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The Complete Guide to Voluntary Benefits for Employers
Voluntary benefits are generally benefits offered to employees through their employer, though the employer bears no additional cost for offering the benefit. As a result, it’s often an obvious choice for employers to offer voluntary benefits. Employees appreciate having choices in selecting voluntary benefits they might not be able to afford or purchase on their own.
The Complete Guide to Voluntary Benefits for Employees
Here, we cover all you need to know about offering voluntary benefits to employees, including:
• What are voluntary benefits for employees
• What Types of Voluntary Benefits Exist?
• What’s the Benefit of Offering Voluntary Benefits for Employers?
• What’s the Benefit of Offering Voluntary Benefits for Your Employees?
• Tips to create a voluntary benefits package
• Why Work with an Employee Benefits Broker for Voluntary Benefits Selection?
What Are Voluntary Benefits for Employees?
Voluntary benefits, often referred to as employee-paid benefits, are benefits offered and sponsored by employers with no additional cost to the employer. Instead, when employees select such plans, they cover the full cost of the plan, which is offered through their employer. Voluntary benefits offered by employers give employees the option to purchase additional benefits in addition to the basic benefit options offered by their employer.
What Types of Voluntary Benefits Exist?
Employers can offer a wide range of voluntary benefits, including anything from personal benefits and security to healthcare and lifestyle-related insurance.
The categories that voluntary benefits fall into include:
• Health Insurance
• Lifestyle Insurance
• Personal Benefits
• Security Benefits
Health Insurance
It’s common for us to primarily consider medical insurance as the main health insurance benefit offered by employers, and though it’s one of the most sought-after benefits by candidates, it doesn’t cover all health-related costs. ER visits, annual check-ups, labs, and medications aren’t the only health-related needs we each have. Health insurance also encompasses critical illness, intensive care, long-term care, accident, vision, hospital indemnity, mental health, and dental insurance.
In terms of dental and vision voluntary benefits, according to the Society for Human Resource Management (SHRM), in 2020:
• Close to 95% of employers offered dental insurance
• Nearly 92% of employers offered vision insurance
Lifestyle Insurance
There are a variety of lifestyle-related insurances employers might offer. Short-term disability, long-term disability, financial counseling, legal support, and pet insurance are examples of lifestyle insurance.
While not all employees will gravitate toward lifestyle insurance, many will appreciate having them as an option. Also, as an individual’s needs change over time, so will their insurance considerations—someone who has never purchased short-term disability insurance might choose to do so after they have their first child to ensure they can support their family in the event of a disability occurring.
Most companies offer short-term and long-term disability insurance as either paid in full by the employee or in part by both the employer and employee. SHRM reported that in 2020:
• 62% of employers covered at least part of the cost of short-term disability insurance
• 71% of employers covered at least part of the cost of long-term disability insurance
Personal Benefits
Personal benefits are those that might support an employee’s lifestyle. They often include perks like merchandise discounts, umbrella insurance, concierge services, and discounts on auto, home, and pet insurance.
Security Benefits
Security benefits refer to benefits that provide protection and security for the employee. Identify theft protection, travel accident insurance, and life insurance are examples of security benefits employers often offer.
Though many of these benefits might not seem required for employees to have, offering them gives employees options to support them financially while also supporting their mental health and overall well-being and security.
What’s the Benefit of Offering Voluntary Benefits for Employers?
There are several benefits for employers when they offer voluntary benefits to their employees:
• Voluntary benefits cost very little to zero dollars in direct costs for employers.
• They help attract and retain top talent.
• They provide alternative options to high-cost medical benefits.
Little to Zero Dollars in Direct Costs
Offering voluntary benefits costs the employer very little to nothing as far as direct costs. They are not subsidized by the employer and are instead charged directly to the employee.
Attract and Retain Top Talent
Aside from the position and compensation, benefits are a priority for candidates when they are assessing their job offers. In some instances, candidates would accept a job with lower pay for better benefits. Offering competitive benefits is necessary for employers to attract and retain top talent.
