Sometimes called supplemental insurance or employee-paid benefits, voluntary benefits are offered by the employer through the workplace where employees can choose to buy them in addition to the core employee benefits they may get as part of a benefits package.
Over 78% of employers with over 100 employees provide voluntary benefit options
28% of employers with less than 100 employees offer voluntary benefits.
These comprehensive benefits are typically paid for via payroll deduction at your employees’ discretion.
Some of our voluntary employee benefit options include healthcare cafeteria plans, life insurance and policies for cancer, accident, disability, hospital confinement, critical illness, and disability coverage above and beyond what is offered by a standard benefit package.
How businesses and employees benefit from voluntary benefits
No or low cost
Employers can offer voluntary benefits at no direct cost (i.e. 100% employee-paid), leaving them with just the cost of administration.
A way to control rising health care costs
With the cost of health care on the rise, employers are starting to shy away from providing top end, ‘cover all’ primary health care benefits. Instead, they are choosing less expensive coverage and offering workers a wider range of voluntary health benefits to help fill the gaps.
Attracting and keeping top talent
Employers, especially small businesses where key members of staff can be crucial to the success of the company, are looking for effective ways to retain their staff and recruit the best talent. In fact, according to Gallup economy, employee hiring and retention remains among the top five most important challenges facing business owners. Voluntary benefit plans help smaller businesses compete with larger competitors by enabling the provision of a variety of benefits to help them stand out in the war for talent.
With a vast array of voluntary benefits on the market and a number of companies willing and eager to sell them, people are understandably worried about making the right choice. With their plans being offered at the workplace, employees know that their employer has vetted the carrier and considered the available benefits.
The wide range of options available allows employees to choose those voluntary benefits that suit their personal circumstances and lifestyle, whether they’re 20 or 55. Many voluntary benefits are also portable, meaning that if an employee should need to switch jobs, they can continue to keep the coverage as long as they pay the premiums, making a voluntary plan easy to administer and appealing.
Bridging the gap
Voluntary benefits can complement core offerings such as life insurance or disability insurance. Even if an employer provides a core life insurance offering, employees can choose to up their life insurance coverage by adding voluntary life benefits. Voluntary benefits can also provide a financial safety net to help employees with expenses that may not be covered by their core medical plan.
As well as potentially being less expensive if purchased through their employer, voluntary employee benefits can usually be deducted via payroll – meaning there’s no need to set up bank drafts or worry about missing premium payments. Plus, pre-tax dollars are often used to pay for many voluntary benefits, meaning employees save even more money. And with most voluntary benefits paid directly to the employee, they can use the money where they need it the most.
At Fringe Benefit Analysts, we can help you plan and decide which of these products are best for your employees and help put their minds at ease.