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Voluntary benefits are referred to as employee-paid benefits or supplemental insurance. They are benefits offered by employers to their employees at no additional cost to the employer. The employees pay the full cost of the plan, but it’s made available to them through their employer.
Voluntary benefits offer employees access to purchase additional benefits if they choose to do so in addition to the basic benefits their employers may provide. Typically, employees who choose voluntary benefits also receive a discounted group rate they wouldn’t be able to receive on their own.
When offering voluntary benefits, employees have the opportunity to customize their plan based on their lifestyle.
The benefits employees can choose from encompass areas ranging from:
- Personal and miscellaneous
The customization that voluntary benefits allows is rising in popularity, especially as Millennials and Generation Z grow in the workforce.
According to a study from LIMRA, about 57% of employers in the United States offer voluntary benefits. They tend to lean towards voluntary benefits because of the flexibility offered in customization of what they want covered instead of blanket coverage they won’t use. Employers looking to attract younger talented populations should consider offering voluntary benefits.
Employee Benefits of Voluntary Benefits
As an employee, what are the benefits to choosing a voluntary benefit plan instead of a traditional coverage plan? The list below explains the benefits of voluntary plans:
- Group purchasing rates help you as an employee have access to discounted benefit prices that you normally wouldn’t have access to alone.
- Choose what you want to include and exclude in your plan based on your personal needs.
- One less bill to pay monthly because it is deducted from your payroll before tax.
- They can offset increased prices in healthcare insurance premiums.
- Financial safety net in case traditional insurance does not fully support you.
Traditional insurance plans include premiums and deductibles for coverage you may not even want. With voluntary benefits, you can mix and match. Let’s say you are looking to cover dental care, and critical illness insurance, but you don’t want to include vision services.
You can create that plan and only pay for what you want and need, nothing more.Employer Benefits of Voluntary Benefits
As an employer, offering voluntary benefits helps you all around:
- Reduce out-of-pocket health care costs
- Paid 100% by the employee
- Access to group rates
- Gives employees the choice to choose a tailored healthcare plan instead of a stringent plan
- Saves you billing time through automatic payroll deductions
- Attract and retain top talent since about 77% of workers say that benefits packages are important in deciding to accept or reject a job offer
- These benefits can be offered to full and part time employees
By offering the opportunity to take advantage of voluntary benefits, you establish peace of mind for employees that they are covered the way they best see fit. Employees with peace of mind are able to focus more at work, and be more satisfied and engaged.
Voluntary benefits are a win-win situation for employees and employers. The employer saves on coverage costs while the employee takes advantage of creating their own plan.
At SBMA, we understand the rising importance of voluntary benefits in the workforce. Our goal is comprehensive coverage to provide a complete solution for employers who want to provide affordable benefits to their workers. We provide a variety of options for employees to choose from. Reach out to our team of brokers to see what voluntary benefits you can offer your employees today.