What Are Voluntary Benefits?
Voluntary benefits are additional coverage options that employees can choose to purchase, often at a discounted group rate, alongside their core benefits like health insurance. Unlike core benefits, which employers often subsidize, voluntary benefits are typically paid for by the employee through payroll deduction, though some employers choose to cover part or all of the cost as an added perk. Because they’re optional, employees can generally decide for themselves whether a given voluntary benefit fits their personal circumstances and budget.
Common Types of Voluntary Benefits
There are several common categories of voluntary benefits that employers add to their group offerings. These can include supplemental life insurance beyond a base employer-provided policy, disability insurance, critical illness or accident insurance, dental and vision plans, and legal or identity theft protection services. The right mix depends on your workforce’s needs and interests.
Why Employers Consider Adding Voluntary Benefits
Offering voluntary benefits can be a way to enhance your overall benefits package without significantly increasing your direct costs, since employees typically pay the premiums themselves. This can make your total compensation package more competitive when recruiting or retaining employees, particularly in a job market where candidates are comparing benefits offerings closely.
Understanding Employee Interest
Before adding new voluntary benefits, it can help to survey employees about which types of coverage they’d value most. Workforce demographics, such as the age range of your employees or whether many have young families, can also inform which voluntary benefits are likely to see strong participation.
Keep Enrollment Simple and Education Clear
One challenge with voluntary benefits is that adding too many options can make open enrollment confusing for employees. Working with your insurance agent or broker to select a manageable number of well-chosen voluntary benefits, along with clear educational materials or decision support tools, can help employees understand their choices without feeling overwhelmed. It’s also worth explaining upfront which voluntary benefits, if any, are portable, meaning an employee could keep the coverage if they leave the company, since that detail often influences whether someone chooses to enroll.
Timing Voluntary Benefits Around Core Plan Changes
If you’re also making changes to your core health insurance plan this year, think about how voluntary benefits fit alongside those changes. For example, if you’re increasing deductibles on your core medical plan, some employees may be especially interested in supplemental accident or critical illness coverage that helps offset higher out-of-pocket costs. Presenting these options together, rather than as an afterthought, can help employees see the full picture of their benefits.
Explaining the Enrollment Process Clearly
Since voluntary benefits are optional and employee-paid, it helps to be especially clear about how enrollment works, when premiums are deducted, and what happens if an employee wants to add or drop coverage outside of open enrollment. Clear, written materials can reduce confusion and calls to HR later in the year.
Revisiting Your Voluntary Benefits Lineup Periodically
Just as you review your core benefits regularly, it’s worth periodically checking whether your voluntary benefits lineup still reflects what your employees value. Participation rates, employee feedback, and changes in your workforce over time can all signal whether it’s worth adjusting your voluntary offerings at a future enrollment period.
Considering Employee Assistance Programs as a Complement
Some employers also pair voluntary benefits with an employee assistance program, which can provide short-term counseling, financial coaching, or referral services at no direct cost to employees. While not always classified as a voluntary benefit, it’s another option worth discussing with your broker as part of a well-rounded benefits package.
Rounding Out Your Benefits Strategy
Voluntary benefits won’t replace the importance of core offerings like health insurance, but they can be a meaningful way to give employees more choice and flexibility in how they protect themselves and their families.
Finkelmeier Insurance Agency can help you evaluate voluntary benefit options for your group benefits package. Call us at (419) 739-4000 or request a quote online.