkey enrollment platforms and call center support to make administration light.
Read answerDPPO vs. DHMO — what's the difference?
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