What Are Voluntary Employee Benefits?
Voluntary employee benefits are insurance products added to employee’s core compensation and benefits packages through payroll deductions on a voluntary basis. This allows flexibility for employees to decide how to spend their discretionary income on additional products and services that fit their unique needs.
Most plan sponsors know the importance of a 401(k) and health care coverage, but many may not realize the advantages of offering voluntary employee benefits through the company. Unlike traditional benefits, employees are responsible to pay most (or all) of the cost of these benefits.
Why Should Plan Sponsors Offer Voluntary Employee Benefits?
An interest in voluntary employee benefits has increased by both employers and employees, more than ever before. With medical costs on the rise, higher healthcare costs have forced employers to choose alternatives and shift more of the costs to employees. Voluntary employee benefits are accessible and convenient, usually offering lower cost and/or better options for employees.
Some general reasons why more savvy employers are leaning toward adding supplemental insurance include:
- Long-term employment has become the exception; with more mobile employees than ever before, employers who offer better voluntary employee benefits stand out among the competition and recruit and retain high-quality talent.
- Considering more women are in the workforce today than in the past and with a divorce rate of 50%, many single parents are in need of a good benefits plan. Voluntary employee benefits can be a convenient and appealing option to many of these groups of employees.
- An increased focus has been put on benefit communication programs including a greater use of technology and consumer driven health care. Employers are more aware of these benefits, get curious and inquire, “What are voluntary employee benefits.” This supplemental insurance may improve employee morale and allow them to receive tax benefits from it.
- Employees have different situations and different needs, they want the ability to customize their benefits based on these personal needs. These choices are important to employees due to the diversity of their needs— and they are willing to pay more for having a choice.
Voluntary employee benefits are popular among employees, and for good reason. Business owners can attract and retain good employees by offering a rich benefit platform.
Voluntary Employee Benefits Product Overview
Voluntary benefits help both employers and employees. With customized benefits, enhanced financial security and no direct cost to employers, these benefits provide value in different ways.
Some typical product lines include:
- Life Insurance – employees can typically elect up to a certain amount without needing to go through medical underwriting.
- Vision Insurance – typically includes free annual eye exam and discounts on glasses and contacts.
- Dental Insurance – generally covers preventive services and offers a discount on other treatments.
- Critical Illness – insurance supplements major medical coverage by providing a lump-sum benefit that you can use to pay the direct and indirect cost related to a covered critical illness.
- Short-term Disability – covers a percentage of lost pay due to time away from work because of a disability, generally up to three or six months.
- Long-term Disability – covers care needed over a longer period of time, for injuries that could affect someone for years.
- Accidental Death and Dismemberment – coverage in case an employee dies in an accident or loses a limb, vision or hearing.
- Telemedicine – provides 24/7 access to state licensed, board certified doctors through virtual consults by phone or secure video.
- LegalShield – provides access to legal counsel and advice from qualified lawyers.
- IDShield – provides access to identity theft protection and restoration services.
Northeast Professional Planning for Voluntary Employee Benefits
NPPG provides a full range of employee benefits planning services, including comprehensive health benefits planning and design, voluntary employee benefits, comparative market analysis, employee enrollment and ongoing education, health and welfare plan document compliance and other integrated employer services.
Our experts manage the entire scope of plan administration and offer customized solutions for our clients to help balance costs while designing a voluntary benefits program that employees will embrace.
For more information, contact Northeast Professional Planning Group, Inc. corporate office in Red Bank, NJ at (732) 758-1577.