- Voluntary benefits can help a business attract and retain employees and make a more flexible suite of benefits available to workers
- Extra health coverage, ID theft prevention, and other options for additional coverage
- Benefits are typically funded through employee payroll deductions, minimizing employer costs
Summary by Dirk Langeveld
Business owners typically offer their salaried employees a range of benefits, including health care coverage, retirement plans, and paid time off. It has also become a common practice to offer voluntary benefits, which can help plug any gaps in traditional coverage.
Employees can opt to choose which voluntary benefits they would like to receive, and get coverage at a cheaper group rate rather than the higher rate they would receive if pursuing a policy independently. Voluntary benefits can give employees more flexibility in choosing a more personalized coverage plan, support their financial well-being, and help them be more satisfied and less stressed.
Voluntary benefits offer a variety of advantages to employers as well. The benefits are usually funded largely or entirely through employee payroll deductions, resulting in minimal costs to the employer. The benefits can also make a company more competitive, help attract and retain employees, and lead to better employee productivity.
Many voluntary benefit options relate to supplemental health coverage, allowing employees to opt in if they want improved financial assistance for certain contingencies. These include hospital indemnity insurance, which pays a set amount of money to cover the costs of hospitalization; accident insurance, which helps cover the costs from an accidental injury; critical illness coverage, to defray the expenses accompanying a serious or chronic illness; elder care coverage to assist with the care for a worker’s aging parents or grandparents; and short-term and long-term disability.
Companies often roll dental or vision insurance into their traditional health insurance coverage. However, these plans may be considered as voluntary benefits, or an employee could opt for a voluntary benefit package that covers a greater range of dental or vision procedures.
Some businesses help provide health coverage not just to their employees, but to their pets as well by offering a voluntary benefit of pet insurance. These policies help cover veterinary bills for major procedures which would otherwise need to be paid out of pocket.
Wellness programs are becoming increasingly popular at businesses, and companies may use voluntary benefits as a way of encouraging healthy behaviors. For example, a business might offer a credit to be used each year toward a gym membership, the purchase of fitness equipment, or other wellness expenses.
Voluntary benefits packages may offer financial resources, such as education and counseling in areas such as managing debt, improving credit, planning investments, or preparing taxes. Companies can also offer ID theft prevention, which provides a defense against financial fraud if an employee’s identity is stolen; legal insurance, which helps cover legal expenses; and life insurance, which provides a payout to the employee’s family or other beneficiaries in case of their death.
Companies may offer educational incentives as well. In addition to tuition reimbursement, some businesses offer student loan repayment programs to chip in a certain amount toward an employee’s student loans, capped at a certain amount each month for a limited period of time.
Voluntary benefits typically come with certain limitations. They may not be available to workers who are not full-time staff, and factors like age or pre-existing conditions may disqualify employees from some benefits. Since the benefits are funded through payroll deductions, business owners may not be comfortable offering them until they have a certain number of employees on staff.
