Voluntary benefits are optional employee benefits that are offered by employers but paid for by employees through payroll deductions. Voluntary benefits can complement the core benefits that employers provide, such as health insurance, retirement plans, and paid time off. Voluntary benefits can also fill the gaps in coverage that employees may have, such as dental, vision, life, disability, and critical illness insurance.
Voluntary benefits are a win-win solution for both employers and employees, as they provide many advantages for both parties. Here are some of the benefits of voluntary benefits:
Benefits for Employers
- Enhance Employee Attraction and Retention: Voluntary benefits can help employers attract and retain top talent in a competitive labor market. According to a survey by Willis Towers Watson, 94% of employers identify voluntary benefits as a key piece of their employee value proposition and Total Rewards strategy. Voluntary benefits can show employees that employers care about their well-being and satisfaction and that they are willing to offer them choices and flexibility in their benefit options.
- Reduce Costs and Risks: Voluntary benefits can help employers reduce costs and risks associated with providing core benefits. Voluntary benefits are typically paid for by employees, which means employers do not have to bear the cost of premiums, fees, taxes, or claims. Voluntary benefits can also help employers avoid the penalties and compliance issues that may arise from the Affordable Care Act (ACA) or other regulations. For example, employers can offer voluntary health insurance plans that meet the minimum essential coverage requirements under the ACA, without having to offer a group health plan or a network of providers.
- Simplify Administration and Communication: Voluntary benefits can help employers simplify the administration and communication of their benefit programs. Voluntary benefits are usually offered through a third-party provider or broker. Vesta Employee Benefit Solutions handle the enrollment, billing, claims processing, customer service, and education of the voluntary benefit plans. Employers can also leverage the technology and tools that the provider or broker offers, such as online platforms, mobile apps, or call centers, to communicate with employees and manage their benefit programs.
Benefits for Employees
- Increase Choice and Customization: Voluntary benefits can help employees increase their choice and customization in their benefit options. Employees can choose from a wide range of voluntary benefit plans that suit their needs and preferences, such as pet insurance, identity theft protection, legal services, financial planning, tuition reimbursement, wellness programs, and more. Employees can also adjust their benefit selections according to their life events or changes in circumstances, such as marriage, divorce, birth of a child, or retirement.
- Improve Coverage and Protection: Voluntary benefits can help employees improve their coverage and protection in case of unexpected events or emergencies. Voluntary benefits can supplement the core benefits that employees receive from their employers or from other sources, such as Medicare or Medicaid. Voluntary benefits can also cover the expenses that core benefits may not cover fully or at all, such as deductibles, copayments, coinsurance, or out-of-pocket costs. For example, employees can purchase voluntary life insurance to provide additional income for their beneficiaries in case of death, or voluntary disability insurance to replace a portion of their income in case of illness or injury.
- Save Money and Taxes: Voluntary benefits can help employees save money and taxes on their benefit expenses. Voluntary benefits are typically offered at group rates, which means employees can pay lower premiums than they would pay for individual plans. Voluntary benefits are also usually paid for with pre-tax dollars through payroll deductions, which means employees can reduce their taxable income and pay less taxes. In some cases, employees may also qualify for federal subsidies or tax credits for purchasing certain voluntary benefit plans.
How to Offer Voluntary Benefits
If you are an employer who wants to offer voluntary benefits to your employees, here are some steps you can follow:
- Identify Your Business Goals: Determine why you want to offer voluntary benefits and what you hope to achieve from them. For example, do you want to enhance your employee value proposition? Do you want to reduce your health care costs? Do you want to comply with the ACA or other regulations?
- Determine Your Employees’ Needs and Preferences: Conduct a survey or focus group with your employees to find out what types of voluntary benefits they are interested in and how much they are willing to pay for them. You can also use data from your core benefit plans or other sources to analyze your employees’ demographics, health status, utilization patterns, and satisfaction levels.
- Do a Competitive Analysis: Research what other employers in your industry or region are offering in terms of voluntary benefits and how they compare to your current offerings. You can use online resources such as BenefitsPRO or Forbes to find the latest trends and best practices in voluntary benefits.
- Gather a Proposal: Contact Vesta, and have us submit you a proposal for your business needs.
- Select the Best Provider and Plan: Evaluate the proposal based on criteria such as cost, quality, service, flexibility, and innovation. Choose the broker who can offer you the best value and fit for your business goals and employees’ needs and preferences. Choose the plan or plans that can provide the most coverage and protection for your employees at the most affordable price.
- Implement and Communicate the Program: Work with the broker to implement and communicate your voluntary benefit program to your employees. You can use various methods such as emails, newsletters, webinars, flyers, posters, or meetings to inform your employees about the program and its benefits. You can also use incentives such as raffles, prizes, or discounts to encourage your employees to enroll in the program. You can also provide ongoing education and support to your employees throughout the year to ensure their satisfaction and engagement with the program.
Conclusion
Voluntary benefits are a win-win solution for employers and employees who want to have more flexibility and cost-effectiveness in their health benefits. Voluntary benefits can enhance employee attraction and retention, reduce costs and risks, simplify administration and communication, increase choice and customization, improve coverage and protection, and save money and taxes. If you are interested in offering voluntary benefits to your employees, please contact Vesta Employee Benefit Solutions today. We can help you design, implement, and manage a voluntary benefit program that meets your business goals and employees’ needs.