Give Employees What They Want With Voluntary Benefits
Voluntary benefits round out a company’s employee benefit offerings, raising them from a plan that just checks the box to a comprehensive plan employees can personalize. And with the wide diversity of employees in the workplace today, voluntary benefits are more popular than ever before.
According to the Medical Trends and Observations Report, interest in relatively new voluntary benefits, such as backup child care and financial wellness, continues to grow. But interest in supplemental coverage staples, like supplemental life insurance and accidental death and dismemberment (AD&D) coverage, is skyrocketing, too.
What are voluntary benefits?
Sometimes called worksite benefits, voluntary benefits encompass a wide range of offerings, including the following:
- Health and wellness
- Vision
- Dental
- Critical illness
- Hospital indemnity coverage
- Lifestyle
- Travel insurance
- Pet insurance
- Identity theft
- Legal assistance
- Financial security
- Short-term disability
- Long-term disability
- Life insurance
- AD&D
Generally, employers contribute a portion of the cost of this coverage or pass the full cost on to employees. However, when funded entirely by the employer (or more than 50%), these plans can be privy to better underwriting and rate guarantees. This applies particularly to vision, dental, life and disability benefits.
Depending on the plans you decide to offer, you may have to meet certain participation requirements. For example, if you are sharing the cost of a short-term disability plan with employees, only 10 employees may need to enroll. But if you are passing the full cost of coverage to employees, 15 employees may be required.
Employees pay premiums for voluntary coverage through payroll deduction. And certain benefits, like dental and vision, can be deducted pretax. Employees may also have the opportunity to convert their coverage to an individual policy if they switch jobs.
How do you know what voluntary benefits to offer employees?
In general, voluntary benefits should:
- Help employees financially: For example, critical illness insurance can help cover medical bills, transportation to and from treatment, meals for the family while at the hospital, etc.
- Be easy to understand and relatively simple to administer: For example, vision and dental insurance should cover treatment according to a schedule of benefits.
- Be easy to access: Employees should not have trouble finding a provider in their area. For example, if you offer legal services, make sure there is more than one lawyer per ZIP code to choose from.
Selecting voluntary benefits that complement your core benefits is a good place to start. Let’s look at a few examples.
- If you already provide employees with a basic life insurance benefit, you may want to add supplemental life insurance. This allows employees to increase that coverage based on their personal needs. It may also enable them to cover their dependents at a discounted rate.
- If you offer health and dental benefits, consider adding vision coverage. This allows employees to elect coverage for all their health care needs.
- If you offer life insurance and short-term disability, you may want to add long-term disability insurance. This allows employees to protect themselves financially in the case of an unexpected illness or injury.
Keep in mind your goal is to support employees. You want them to participate. Offering too many products at once may overwhelm employees and decrease enrollment.
Talk to your broker or benefits adviser
Rely on your broker or benefits adviser to help you select the right voluntary benefits mix for your employees. They can analyze your current benefit offerings and make recommendations on plans you may want to consider. They can also ensure your options remain cost-effective and provide the ongoing customer service you and your employees need. But, most importantly, they can develop goals and measurements to ensure your plan remains effective and competitive.
This content is for informational purposes only and not for the purpose of providing, financial, medical or legal advice. You should contact your attorney, doctor, broker or advisor to obtain advice with respect to any particular issue or problem.