Voluntary benefits are optional insurance and service offerings your employees can choose to enroll in, often at a group rate through your organization. They provide added financial protection and flexibility, allowing workers to customize their benefits package to better meet personal and family needs.
Voluntary benefits programs have four key characteristics:
- Employee-paid (either partially or fully)
- Offered through an employer
- Solicited and enrolled through a carrier or enrollment firm
- Paid through automatic payroll deductions
Common Voluntary Benefits
The following are common voluntary benefits:
Dental Insurance
Dental coverage focuses on preventive and diagnostic procedures to avoid more expensive services associated with dental disease and surgery. The type of service or procedure determines the amount of coverage for each visit. Each type of service fits into a class of services according to complexity and cost.
Vision Insurance
Vision insurance generally provides coverage for basic care and eyewear. Most vision plans will cover annual or biannual eye exams, eyeglass frames, eyeglass lenses and contact lenses.
Term Life Insurance
Term life insurance provides employees with financial protection for a specific period, such as 10, 15, or 20 years. If the insured person passes away during the term, their designated beneficiaries receive a death benefit. Employers often offer multiple tiers of coverage. Some may cover a lower amount of term life insurance while allowing employees the option of contributing to an additional larger policy.
Short-term Disability Insurance
Short-term disability insurance can offer financial security if an illness or injury prevents an employee from working. Most disability insurance plans define a disability as the inability or reduction in ability to perform job duties; the definition of “disability” will be specified by your employee’s policy. The purpose of short-term disability insurance is to protect workers’ income during short periods of disability.
Long-term Disability Insurance
Long-term disability insurance can offer financial security if an illness or injury prevents an employee from being able to work. Most disability insurance plans define a disability as the inability or reduction in ability to perform job duties; the definition of “disability” will be specified by your employee’s policy. The purpose of long-term disability insurance is to protect workers’ income if they become disabled for a prolonged period prior to retirement.
Critical Illness Insurance
Critical illness insurance is designed to cover out-of-pocket expenses not covered by your employees’ health insurance such as deductible and copays, as well as many out-of-network charges. Illness can often lead to extended time away from work, and critical illness benefits can offset some of those lost wages and help your workers pay routine living expenses like childcare, transportation, and rent or mortgage payments.
Pet Insurance
Pet insurance provides coverage for pet illnesses and accidents. These plans are somewhat similar to health insurance plans, but with more focus on unforeseen medical incidents rather than routine preventive visits. Most pet plans cover dogs and cats, though some may cover other animals.
Identity Theft Insurance
Identity theft insurance is designed to relieve an employee of the financial burden of repairing damages after their identity has been stolen. This type of insurance does not reimburse loss from theft, such as stolen credit card numbers or forged bank checks, but rather prevents further loss once they have already become a victim of identity theft. Also, aside from some plans that may provide free credit monitoring, identity theft insurance does not work to prevent identity theft. Instead, identity theft coverage helps with expenses as your workers navigate the identity recovery process, which is helpful whether they actually lost money to an identity thief.
Hospital Indemnity
Hospital indemnity insurance is a type of supplemental insurance plan that can be added to an existing health insurance plan to help cover the costs of a hospital stay. It does not replace a health insurance plan. Like many other supplemental insurance plans, hospital indemnity insurance pays out a cash benefit directly to employees. This type of plan pays a predetermined benefit amount per day for each hospital admission, typically up to a year.
Adoption Assistance
Adoption assistance benefits help with various parts of the adoption process. Benefits might include advice and help with paperwork, time off while bringing the child home, reimbursement for adoption-related costs, or other types of assistance. Employers who offer adoption assistance benefits understand the importance of supporting employees who choose to adopt. Employers typically design adoption assistance benefits similarly to the benefits provided for new biological parents, particularly regarding parental leave policies.
Accident Insurance
This insurance can help protect employees financially in case of an accidental injury. Regular medical insurance typically won’t cover all the expenses that result from injury, so accident insurance can help fill those coverage gaps as they pay out-of-pocket medical bills.
Legal Plans
Group legal plans can give employees access to legal services they probably couldn’t otherwise afford. Employees pay into the program through payroll deductions. When they need legal assistance, they have access to an attorney to help them without the usual high cost of legal fees.
These are common voluntary benefits; however, you may not be able to offer all these options. Additional voluntary benefits may also be available. If you have questions, check with your Unland agent for further resources.