Ancillary benefits
Justworks currently partners with MetLife to offer a variety of ancillary benefits: short-term disability insurance, long-term disability insurance, life insurance, and accidental death and dismemberment insurance.
These are products that can either be company-paid or fully-employee-paid. In some cases, such as with life insurance, employees can combine both a company-paid plan and an employee-paid plan. In other cases, such as with short-term and long-term disability, an individual can only have either a company-paid or an employee-paid policy.
We’ll do an in-depth analysis of each benefit type below.
Short-term disability
Short-term disability insurance can help replace part of your weekly income in the event of illness or disability. Short-term disability insurance will go into effect 7 days after you’ve been away from work and can replace income for up to 180 days.
Justworks offers both company-paid policies and employee-paid policies. Employees cannot mix and match company-paid and employee-paid policies with short-term disability, and therefore have to have either one or the other.
Noncontributory short-term disability (Company-paid policies)
Noncontributory short-term disability is 100% paid for by the company and premiums vary based on the employee’s earnings. Effective November 1, 2019, Justworks will offer two noncontributory short-term disability policies:
- 60% of weekly income, up to $1,000.00 dollars per week
- 60% of weekly income, up to $1,500.00 dollars per week
Companies on Justworks can choose to offer either of the two policies, but not both. Whichever policy is selected will be automatically offered to all benefits-eligible employees.
In all noncontributory policies, the employee does not pay any tax on the monthly premium. If the employee goes on disability, their disability payments will be considered taxable income.
Voluntary short-term disability (Employee-paid policies)
Voluntary short-term disability is 100% paid for by the employee themselves and premiums vary based on the employee’s earnings. Justworks currently offer one voluntary short-term disability policy:
- 60% of weekly income, up to $1,000.00 dollars per week.
Employees will be automatically eligible to sign up for this policy if their company does not offer noncontributory short-term disability insurance. Employees are not eligible to sign up for this coverage if they have noncontributory coverage through their company plan. Employees are not eligible to sign up for this coverage if are not benefits eligible.
All voluntary policies are paid for with post-tax income. If the employee goes on disability, their disability payments will be not be considered taxable income.
Long-term disability
Long-term disability insurance can help replace part of your income in the event of illness or disability. Long-term disability insurance will go into effect after you’ve been away from work for 180 days.
Justworks offers both company-paid policies and employee-paid policies. Employees cannot mix and match company-paid and employee-paid policies with long-term disability, and therefore have to have either one or the other.
Noncontributory long-term disability (Company-paid policies)
Noncontributory long-term disability is 100% paid for by the company and premiums vary based on the employee’s earnings. Justworks currently offers two noncontributory long-term disability policies:
- 60% of monthly income, up to $5,000.00 dollars per month.
- 60% of monthly income, up to $10,000.00 dollars per month.
Companies on Justworks can choose to offer either of the two policies, but not both. Whichever policy is selected will be automatically offered to all benefits-eligible employees.
In all noncontributory policies, the employee does not pay any tax on the monthly premium. If the employee goes on disability, their disability payments will be considered taxable income.
Voluntary long-term disability (Employee-paid policies)
Voluntary long-term disability is 100% paid for by the employee themselves and premiums vary based on the employee’s earnings. Effective November 1, 2019, Justworks will offer one voluntary long-term disability policy:
60% of monthly income, up to $5,000.00 dollars per month.
Employees will be automatically eligible to sign up for this policy if their company does not offer noncontributory long-term disability insurance. Employees are not eligible to sign up for this coverage if they have noncontributory coverage through their company plan. Employees are not eligible to sign up for this coverage if are not benefits eligible.
All voluntary policies are paid for with post-tax income. If the employee goes on disability, their disability payments will be not be considered taxable income.
Life insurance
Life insurance can help replace part of your income in the event of your passing. With life insurance, the policy-holder can designate any beneficiary they would like and the beneficiary would receive the benefit in the event of their passing.
Justworks offers both company-paid policies and employee-paid policies. Unlike with disability, employees can mix and match company-paid and employee-paid policies.
Basic life insurance (Company-paid policies)
Basic life insurance is 100% paid for by the company and premiums vary based on the policy size. Justworks currently offers five basic life insurance policies:
- $10,000.00 basic life insurance policy
- $25,000.00 basic life insurance policy
- $50,000.00 basic life insurance policy
- 1x employee salary, up to $100,000.00, basic life insurance policy
- 2x employee salary, up to $200,000.00, basic life insurance policy
Companies on Justworks can choose to offer any of the five policies, but they cannot offer more than one policy at a time. Whichever policy is selected will be automatically offered to all benefits-eligible employees.
In all basic life insurance policies, the employee does not pay any tax on the monthly premium for policies up to $50,000.00. For policies that exceed $50,000.00 dollars in value, the monthly premium for the amount exceeding $50,000.00 dollars, is considered taxable income and will be added to the employee’s total income. Unpaid owners are only eligible for the flat policies, as they do not have a salary to base a policy value from.
This policy must be combined with basic accidental death and dismemberment insurance.
Supplemental life insurance (Employee-paid policies)
Supplemental life insurance is 100% paid for by the employee themselves and premiums vary based on the policy size the employee selects. Justworks currently offers two supplemental life insurance policies:
- $50,000 - $1,000,000 supplemental life insurance policies for employees
- $10,000 - $100,000 supplemental life insurance policies for spouses or dependents
Employees will be automatically eligible to sign up for this policy if their company is on the Justworks Plus plan. Employees are not eligible to sign up for this coverage if they are not benefits eligible.
All supplemental life insurance policies are paid for with post-tax income.
Accidental death and dismemberment insurance
Accidental death and dismemberment insurance can help replace part of your income in the event of your passing. With accidental death and dismemberment insurance, the policy-holder can designate any beneficiary they would like and the beneficiary would receive the benefit in the event of their passing.
Justworks offers only company-paid policies for accidental death and dismemberment insurance.
Basic accidental death and dismemberment insurance (Company-paid policy)
Basic accidental death and dismemberment insurance is 100% paid for by the company and premiums vary based on the policy size. Justworks currently offers five basic accidental death and dismemberment insurance policies:
- $10,000.00 accidental death and dismemberment insurance policy
- $25,000.00 accidental death and dismemberment insurance policy
- $50,000.00 accidental death and dismemberment insurance policy
- 1x employee salary, up to $100,000.00, accidental death and dismemberment insurance policy
- 2x employee salary, up to $200,000.00, accidental death and dismemberment insurance policy
Companies on Justworks can choose to offer any of the five policies, but they cannot offer more than one policy at a time. Whichever policy is selected will be automatically offered to all benefits-eligible employees.
In all basic accidental death and dismemberment insurance policies, the employee does not pay any tax on the monthly premium for policies up to $50,000.00. For policies that exceed $50,000.00 dollars in value, the monthly premium for the amount exceeding $50,000.00 dollars, is considered taxable income and will be added to the employee’s total income.
This policy must be combined with basic life insurance.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.