The brokers who integrate a few new concepts into their business models most effectively will win in the new voluntary benefits world.

Below are the top five reasons this model works much more effectively than traditional payroll deduction. And these distinctions are more important than ever, given the current economic environment disrupting payroll deduction.

In the past few weeks, key industries for voluntary benefits such as restaurants, hotels, public schools, and other service sectors have shuttered for an indeterminate period of time. And unfortunately, voluntary benefits are disproportionately skewed towards these hourly workers and sectors.

IRS rulings about the taxability of voluntary benefits paid for with pre-tax dollars through a Section 125 plan have always been an issue. But today, the move away from pre-taxing of VB is stronger than ever, led by the large broker houses, consultants, and the good old IRS.

On October 16th, the first domino fell. The first state government (the Commonwealth of Kentucky) communicated their decision to discontinue all payroll deductions of voluntary benefits, starting in 2019. In short, this is a watershed event in accelerating the death of traditional payroll deduction.