Retirement plan sponsors are the first, and most important, line of defense in providing employees with well-managed retirement savings plans.
Unlike traditional health coverage, voluntary benefits can be a cost-effective way to round out your benefits package. Offering voluntary insurance is one simple way to give your employees access to a financial "safety net" in the event that they suffer an accident or disability. Voluntary insurance can alleviate the challenges your company faces with healthcare costs, and you’ll be able to protect valuable employees from the added monetary and emotional stress that comes with sustaining an accident or illness that causes hospitalization or an inability to perform normal job functions.
By providing choices to your employees so they can decide on the best options for them and their families, you can give your business an edge when it comes to recruitment, and you can enhance employee loyalty and retention. The cost can either be passed onto the employee or absorbed by the company. In this blog post, we’ll discuss the types of voluntary benefits you can offer to your employees, and give you tips for gaining employee participation.
Types of Benefits
Dental and vision
Dental and vision are the most commonly offered voluntary benefits. Vision insurance helps with the cost of examinations, treatments, prescriptions, surgical procedures, and equipment. Common coverages for vision insurance include eye exams, eyewear, and surgeries that are deemed medically necessary.
According to Health Markets, “Dental insurance often comes in the form of “100-80-50.” This means that the insurance provider pays for 100 percent of the cost of preventive care (such as cleanings and routine checkups), 80 percent of the cost of basic procedures (such as fillings or root canals), and 50 percent of the cost of more advanced procedures (such as bridges or crowns).” Additional orthodontics benefits can be added to most plans to help pay for braces or Invisalign for employees or their children.
Short-term disability
In the event that an employee’s temporary injury or illness prevents him or her from returning to work immediately, a short-term disability insurance plan will help to replace a percentage of their income for a short and specified time period, sometimes up to a year.
Long-term disability
When an employee cannot work for an extended period of time, a long-term disability plan can help cover a portion (up to 2/3 of their monthly salary) of their income. Long-term disability plans typically kick in after a short-term disability policy has run out, and will pay until Medicare coverage is applied.
Critical Illness and Cancer Insurance
According to the National Cancer Institute, more than 1.8 million Americans were diagnosed with cancer in 2019. Treatments for cancer can be very costly, creating stress not only from the pain and discomfort of the medical treatment, but also from the financial stress of medical and personal bills. If an employee has been diagnosed with cancer or another critical illness, this insurance could provide them with cash benefits that can supplement the cost of their deductible and other out of pocket expenses. With no cost to your business, you can give your employees the option to purchase voluntary cancer insurance to help them with the astronomical costs associated with cancer treatment and give them the peace of mind that comes with knowing that if they were to get sick due to cancer, their families won’t be burdened with the financial hardship of staggering medical costs.
Term and Whole Life Insurance
There are two main types of life insurance: term and permanent, or whole life insurance. Term life insurance tends to be among the least expensive types of life insurance available for individuals (but this varies based on specific medical conditions). A $30,000 term life insurance policy is a good example of an employer paid voluntary benefit that would cover any burial costs for the employee or their family.
As the name suggests, a whole life policy covers your employees for their whole life, as long as they continue to pay the premiums. A portion of the money put toward the policy builds up a cash value component within the policy that may allow the policyholder to access funds in the future on a tax favorable basis. Should the insured pass away, a death benefit is paid to the beneficiary of the policy.
Accident Insurance
For employees who are unable to work because of accident-related injuries, accident insurance can cover expenses not covered by major medical plans. The insured can receive a cash benefit for bills and personal expenses until they are able to return to work. An employee can also get accident insurance for their family. If they have children who are active in sports, family accident insurance would help cover the cost of sports-related injuries.
Gaining Employee Participation
Purchasing insurance through an employer is often cheaper and easier than buying insurance individually. Employees can benefit from voluntary insurance in several medical cases such as accidents, illness, hospitalization, or disability. It can supplement their income, as well as cover additional medical costs. It helps employers:
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Support their overall benefits package (or program)
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Provide employees with additional benefits options
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Provide employees with cash benefits for out-of-pocket medical costs
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Provide relief of financial stress and anxiety so workers can focus and be more productive
When it comes to gaining employee participation for voluntary benefits, education is key to participation. Here are some steps that you can take to make sure your employees are getting the maximum benefit from the programs you offer:
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Ensure your employees realize the risk of going without coverage
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Explain the convenience of paying through payroll deduction and, in some cases, the pre-tax deductions
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Ensure that employees understand their policy and what is covered so that there are no misunderstandings that may lead to frustration
Given that 62% of employees say they would leave their job for better benefits, adding voluntary benefits at no cost to your company is a no-brainer. Seek out voluntary insurance programs as a way to offer employees additional benefits, savings, convenience, and financial assistance. Providing your employees vetted vendor options at discounted rates demonstrates care for your employees.
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