Voluntary benefits—also called voluntary group insurance—are plans provided to employees at little to no cost to the employer. They allow employees to enroll in coverage at significantly lower rates than they would pay as individuals, and often help employees cover expenses that may not be paid for by other types of insurance.
Voluntary benefits allow employers to offer more extensive coverage without added costs, and help employers save on taxes. Since premiums are paid via automatic pre-tax payroll deductions, employers pay less payroll taxes—a win-win for you and your employees.
Think you can’t afford to offer the expensive, extra benefits larger companies use to attract top talent? Think again.
The most common voluntary insurance plans complement your healthcare offerings and help provide financial security for your employees when they’re sick or injured. The following basic employee benefits coverages are a good starting point for you to consider as you build your voluntary benefits plan:
Dental insurance typically covers the cost of cavities and cleanings and helps cover some of the cost employees pay every time they visit the dentist, so workers don’t end up with expensive bills for extensive dental work or oral surgery.
Vision insurance helps cover routine visits to the optometrist for eye exams, as well as the cost of glasses and contacts, which is not covered under a typical health insurance plan. Offering vision insurance helps your employees care for their vision without racking up huge bills.
There are two main types of disability insurance: short-term and long-term. Both types of plans are intended to help replace a portion of an employee’s income in case they become too ill or injured to work. Short-term disability insurance typically covers benefits for a period of up to 3-6 months, and long-term disability insurance may pay benefits for a period of five, 10, or 20 years—or even until an employee reach retirement age, depending on the plan. As an employer, you can offer either type of coverage, or both, as a voluntary benefit.
There are several types of life insurance, but every policy is primarily intended to pay benefits to an employee’s beneficiaries in the event of their untimely death. Offering life insurance as a voluntary benefit can help provide financial confidence to employees whose loved ones depend on their income.
The following voluntary benefits are also referred to as supplemental health insurance plans. These insurance plans can further complement your healthcare offerings by providing payouts to help offset unexpected and large expenses that medical insurance may not cover:
Accident insurance helps cover any extra, out-of-pocket expenses not covered by health insurance that an employee might face if they’re injured in an accident.
Like accident insurance, cancer insurance helps cover out-of-pocket expenses that aren’t covered by health insurance. If an employee is diagnosed with cancer, this coverage can help ease the financial strain of treatment.
Critical illness insurance offers similar coverage if an employee becomes very ill or suffers a serious medical problem, like a heart attack or stroke.
If an employee is hospitalized, hospital indemnity insurance can help cover the costs associated with the stay. It can be especially valuable for employee with high deductibles and copays, who may need assistance with childcare if hospitalized, or who might need to travel far from home to receive medical care.
If you’re running a company with as few as two people or as many as 10,000, you should consider offering voluntary benefits. Voluntary group insurance can be more affordable, , has minimal participation requirements, and offers guarantee issue on some products. These benefits can help you attract and retain talent and stay competitive.
Voluntary benefits can be offered a few different ways:
- Traditional voluntary plans
These plans are 100% employee-paid. Employees select benefits that best meet their needs and budget, often at lower group rates.
- Voluntary buy-up plans
Employers pay for basic coverage, and employees are given the option to buy additional coverage.
- Multi-coverage packages
Products offering basic protection are bundled together for easy selection and rates. These packages offer employees both convenience and affordable rates.
The value that voluntary benefits can offer to your workforce is clear. Guardian can help you decide on the right mix for your business.