The pandemic accelerated positive shifts in attitudes about benefits, workplace culture, and behavioral and mental health. Employees’ awareness of voluntary benefits is at an all-time high as benefits professionals prepare for 2022 open enrollment.
What are voluntary benefits?
Voluntary benefits are products and services offered by employers but paid for mostly or 100% by employees via payroll deductions vs. health insurance premiums, of which employers usually pay a significant portion.
Voluntary benefits may include services such as:
- Life insurance
- Dental insurance
- Vision insurance
- Disability insurance
- Critical illness insurance
- Accident insurance
- Pet insurance
- Financial counseling
- Identity theft protection
Why would I offer voluntary benefits to my employees?
Your business can get cheaper rates for these benefits than your employees would individually, which makes voluntary benefits a bargain for employees who want the coverage. In many cases, employees are also gaining access to different types of coverage that they might not have even known about before.
Employees pay all or most of the cost for voluntary benefits. It is inexpensive for employers to offer these benefits, making it a win-win for employers and employees.
In addition, offering voluntary benefits is one of the more simple tactics to
- Retain employees
- Attract top talent
- Reduce employee stress
- Increase productivity and engagement
Benefit of benefits
For some benefits, it is possible to have employee contributions deducted from payroll pre-tax. If you choose to do this, note that your employees may have to pay taxes on some of the pre-tax benefits they receive if and when they need to use those voluntary benefits.
- 401(k) contributions
- Adoption assistance programs
- Dependent care assistance programs
- Employer-sponsored accident and health plans (including FSAs and accidental death & dismemberment policies)
- Group term life insurance (up to $50,000)
- HSA contributions
- Long-term and short-term disability coverage
Employees value these benefits
In 2021, more companies offered voluntary benefits, and more employees opted-in. Here is a sample of the percentage of US employees electing coverages as new selections:
- Critical illness: 35%
- Hospital indemnity: 32%
- Accident insurance: 24%
- Life insurance: 21%
- Short-term disability: 14%
- Long-term disability: 13%
As your benefits partner, PT Business Solutions will be able to help you determine what voluntary benefits package will work best for your business and your employees.