As health care costs continue to rise, so has the demand for voluntary benefits. Since many employers find it increasingly difficult to provide employees with a complete benefit package, voluntary benefits have become an ideal solution. Voluntary benefits allow employers to offer benefits that are attractive to employees without added cost to the company. Employees benefit because they have a variety of insurance options available conveniently in one place, and often with lower premiums than individual policies they would have bought themselves.
What are voluntary benefits?
Voluntary benefits are coverages and products made available to employees for elective purchase. These programs have four key characteristics:
- 100% employee-paid
- Offered through an employer
- Solicited and enrolled through a carrier or enrollment firm
- Paid through automatic payroll deductions
Because of their cost efficiency and portability, as well as their contribution to an employee’s work–life balance, voluntary benefits are becoming a central component of many companies’ overall benefits strategies.
What are some common voluntary benefits?
- Permanent life insurance
- Disability income insurance
- Accidental death and dismemberment (AD&D)
- Supplemental health insurance
- Long-term care insurance
- Retiree medical insurance
- Dental/vision insurance
- Auto/homeowners’ insurance
- Prepaid legal services
- Pet health insurance
- Identity theft insurance
- Computer purchase programs
- Adoption assistance
Why should employers consider expanding their benefit offerings to include voluntary benefits?
- Trends show employees have strong emotional appeal towards these benefits and have come to expect them
- Usually there are no fees or costs for employers
- They complement the goals of most corporate work/life programs
- They offer easy implementation (most do not have legal and regulatory issues associated with insurance benefits)
- They require little post-implementation administration or support
What are some specific advantages to offering voluntary benefits?
- Increased expense control in the face of rising benefit costs
- Cost effective way to supplement benefit cuts or reductions
- Important tools for attractive and retaining valued employees
- Differentiate themselves from competitors (both in offerings and image)
- Opportunity to access a broader array of benefits
- Freedom to choose benefits that best suit their needs
- Affordable premiums (offer deducted on a pretax basis)
- Portable coverage
- Easy enrollment process
- More convenient and time-saving than buying on their own
- Convenience of payroll deduction
- No medical exams
- More lenient underwriting requirements
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