Voluntary Benefits: Employee-Paid Options That Cost You Nothing

Imagine offering your employees additional insurance coverage and peace of mind without spending a dime of company money. That's exactly what voluntary benefits allow you to do. These employee-paid insurance options can significantly enhance your benefits package while keeping your costs flat.

If you're a business owner who's heard the term "voluntary benefits" but isn't quite sure what they are or how they work, this guide will walk you through everything you need to know.

What Are Voluntary Benefits?

Voluntary benefits are insurance products that employees can choose to purchase through their employer, but pay for entirely with their own money. Think of your company as the middleman that makes these benefits available, but employees foot the bill through convenient payroll deductions.

Unlike your core benefits (like health insurance where you might pay a portion), voluntary benefits don't require any employer contribution. You're simply providing access to group rates and easy payment options.

The most common voluntary benefits include:

• Accident insurance - Pays cash benefits if an employee is injured in an accident
• Critical illness insurance - Provides a lump sum payment if diagnosed with serious conditions like cancer or heart attack
• Hospital indemnity insurance - Pays daily cash benefits during hospital stays
• Life insurance - Additional coverage beyond what you might provide as an employer
• Disability insurance - Income protection if unable to work due to illness or injury

How Voluntary Benefits Work

The process is straightforward for both you and your employees:

For the employer: You work with a benefits broker to select which voluntary products to offer. The insurance company handles enrollment, and you simply deduct the premiums from participating employees' paychecks and remit payment to the carrier.

For employees: During open enrollment or when first hired, employees can choose which voluntary benefits they want. Premiums are automatically deducted from their paycheck, often pre-tax. When they need to use the benefit, they file claims directly with the insurance company.

Here's a real-world example: Say an employee chooses accident insurance for $15 per month. That amount comes out of their paycheck automatically. If they break their leg in a skiing accident, the insurance company might pay them $500 for the emergency room visit plus $150 for each physical therapy session - money they can use however they choose.

Why Employers Offer Voluntary Benefits

Smart business owners use voluntary benefits as a competitive recruiting and retention tool. Here's why they're so effective:

Enhanced benefits package at no cost: You can tell prospective employees about a robust benefits package that includes multiple insurance options, even though you're not paying for the voluntary portions.

Employee appreciation: Your team values having access to group rates and easy payroll deduction, even if they're paying for it themselves. It shows you care about their financial security.

Reduced financial stress: When employees have financial protection against unexpected medical expenses, they're less likely to be distracted by money worries at work.

Simplified administration: Everything runs through your existing payroll system, so there's minimal additional work for you.

What Employees Get From Voluntary Benefits

Your employees gain several important advantages:

Group purchasing power: Rates are typically lower than what they'd pay for individual coverage, and coverage is often guaranteed regardless of health status.

Convenience: No separate bills to remember or checks to write. Everything comes out of their paycheck automatically.

Coverage gaps filled: These benefits often pay cash directly to the employee, helping cover deductibles, co-pays, lost wages, or everyday expenses during medical emergencies.

Portability: In many cases, employees can continue their coverage if they leave your company.

Key Considerations When Setting Up Voluntary Benefits

Before adding voluntary benefits to your package, consider these factors:

Employee demographics: Younger employees might be more interested in accident insurance, while older employees may prefer critical illness coverage.

Existing coverage: Survey your team to understand what gaps exist in their current insurance portfolio.

Communication strategy: Voluntary benefits only work if employees understand them. Plan for clear explanation during enrollment.

Minimum participation: Some carriers require a minimum number of enrolled employees, so gauge interest before committing.

How Benton Oakfield Makes Voluntary Benefits Simple

While voluntary benefits sound straightforward, the devil is in the details - plan selection, employee communication, and ongoing administration. That's where Benton Oakfield's benefits expertise becomes invaluable for Long Island businesses.

We handle the complexity of comparing carriers, explaining coverage options to your employees in plain English, and ensuring smooth payroll integration. Our team also provides ongoing support when employees have questions or need help with claims.

Most importantly, we understand the specific needs of Long Island professional service firms, medical practices, and small businesses. We can recommend voluntary benefit packages that align with your industry and employee demographics.

Ready to explore how voluntary benefits could enhance your employee package without impacting your budget? Contact our team to discuss which options make sense for your business.

Compliance Note: Benefit plan rules and tax implications vary based on company size and location. This guide is for educational purposes only. Please contact your Benton Oakfield representative to discuss how this applies to your specific situation.

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