Understanding the Different Types of Voluntary Benefits (With 5 Real-Life Examples)
Published On: April 26, 2021
Voluntary benefits, also known as supplemental benefits or employee-paid benefits, are coverage options offered through an employer but paid (either in part or entirely) by workers through pretax payroll deductions. A key attraction is that they offer employees group rates that they might not qualify for individually, proving valuable for workers whose varying life circumstances could make it difficult for them to get the coverage they need from traditional benefits.
It can be hard to understand everything included in a comprehensive voluntary benefits plan, including what you can choose from and the positive impact it can have on employees and employers. For an easy-to-follow explainer, read on.
Categories of Voluntary Benefit Options
There are several different categories of voluntary benefits. At little or no cost to employers, businesses can add voluntary benefits to their coverage packages, giving employees the ability to customize and the full coverage they need.
Here are the most popular categories of voluntary benefits.
- Health: This category can include benefits such as critical illness insurance, cancer insurance, or accident insurance. These supplemental policies protect against unexpected medical costs and associated financial losses.
- Financial: Financial benefits help employees manage their finances. The range of topics includes credit card debt, student loan debt, investment advice, tax advice, saving, and budgeting.
- Wellness/Lifestyle: A much broader category, these benefits can include everything from legal services to gym memberships and virtual healthcare access.
- Personal/Miscellaneous: Personal benefits include remote work policies and pet insurance, both of which can afford employees greater peace of mind and support inside and outside of the workplace.
- Security: Security benefits predominantly revolve around life insurance and identity theft protection. These options offer a direct financial benefit and cover the potential losses resulting from events such as identity theft or the death of the policyholder.
So, what do these optional offerings actually look like? Here are five real-life examples to see the positive impact voluntary benefits can have on your business as a whole.
A fast-growing manufacturing company adds disability and life insurance benefit options.
The company is rapidly expanding and in need of talented and committed workers to join their team. Offering these relevant benefits will help this company attract potential employees and edge out other competing companies in the area. Plus, these additional options will provide new employees with protections that are excluded from basic coverage plans.
A community hospital adds pet insurance to its benefits package.
At no additional cost, the hospital boosts morale and productivity by demonstrating a vested interest in their employees’ lives outside of the workplace. The employees feel grateful to have this additional financial and emotional security, and they feel comforted knowing their pets will be well taken care of in an emergency.
A tech start-up offers short- and long-term disability benefits options.
The start-up is looking to hire employees who are in it for the long haul and want to communicate to potential applicants that the company is dedicated to employees' well-being. New hires can take advantage of these benefits and feel secure knowing they will be covered for circumstances, such as pregnancy, a mental health crisis, or an unexpected medical emergency.
A restaurant expands its benefits to offer dental and vision options.
For no additional overhead, a restaurant owner offers a broader array of benefits to their employees. These expanded coverage options make the restaurant more attractive and allow them to stand out as a competitive employer. Increased retention means that the quality of service at the restaurant can continue to grow as each employee continues to hone their expertise.
A city offers employees mental health support and financial counseling benefits.
A mid-sized city’s municipal employees, who often find themselves in stressful work environments, are able to receive the support they need to care for their mental and financial well-being. This leads to a higher degree of productivity and job satisfaction and a more balanced work environment across the city.
Are you curious to see what kinds of benefits companies like yours offer? Download your custom benefit benchmarking report to see how your benefits package compares.
Curious to learn more about voluntary benefits? Read our explainer titled “Insurance 101: What are Voluntary Benefit Plans?”
Director of Content, Mployer Advisor