Voluntary Benefits
You can provide voluntary benefits to your employees at no direct cost to your business. Surprisingly, you don’t need to be a large company to offer these perks—some plans require as few as two to five employees to qualify, while others have no minimum requirement at all. Here’s what you need to know about voluntary benefits plans and how they can benefit both your employees and your business.
What are voluntary benefits?
Voluntary benefits, sometimes referred to as supplemental insurance or employee-paid benefits, are offered by employers through the workplace, allowing employees to purchase additional coverage beyond the core benefits included in their package.
These benefits provide flexibility in payment options, enabling companies to tailor offerings based on budget preferences.
Voluntary benefits can be:
- Partially funded by both the employer and employee
Voluntary benefits address four essential life needs:
- Health – Supporting employee well-being while minimizing health risks at an affordable cost.
- Wealth – Safeguarding income and assets, though a more relatable term might be "Lifestyle," as it covers financial stability and future planning.
- Security – Providing protection for survivors, vulnerable dependents, or even securing personal identities.
- Personal – Offering products tailored to individual preferences and unique needs.
Voluntary benefits not only enhance employee satisfaction but also help employers build a well-rounded benefits package to support diverse needs.
What voluntary benefits are available?
Voluntary benefits offer a wide variety of options to support employees’ health, financial security, and personal needs. From insurance plans to lifestyle perks, these benefits allow employees to customize their coverage beyond core offerings. Here’s an overview of popular voluntary benefits and how they fit under the four key categories: health, wealth, security, and personal.
Health
- Vision Insurance - Covers eye exams, glasses, and contact lenses, with potential discounts on treatments like laser eye surgery. Vision plans also help detect serious health issues such as glaucoma or diabetes.
- Dental Insurance - Includes routine care like cleanings and fillings, as well as coverage for more extensive procedures like crowns, dentures, and tooth extractions.
- Accident Insurance - Helps offset costs from accidental injuries by covering initial care, surgeries, transportation, and follow-up treatments.
- Critical Illness Insurance - Provides a lump-sum payout to employees diagnosed with covered conditions such as heart attacks or cancer, allowing them to address medical bills or other expenses.
- Hospital Indemnity Insurance - Offers financial support for out-of-pocket expenses tied to hospital stays, including outpatient surgeries and emergency room visits.
Wealth and Lifestyle
- Disability Insurance - Replaces a portion of income for employees unable to work due to illness or injury, helping them manage expenses during recovery.
- Legal Services - Grants access to discounted legal assistance for common personal matters, such as estate planning, real estate transactions, or civil disputes.
- Financial Counseling - Guides employees in managing debt, saving, and budgeting, while also providing retirement and tax planning advice.
Security
- Life Insurance - Pays a lump sum to beneficiaries in the event of an employee’s death, with options for spousal and child coverage. Policies can be adjusted to reflect life changes, such as marriage or a new home.
- Personal Travel Accident Insurance - Offers additional protection during international travel, covering medical emergencies and legal fees beyond standard accidental death policies.
- Identity Theft Protection - Monitors personal data for fraudulent use, alerts employees to potential threats, and helps repair credit history after identity theft.
Personal
Voluntary benefits that address unique lifestyle needs include:
- Retail Discounts – Savings on shopping and entertainment.
- Concierge Services – Assistance with daily tasks, such as scheduling services or managing errands.
- Pet Insurance – Coverage for veterinary care.
- Umbrella Insurance – Extra liability coverage beyond home or auto insurance.
Offering voluntary benefits is a strategic way to attract and retain talent while meeting diverse employee needs. Explore how these options can elevate your benefits package today!
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How Businesses and Employees Benefit from Voluntary Benefits
Voluntary benefits offer a win-win solution for both employers and employees. Here’s a closer look at how these programs create value on both sides.
Benefits to the Business
1. Low or No Cost
Voluntary benefits can be 100% employee-funded, leaving the employer with only administrative costs.
2. Control Over Rising Healthcare Costs
As healthcare costs climb, many employers are shifting away from expensive “cover-all” plans. Instead, they provide more affordable primary coverage while offering voluntary health benefits to fill the gaps.
3. Attracting and Retaining Top Talent
A well-rounded benefits package can help small businesses compete with larger companies. According to Gallup, employee hiring and retention rank among the top five challenges for business owners. Voluntary benefits enable businesses to stand out, offering customizable plans tailored to employees’ needs—making them harder to leave behind.
4. Support in Employee Communication
Ensuring employees understand their benefits is critical. Many carriers assist with communication, offering group meetings, one-on-one sessions, and enrollment support at no cost to the employer. These efforts ensure employees are informed and engaged.
- 77% of workers consider benefits an important factor in accepting a job (EBRI, 2015).
- 63% of employees say benefits influence where they work (Mercer, 2015).
Benefits to Employees
1. Confidence in Choices
With workplace-vetted carriers and plans, employees can feel secure knowing their benefits are reliable and independent of other insurance they may have, including government plans.
2. Flexibility
Voluntary benefits cater to diverse needs, from younger employees to those approaching retirement. Many plans are portable, allowing employees to retain coverage if they change jobs.
3. Bridging Coverage Gaps
These benefits complement core offerings by enhancing coverage, such as increasing life insurance limits or covering out-of-pocket expenses not addressed by standard medical plans.
4. Affordability
Voluntary benefits are often less expensive when purchased through an employer. Payroll deductions simplify payment, and pre-tax dollars can reduce overall costs. Since benefits are typically paid directly to employees, they can use the funds where needed most.
Busting Myths About Voluntary Benefits
Myth 1: Voluntary Benefits Are Too Expensive
Truth: Plans can be fully or partially funded by employees, allowing businesses to control costs while offering valuable options.
Myth 2: Small Businesses Don’t Qualify
Truth: Many carriers offer plans for companies with as few as two to five employees, and some have no minimum requirements.
Myth 3: Administration Is Complicated and Costly
Truth: Many carriers simplify enrollment and administration at no additional cost. Payroll deductions and tax advantages further ease the process.
Myth 4: Employees Don’t Value Voluntary Benefits
Truth: Employees often value non-medical and voluntary benefits more than employers realize, with studies showing their importance in job satisfaction and retention.
Voluntary benefits empower small businesses to enhance their offerings without significant cost, creating a competitive advantage in attracting and retaining top talent. It’s time to dispel the myths and unlock the potential of voluntary benefits for your business and employees.
1 "Small Businesses Face Operational, Regulatory Challenges." Gallup Economy, 28 Feb. 2014. Web. 4 Apr. 2014.
2 "Small Business, Big Benefits: Sharpening the competitive edge with voluntary benefits." Colonial Life & Accident Insurance Company, May 2014.
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How to Get Started with Voluntary Benefits
How Can I Offer Voluntary Benefits?
Voluntary benefits can be set up through various channels, including employee benefits brokers or by consulting directly with an insurance agent. An experienced agent can guide you in tailoring a benefits package that suits your business and workforce.
What Should I Look for in a Voluntary Benefits Provider?
Choose a provider that collaborates with you to assess your employees’ needs while staying within your budget. Look for carriers that offer additional support, such as benefits communication, enrollment assistance, and ongoing guidance. These services can help employees make informed decisions and maximize the value of their benefits.
How Can a Small Business with a Multigenerational Workforce Meet Everyone’s Needs?
Voluntary benefits shine in their flexibility, allowing employees to customize their coverage. This is especially valuable for multigenerational teams, as employees can select benefits that align with their unique life stages and priorities—all without affecting your business’s bottom line.