Voluntary Benefits for Small Employers in Southeast Tennessee: A Plain-English Guide

Voluntary benefits are insurance plans your employees can choose to buy through work, usually paid by payroll deduction. Think accident, critical illness, hospital, disability, life, dental and vision coverage. For a small business in Benton, Cleveland, Chattanooga or anywhere in Southeast Tennessee, they're one of the most affordable ways to offer a real benefits package, because employees typically pay the premiums and the business mainly handles setup and payroll.

I spent 25 years in emergency services before I started Liberty Ridge Group. I've seen what a sudden injury or a hospital stay does to a family's budget, even when they have health insurance. Voluntary benefits are built for exactly those moments. Here's how they work and how to tell if they fit your business.

What are voluntary benefits?

Voluntary benefits are plans you make available to your team, and each employee decides whether to sign up. Premiums come out of their paycheck, so nobody pays for coverage they don't want. Rates, enrollment rules and minimum participation depend on the carrier and the plan.

Common options include:

• Accident insurance: pays cash toward costs after covered injuries like a broken bone, an ER visit or physical therapy.
• Critical illness insurance: pays a lump sum after a covered diagnosis such as a heart attack, stroke or cancer.
• Hospital insurance: pays a set amount for a covered hospital admission and stay.
• Disability insurance: replaces part of a paycheck when an employee can't work because of a covered illness or injury.
• Life insurance: term or whole life coverage employees can buy for themselves and often their families.
• Dental, vision, cancer, hearing and even pet coverage.

Most of these plans pay benefits directly to the employee, who can use the money however they need: deductibles, groceries, rent or gas to get to treatment.

Why small employers in Tennessee are adding them

Health costs keep climbing. In 2025, the average annual premium for employer-sponsored family health coverage reached $26,993, and workers contributed $6,850 of it on average, according to KFF's annual Employer Health Benefits Survey. Even good health plans leave people with deductibles, copays and lost income while they recover. Voluntary benefits help cover those gaps.

They help you hire and keep good people. Small businesses compete with larger employers for the same workers. A solid benefits package tells people you take care of your team, and that matters when someone is weighing two job offers.

They cost the business very little. Because employees usually pay the premiums, your main investment is the time to set things up and run payroll deductions. Some employers choose to chip in for a plan or two, but you don't have to.

They work with or without a group health plan. KFF found that 61% of firms with 10 or more workers offer health benefits to at least some of their employees, which means many don't. If you don't offer group health insurance, your employees can still get health coverage through the ACA Marketplace, and voluntary benefits can sit right alongside it.

Pre-tax or after-tax?

Some voluntary benefits can be offered pre-tax through a Section 125 cafeteria plan. The IRS describes a cafeteria plan as a separate written plan that lets employees choose between cash and certain qualified benefits, such as health and accident coverage and group-term life insurance. Paying premiums pre-tax can lower your employees' taxable income, and it can lower the payroll taxes your business owes on those wages.

There's a tradeoff, though. Whether a plan is paid pre-tax or after-tax can change how its benefit payments are taxed, especially for disability coverage. Talk with your tax advisor before you decide, and we'll walk through how each plan can be set up.