When Does it Make Sense to Offer Voluntary Benefits?

Jeff Griffin

Voluntary benefits have been particularly popular in the past few years as healthcare costs rise and employers continue to shift more of the cost burden onto employees. Benefits that were once completely or partially financed by the employer, such as dental and vision, are sometimes now voluntary. A growing number of employers have also replaced low deductible health plans with high deductible health plans.   

But if you’re not careful, cutting these types of benefits can present a coverage gap for your employees, many of whom are not prepared to take the hit on unexpected medical expenses. This could leave you with a financially insecure workforce — not to mention a stressed, unhealthy and ultimately unhappy one. Offering voluntary benefits can be a meaningful addition to an employee benefits package and a win for employees and businesses alike: employees feel as though they have helpful supplements to their health insurance, and employers don’t have to increase their health care budget to offer them.

Required Benefits vs. Voluntary Benefits

As we’ve discussed in the past, certain employee benefits are required by law, and employers who fail to provide them can be hit with serious — and costly — penalties. These benefits include social security and Medicare withholding, unemployment insurance and workers’ compensation benefits. Depending on where an employer is located and how many employees it has, it may also be required by law to provide disability insurance, FMLA benefits and “acceptable” health insurance per federal statute.

Voluntary benefits, on the other hand, are usually paid 100% by the policyholder, and employers are neither expected nor required to cover any portion of the premium. Furthermore, what constitutes a “voluntary benefit” is frequently up for debate — some claim it’s a benefit paid entirely by the employee, while others say it can include benefits that are partially subsidized by the employer. In reality, almost all benefits are voluntary, as employees can waive coverage as long as a benefit is not required by law.

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Topics: Employee Benefits, Employee Retention, Voluntary Benefits

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Life Insurance 101: Understanding The Different Products

David Rook

As employers search for ways to create meaningful employee benefits packages, many have turned to life insurance policies. It’s become fairly standard to offer life insurance in the amount of the employee’s annual salary at no cost to the worker. Beyond that, it’s common to offer “buy up” options for employees who might want additional coverage for themselves, or sometimes for a spouse. This could be double, triple, or even five times the amount of a person’s annual salary and in these cases, the premium for extra coverage is typically paid entirely by the employee.

Life Insurance 101: Understanding the Policies

Much like health insurance, life insurance options can be confusing. There are three different types (whole, universal, and term) and even variants among those three. How are people supposed to choose? How do they know which policy is best for their family? We put together a cheat sheet to prepare employees and HR professionals alike to make a more informed decision.

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Topics: Employee Benefits, Voluntary Benefits, Ancillary Benefits, Worksite Benefits

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If You Aren’t Offering Voluntary Benefits, You're Missing Out

David Rook

When building a comprehensive benefits package, many business owners are (understandably) grateful just to be able to offer medical coverage. But some employers also tend to leave out voluntary benefits, which can enrich the employment experience and be a helpful recruitment tool for potential employees — all at little or no cost to the employer. If voluntary benefits are outside your purview, check out this quick-reference guide to fill in the blanks.

What Are Voluntary Benefits?

While the definition of voluntary benefits has become somewhat blurred over the years (and are sometimes referred to as worksite benefits or even ancillary benefits) they are, for the most part, insurance products meant to fill in healthcare gaps where health, dental, and vision insurance might not reach, and can increase the value of your employee benefits package. Typically, voluntary benefits are paid in full by the employee and made easy through payroll deductions — most of the time at a lower rate than what can be found on the individual market and frequently taken out of wages pre-tax.

Common examples of voluntary benefits include:

  • Accident Insurance: Provides compensation to employees if they suffer major physical harm due to an accident. Some insurance policies even reimburse employees for seeing their doctor a couple times per year.
  • Critical Illness: Provides a lump sum to enrollees in the event of a critical illness (such as a heart attack or stroke) which can be used to pay medical or non-medical expenses (like child-care) while an employee is unable to work.
  • Cancer Insurance: In the event of a cancer diagnoses, an enrollee receives money with which to pay for treatment and sometimes, to help pay non-medical expenses.
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Topics: Employee Benefits, Cost Containment, Plan Design, Voluntary Benefits

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