Whether you’re an employer or an employee, you know that a great benefits package is a huge advantage for you. Employers who offer their employees more benefits and coverage have an advantage in hiring and retaining the most talented employees. Employees, on the other hand, want benefits to help them pay for costly medical treatments, protect them from catastrophic loss, plan for retirement, and more. But meeting everyone’s expectations and doing so within a budget can be difficult. Employers are concerned about containing the skyrocketing costs of health plans, for example, while employees want better and more flexible coverage for themselves and their families. If you’re hoping to balance the needs of the employee with those of the employer, you should look no further than group and voluntary benefits.
What Are Group and Voluntary Benefits?
Group and voluntary benefits allow employees to take advantage of a special group rate for different kinds of insurance coverage. Group benefits are paid by the employer and are included in an employee’s benefit package. Common examples include group life insurance, long term and short-term disability. Dental insurance is usually in the group category, though often employees pay a portion of the monthly premium. Voluntary benefits, on the other hand, are paid by employees who want additional coverage to address their unique needs. These benefits can include everything from additional life insurance, supplemental long-term disability insurance, and voluntary dental coverage (100% employee paid) and can even include innovative benefits like an ID theft protection or college tuition scholarship plans. The real advantage of voluntary benefits to employees is they pay a much lower premium than they would if they simply bought an individual policy from a local insurance agent, and they usually don’t need medical exams and underwriting for voluntary benefits.
How Employees Benefit
It’s clear why employees like these types of benefits: They have more choice with voluntary benefits, while the basic protection (life insurance, disability etc.) is covered by company-paid group benefits. Employees have much more freedom and flexibility to tailor the benefits that meets their specific needs, like extra life insurance if an employee has a large mortgage or many children he wants to put through college. Or additional disability insurance if an employee is the sole wage earner, and he doesn’t want to bankrupt his family if he becomes disabled. Offering voluntary benefits that complement the group benefits and are appropriate for the employee base demographic means employees get better coverage in the areas they need the most protection at a price they can afford.
How Employers Benefit
Employers who offer complementary group and voluntary benefits that are attractive to their employee population (e.g. basic life insurance for hourly employees that is affordable) and that appropriately meet their needs have a more robust benefits package than the competition, which can be a significant advantage in hiring and retaining talented employees. Potential employees tend to seek out employers who offer better benefits, and those employees who already have great benefits packages are more likely to stay at their jobs and be more satisfied. And, remember, voluntary benefits cost the company nothing.
The Bottom Line
Group and voluntary benefits can be a win-win when done correctly. When employers have group and voluntary benefits that complement each other and are appropriate for the employee demographic, this robust benefits package can be a strategic advantage for companies trying to hire and retain talented employees. And for employees, a well-chosen offering of voluntary benefits (at no expense to the company and low rates to the employee) allows them to choose only the benefits that are right for them.