As healthcare costs increase, demand for a longstanding benefit offering is on the rise: voluntary benefits. Voluntary benefits are well-established, and many businesses have offered them for decades. These coverages provide great value to employees, when and where they have need, all at no cost to the business. They are a means to offer a stronger benefits package and reap the goodwill that comes with it. They are flexible and come in many different forms, addressing various areas of employee need.
Popular Voluntary Benefits
Voluntary benefits can include many offerings, but most are a form of insurance or a group purchase/membership program. The following are popular offerings:
Life insurance
Dental insurance
Vision insurance
Disability income insurance
Accidental death and dismemberment coverage
Hospital indemnity insurance
Critical illness insurance
Long–term care insurance
Pet health insurance
Identity theft coverage
Retiree medical insurance
Auto and/or homeowners’ insurance
Gym memberships
Financial counseling
Student loan payment programs
Computer purchase programs
Prepaid legal services
Adoption assistance
Advantages
Voluntary benefits offer advantages to both employees and the business. In this manner, they are central to the overall benefits strategy of many companies.
Employees
A key feature of many voluntary benefits is portability. Many can be continued should the employee be laid off, retire, or even fired. This increases value to the employee, knowing the benefit can continue regardless of their job situation as long as they maintain the coverage. Due to group buying power, voluntary benefits often cost less than when purchased separately. And because they are voluntary, employees can purchase them à la carte so they only pay for what they need. Specific advantages include:
- Access to a broader benefits base
- Choice to purchase benefits that best suit their needs
- Lower cost (expense often deducted on a pretax basis)
- Portability
- Streamlined application and enrollment
- Convenience of payroll deduction
- More lenient underwriting, often with no medical exams
Businesses
Businesses that offer voluntary benefits see several advantages. By covering gaps in the base benefits offering, employee satisfaction is strengthened. Voluntary benefits communicate care, even to those employees who do not take advantage of them. Simply knowing that a solution is made available distinguishes the business as an empathetic employer.
Voluntary benefits strengthen emotional ties with current employees, and prospective hires have come to expect them. The employer pays none of the premiums, but they complement the overall business benefits package. They are easy to implement due to the comparative lack of legal and compliance issues and are largely self-administering, requiring little oversight or management. For more robust plans, third party administrators can manage the program for the business. Specific advantages include:
- Better control of total benefits package expense
- Cost-effective means to supplement benefit reductions
- Increased employee goodwill
- Better attract and retain employees
- Differentiation from competitors
Our View
Businesses should consider expanding their benefit offering to include voluntary benefits. If already offered, these benefits should be reviewed each year to ensure they are performing as desired and meeting employee needs. Employers should survey employees to determine satisfaction with these offerings and to determine if any additional voluntary benefits should be offered. To receive maximum benefit, they should ensure employees understand the availability of the various programs by communicating regularly regarding their benefits, but particularly leading up to open enrollment.
Questions on voluntary benefits or employee benefits insurance? Contact your Bankers Insurance agent. Not a client of ours? Let us earn your business! Each client is assigned a personal agent in our office, given their email address, and provided a phone number that rings right on their desk.
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