The full guide on voluntary benefits, with answers to the most asked questions

Employee benefits have changed drastically over the past few years. As the job market remains employee-driven and job seekers look for opportunities that fit into their lifestyle, organizations have had to come up with more enticing benefits to attract and retain key employees. 

One specific benefits category that is experiencing a significant increase in popularity is voluntary benefits. Voluntary benefits are add-on benefits that an employee can opt in to in addition to the standard benefits packages provided by employers. Examples include dental and vision insurance, student loan assistance, or gym memberships. 

When you are deciding whether to accept a job offer, it’s important to understand the nitty-gritty of the benefits package on offer so you can make an informed decision. Don’t worry! Read our full guide on voluntary benefits, with answers to the most asked questions, including:

• What are voluntary benefits?

• What types of voluntary benefits are on offer?

• Why are voluntary benefits important?

What are voluntary benefits?

Voluntary benefits (also known as supplemental benefits) are products or services that are offered to employees as an optional perk. Employees pay for these benefits, either completely or partially, via payroll deductions and benefit from a reduced group rate.

The beauty of voluntary benefits is that they can be customized by employees to suit their lifestyle as well as by employers to achieve organizational goals. Once an employee has selected the voluntary benefits they prefer, these are then added to core benefits to form the overall employee benefits package. 

What types of voluntary benefits are on offer?

Voluntary benefits typically fall under four categories: health and wellness, financial perks, security, and personal benefits. Here are some of the more popular voluntary benefits that employers tend to offer as perks:

• Health and wellness. Options may include life insurance, dental insurance, vision insurance, critical illness insurance, and gym memberships.

• Financial perks.Options may include student loan assistance, mortgage protection insurance, and financial planning services.

• Security. Options may include identity theft cover, homeowner’s insurance, and home security installations.

• Personal benefits. Options may include pet insurance, remote working arrangements, legal services, and discounted goods and services.

It’s worth bearing in mind that the cost involved for each benefit will depend on the employee, level of coverage, and company size. For example, a moderate level of critical illness cover (say $15,000) for a younger employee will cost a lot less than an older employee requiring a higher level of coverage (say $30,000).

Why are voluntary benefits important?

Voluntary benefits may seem like “nice-to-haves” and not comparable to salary and core benefits, such as retirement plans and bonuses. However, these benefits are definitely worth considering as they can have an extremely positive impact on your personal and professional life. Here’s some reasons why:

• Improved health. Voluntary benefits cover gaps in group health insurance, such as your vision and dental health, so this ensures that you fully protect and maintain a good standard of health. Perks such as gym memberships promote an active lifestyle, leading to increased health and mental wellbeing. 

• Cost savings. Employers will aim to secure great deals and negotiate competitive group pricing when establishing their voluntary benefits plan. They may also contribute or share the cost of voluntary benefits. Either way you will be saving money and perhaps benefiting from perks that would be costly if you approached the service provider directly.

• Reduced stress. Life can often throw you a few curveballs, but knowing you have benefits, such as insurance or legal services in place, will go a long way to reducing your stress levels if something unexpected happens.

• Enhanced job satisfaction. If an employer is offering you additional voluntary benefits, you are likely to feel more valued in your role and as a result have increased levels of job satisfaction. 

How do employers benefit from a voluntary benefits plan?

Voluntary benefit plans are also advantageous for employers, so it can be a win-win situation for everyone. Promoting employee health and wellbeing in turn leads to increased levels of productivity and job satisfaction as well as reduced absences due to sickness or job dissatisfaction. Offering great voluntary benefits also attracts top talent and makes existing employees feel valued so they are less likely to leave the company. 

Key takeaways

1. Voluntary benefits are products or services (often discounted) that are offered to employees as an optional perk. Popular benefits on offer cover the areas of health and wellbeing, financial services, security, and personal benefits.

2. Following the impact of COVID-19, voluntary benefits have become increasingly popular as they provide improved and personalized benefit packages. 

3. Employees fully or partially pay for voluntary benefits via payroll deductions, with some benefits (such as group life insurance) also being tax deductible.

4. Improved health, reduced stress, cost savings, and enhanced job satisfaction are the key reasons why voluntary benefit plans can improve your personal and professional life.