Due to health care reform, most businesses are now very familiar with health insurance and whether or not they are required to offer it. But what exactly are “voluntary” benefits? And should you add them to your company’s benefits package?
Voluntary benefits are insurance plans or savings and discount programs that do not have minimum participation requirements imposed by the carrier and which, unlike a group medical plan, can be 100 percent employee paid. Although you, as an employer, can choose to contribute toward the cost of providing voluntary benefits, you aren’t required to. Generally speaking, anything you offer to your employees in addition to group medical coverage and a 401(k) plan and in which they are not required to enroll can be considered a voluntary benefit.
Following is a list of benefits that are always considered “voluntary”:
Employee-paid short term disability (STD)
Employee-paid long term disability (LTD)
Employee-paid supplemental life
FSAs (Flexible Spending Accounts)
Supplemental insurance plans
Offering voluntary benefits to your employees is an easy way to expand their benefits offering and show them you care.
A wide array of benefits options can reduce turnover, and better benefits and more perks typically boost employee retention.
If you partner with a Professional Employer Organization (PEO), offering voluntary benefits may come at no additional cost. While some PEOs have employer contribution requirements and participation requirements on their master plans, others may allow you to offer voluntary benefits without administration fees and other requirements.
Although voluntary benefit administration is typically pretty straightforward, it certainly adds some variables, as well as liability. Participating employees may opt to participate in multiple different voluntary plans or programs, in addition to the health plan you offer. As with your health insurance plan, there will be required participant levels.
As an employer, you have a lot on your plate. Working with a PEO’s team of benefits experts can certainly reduce your administration and liability, while helping you retain your best employees by providing a robust benefits package that will keep you competitive in today’s rapidly changing job market.
This is the seventeenth post in our 30 Days of HR Outsourcing series. Visit us each day in November for information on HR, payroll, benefits, workers’ comp and risk management topics, or subscribe to be notified instantly when a new post is published.
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