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This probably won’t come as a surprise to you, but your employees deal with stress on a daily basis — and we’re not talking about work-related stress. More often than not, it’s financial stress.
Indeed, according to one employee survey, 59 percent said they were stressed about their finances. That research indicated that financially-stressed employees are five times more likely to be distracted at work and more than half spend more than three hours a week of work time dealing with financial concerns.
If employers can help alleviate their employees’ financial stress and improve financial literacy, productivity could increase and they may even attract better quality candidates because of their benefits program and retain the current ones they have.
Voluntary benefits are optional benefits made available through the workplace. Employees can elect the coverage and pay for some or all of the premiums themselves, often through payroll deductions. Sometimes certain voluntary benefits may be subsidized by the employer. Savvy candidates often look for these optional benefits when considering job opportunities.
If you’re finding that attracting and retaining quality employees can be competitive, consider that voluntary benefits can offer a low-investment opportunity to provide meaningful and comprehensive benefits without breaking the bank. For smaller employers, voluntary benefit packages are a way to compete with larger businesses that often are able to offer more diverse benefits.
Making your voluntary program a success
You want your employees to feel protected and confident, and voluntary benefits can help. They may include access to products such as:
- Life and disability income insurance.
- Employee assistance programs (EAPs) that help employees with personal concerns, such as stress management and smoking cessation.
- Financial literacy training.
However, critical to the success of any voluntary program is not only selecting a set of quality products from a reputable and financially strong provider to the workplace, but also complementing them with employee education, easily accessible enrollment tools, and resources and guidance to help employees decide which benefits are right for them.
Employees should understand the products benefits, weigh the costs, limitations, and figure out how much coverage they need.
Consider offering tools that help an employee create a roadmap for their individual benefits, budget, needs, and solutions. Most employees make their voluntary benefit selections during annual open enrollment, so clear communication and easy-to-use tools at that moment are key.
It's best for employers to consider their voluntary budget from a holistic viewpoint — what can the company afford to spend on financial education, tools, and if possible, in subsidizing employee out-of-pocket costs? Alternatives to funding a defined voluntary benefits offering for an employee group might include an employer contribution or a spending credit.
Types of voluntary benefits to offer
Costs can add up quickly in unusual or catastrophic circumstances, like an unforeseen injury or illness keeping an employee out of work. This is more common than you may think: a 20-year-old has a one-in-four chance of developing a disability before they reach retirement age.1
These voluntary benefits can address unforeseen costs and income loss for future risks. For example:
- Life insurance can help provide for an employee's family in the event of the employee's death.
- Disability income insurance replaces a portion of your income if you become too sick or injured to work for an extended period of time.
- Critical illness insurance generally pays a specified benefit when the insured is diagnosed with a covered condition that an employee can use for any purpose, such as out-of-pocket medical costs or in-home care.2
- Accident insurance provides a benefit based on injury type.
- Vision and dental coverage, while not typically catastrophic, may reimburse or pay a portion of the costs of covered unexpected needs or routine maintenance that can add up.
- Certain supplemental health plans may pay fixed benefits associated with a hospital stay, such as travel to medical centers outside of the United States.
Advantages of voluntary benefits for employees
One advantage of accessing voluntary benefits through an employer is that workplace coverage may be available at group or discounted rates than they may get if they were to buy the policies on their own.
Another benefit is that full medical exams may not be required to obtain coverage. Since the insurance risk is typically spread over many people, some carriers may make policies available with simplified underwriting. More costly premiums and, in some cases, medical underwriting for individual policies may preclude some employees from buying individual policies on their own.
Employees may also value the convenience of accessing voluntary benefits through the workplace. Employers may evaluate available products and providers when determining which options to make available, making it easier for employees to review their options based on individual needs and circumstances.
Finally, some voluntary products, such as individual life and disability income insurance, may be portable. That means employees own the policy and are able to continue coverage after they leave the company later.
Your financial professional can provide guidance as you navigate all the voluntary benefits options available to you. Against a backdrop of rising health care costs and uncertain economic conditions, partnering with employees to navigate their insurance needs is more important than ever. Employer-sponsored programs may make certain benefits easier for employees to access and understand their benefits and achieve financial wellness.
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Frequently Asked Questions about voluntary benefits
Q. What are voluntary benefits?
A. Voluntary benefits are optional benefits offered through the workplace. Employees commonly pay some or all of the premiums paid insurance products offered through the workplace, often at group rates lower than employees could find on their own. They let employers expand their benefits package with little to no direct cost.
Q. Who pays for voluntary benefits?
A. Employees elect and pay for voluntary benefits themselves, typically through convenient payroll deduction. Employers should determine a budget for voluntary benefits, and some may choose to subsidize costs.
Q. Are voluntary benefits portable if an employee leaves the company?
A. Some voluntary products, such as individual life and disability income insurance, are portable — meaning the employee owns the policy and can take it with them when they change jobs. Group policies may not be portable, so it's worth checking the specific product.
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1 Social Security Administration, “Understanding Social Security Disability Benefits.”
2 Subject to the policy’s terms, exclusions, and limitations.
