What Are Enhanced / Voluntary Benefits?
According to the Society for Human Resources Management, “Voluntary benefits are products—such as life, disability, critical-illness and accident insurance, as well as pet coverage, ID theft protection, legal services and financial counseling—offered through an employer but paid for partially or solely by workers through payroll deferral. The attraction of these benefits is that they can offer individual employees group rates that they would likely be unable to obtain on their own.”
In essence, when your business offers voluntary benefits, you are giving your employees a menu of additional things they might want, at a better price than they could get on their own. Some businesses opt to provide a subsidy or a dollar match to their employees, but the plans are generally affordable even if the employee pays the full premium.
What Can Voluntary Benefits Do For My Business?
Voluntary benefits can provide a number of competitive advantages to businesses. Improved employee attraction and retention, Increased employee wellness, and even increased productivity and performance can all be linked to voluntary programs.
What Kinds of Employees Will Utilize Voluntary Benefits?
One of the biggest attractions for many businesses is that voluntary benefits are not regulated as heavily as traditional medical benefits. As a result, businesses can offer benefits to part-time, or even non-traditional employees (such as 1099 contractors) without creating any additional compliance burdens.
Because of the flexibility of voluntary programs, they are popular in a wide range of sectors including Construction, Education, Government, Retail, and Tech.
What Sizes of Businesses Can Offer Voluntary Benefits?
Another key difference between voluntary benefits and traditional medical benefits, is that voluntary can be offered in much smaller groups. While larger enterprises might offer just a few voluntary products to compliment their existing benefit packages, many small, family-owned businesses rely on voluntary products to fill the gaps when traditional benefits are cost-prohibitive based on their size.
Voluntary benefits can be found on offer at companies in the Seattle area as large as Microsoft and Boeing, and as small as a family-owned corner store.
What Will It Cost Me To Offer Voluntary Benefits?
Unlike traditional medical benefits, voluntary benefits can be offered as a payroll deduction with no employer contribution. This means that aside from minimal administrative overhead voluntary benefits don’t have to cost your business anything.
But just because they don’t have to doesn’t mean they shouldn’t. If you have the budget for it, offering a small contribution towards your employees’ voluntary benefits packages can pay off in big ways. Employers who contribute to their employees’ voluntary benefits tend to, unsurprisingly, see higher participation levels. When more of your employees take advantage of your voluntary program, the effect on employee wellness, retention, and productivity increases as well.