Alternative Option to High-Cost Medical Benefits
As healthcare and medical costs continue to increase, several employers are having difficulty offering high-level, full-coverage employee benefits. As such, offering voluntary benefits allows employers to still offer a variety of healthcare benefit options to their employees without breaking the bank.
What’s the Benefit of Offering Voluntary Benefits for Your Employees?
Just as there are several benefits for employers when they offer voluntary benefits to their employees, there are several benefits employees receive, as well.
• They receive flexibility to choose the right plan for their needs.
• They can fill gaps in their insurance needs with voluntary options.
• Voluntary benefits often provide low-cost options for employees.
Flexibility to Choose the Right Plan
Many employees can benefit from the flexibility voluntary benefits provide. Voluntary benefits offer various options to meet the needs of employees regardless of current health status, age, needs, and so on.
Can Fill Gaps in Their Insurance Needs
For employees that have any gaps in their current insurance policies, voluntary benefits can be a good option to help fill those gaps. They can also provide additional financial security when it comes to healthcare expenses that are not covered by their current and primary medical plan.
Often Provides Low-Cost Options
As healthcare and medical costs rise for employers, they also increase for employees. As such, voluntary benefits can be an affordable solution for employees that might not be able to afford standard medical insurance, even if it’s offered through their employer—they can purchase voluntary healthcare benefits that won’t break the bank. Additionally, voluntary benefits are typically paid for on a pre-tax basis, allowing employees to save more money each paycheck on healthcare costs.
Who Is Eligible to Receive Voluntary Benefits?
Generally, all full-time employees are eligible to sign up for voluntary benefits with their employer, though it is up to the employer to determine eligibility based on the plan and how they want to approach each benefit offering.
However, local, state, and federal laws can dictate who is and isn’t eligible for voluntary benefits. Similarly, some state and local laws might require employers to provide certain voluntary benefits to their employees. It’s important to work with a team of experts that are familiar with your area to ensure you’re covered.
Tips to Create a Voluntary Benefits Package
Attracting candidates and retaining top employees required a competitive benefits package, which includes voluntary benefits options. Here are some tips to consider whether you’re just launching a voluntary benefits platform or are looking to add to or adjust your current offerings.
• Identify an employee benefits broker to work with.
• Determine your organization’s goals.
• Determine what your budget is.
• Survey employees for input.
• Administer a needs assessment.
• Consider state and local legal laws.
• Design a new plan or make adjustments to your current plan options.
• Develop a communications strategy.
• Reevaluate prior to launching and make necessary updates.
• Continually educate employees about all of their benefits options, including voluntary benefits—at launch, open enrollment, and throughout the plan year.
• Launch regular assessments bi-annually or quarterly.
Why Work with an Employee Benefits Broker for Voluntary Benefits Selection?
Designing and implementing a voluntary benefits program takes resources and dedication. Often, it takes a fair amount of time to research, evaluate, identify, select, and implement new employee benefits of any kind. If you’re short on resources or unsure of your options regarding voluntary benefits plan design, an employee benefits broker can be invaluable, as they can support you from start to finish when it comes to selecting your benefits and implementing the plans.
Some of the advantages of working with an employee benefits broker include:
• You save on resources—time and money—by allowing the experts to do the legwork and research for you.
• Your priorities and interests are a priority for the broker.
• The selection process is simplified.
• You can ensure you’re meeting legal requirements.
• You benefit from a competitive plan and pricing and choices.
• You have the ability to offer competitive voluntary employee benefits based on your budget and organizational needs.
• You have a partner by your side for the long haul.
KBI = Your Voluntary Benefits Experts
Offering voluntary benefit options is advantageous for both you, as the employer, and your employees, and you don’t need to go it alone. The team at KBI appreciates that you have a lot of options and considerations when it comes to offering benefits to your employees.
• What are the best options?
• What do our employees want and need?
• What can we afford?
• How do we go about implementing a new program?
• How can we make any changes as seamless as possible?
And the list goes on. As your expert employee benefits broker, we understand the ins and outs of employee benefits to guide you in making the best decisions possible for your business and the employees that support it. From our first meeting through to future implementation and changes, we’re here to ensure you’re comfortable with the choices you make when it comes to employee benefits and purchasing insurance for your company.
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