What is a Voluntary Benefits Plan?
A voluntary benefit plan is an additional array of benefits offered by an employer that is voluntary for employees to use and is typically paid for by the employee via payroll deductions. These types of benefits are usually offered in addition to the core benefit program provided by the employer. They represent extra benefits that the employee can opt to use at his or her own cost.
Advantages of a Voluntary Benefits Plan?
Given that employees typically pay for the cost of these benefits, you may be wondering why this is a good idea. Here are a few reasons why both employees and employers might enjoy such plans.
- Voluntary benefits may allow the employer to offer a much wider range of benefit choices, which can help to attract new employees and retain current ones.
- Adding benefits improves the benefit package without significantly increasing costs to the employer. (The main costs are setup and administration.)
- The employees get convenience and (possibly) better prices for items they may have wanted to purchase anyway. They do not need to search—the tough part is already done.
- It allows employees to pick and choose which benefits they value the most and take advantage of them. It’s customizable to employee needs.
- Payment via payroll deductions is convenient for employees, which is a bonus of such a plan.
- Even small businesses can benefit; often it does not take too many employees to get a group discount.
- When employees have peace of mind, they’re more likely to be more satisfied and engaged on the job. (Peace of mind can be the net result of some of these types of benefits, such as life or disability insurance.)
- Adding benefits like these can offset other negative changes, such as increases in health insurance premiums.
- These types of benefits are easy to offer to both full-time and part-time employees because they cost little for the employer.
- These benefits can be offered as enhancements to existing (paid) benefits. For example, if the employer offers life insurance, there could be a voluntary benefit allowing the employee to pay for upgraded coverage.
Voluntary Benefit Plan Options
One of the most common options in a voluntary benefit plan is insurance. This could include nearly any type of insurance that is not already offered by the employer. Offering insurance at the group level typically means lower premium costs per individual. Because of this, the employees who opt to sign up for these insurance plans will often times save money compared to buying the same insurance individually.
There are many different types of insurance that may be suitable for a voluntary benefit plan. Examples may include disability insurance, pet insurance, life insurance, vision insurance, dental insurance, accident insurance, critical illness insurance, umbrella insurance, and more.
Besides insurance options, here are a few more examples of what could be included in a voluntary benefit plan:
- Identity theft protection
- Legal counseling for employee family matters
- Financial counseling
- Discounted gym membership
Things To Consider And Questions To Ask Your Agent
When adding voluntary benefits plans to your organizations offering, consider surveying employees to learn what they value or want to see added as a benefit.
If you decide to offer additional health coverage’s, make sure you convey that these benefits are not a substitute for the basic health insurance plan.
For more information on how we can assist you with your Voluntary Benefits Plan, please contact our Bethlehem, PA office for a quote.