Overview: What are Voluntary Benefits?
One of the most important ways to recruit and maintain the best talent is to offer a competitive benefits package. As premiums for health insurance continue to rise in the individual market, offering group coverage is effectively mandatory for any competitive benefit offering. Although there are still a number of choices in terms of health plans that can help set you apart, it is with voluntary benefits where you can really make a difference. Making sure that you offer competitive dental, disability, life, and other coverage, will go a long way to recruiting and retaining employees.
Dental
There are a number of studies which link good oral health to better overall health.[1] Thus, an important part of keeping your employees healthy and happy is to ensure they have access to dental insurance. Dental offerings can be a relatively inexpensive option for your employees. We will be looking at dental plan design in a later post, but most plans offer coverage for basic and major services. For your employees with children or who may require adult braces, there are plans which offer an orthodontic component. Dental plans are usually available to employers with ten or more employees, but there are exceptions. Given their cost and the known importance of oral health, dental insurance remains one of the most common and desired types of voluntary benefits that employees look for when evaluating a benefits offering.
Vision
Vision is one of the most cost effective voluntary benefits. With plans costing as low as $4 a month, employees who require glasses or contacts can receive a substantial benefit. An eye exam is included in most health plans. So why offer vision coverage? Vision plans are often material benefit plans. This means that they provide significant savings if your employees need to purchase glasses or contacts. The material discount can provide assistance with frames, lenses, contacts, and other necessary vision correction. With around 75% of the adult population requiring some form of vision correction[2], this is an excellent benefit that would appeal to many employees.
Disability
Even with good health insurance, the fear of an extended illness or disability leaving an employee unable to work and collect an income is common. Fortunately, disability insurance exists to cover the gap when an employee is unable to work for an extended period of time. Both Short Term and Long Term disability are available. Short Term disability protects an employee when they are unable to work after several days due to the same condition. These policies typically pay for 13 weeks, and can be used to cover absence due to pregnancy, as well as illness or accident. Long Term disability comes into effect once an employee has either exhausted their Short Term coverage or after 90 days of absence. Long Term benefits pay usually until the Social Security Normal Retirement Age.
Short Term and Long Term disability benefits are an important part of any benefit offering. They ensure that employees have a sense of security should they experience an unexpected illness or accident. These are plans that can be designed around your needs and the needs of your employees. Some employers cover the cost of these for their employees. Others offer the disability coverage as a voluntary benefit. Either way, disability insurance is a reasonably cost effective way to ensure your employees have some peace of mind in the event of a health crisis. A recent study found that 40% of Americans can’t afford a $400 emergency, meaning that many cannot live on their savings.[3] Protecting your employees’ income is thus a vital and popular benefit.
Life and AD&D
Many companies provide a group life and AD&D policy for their employees. This benefit is often included to ensure that employees’ families are take care of in the event of death. However, these benefits often have a modest amount of coverage, sometimes not covering the employee’s annual salary, for example. In these cases, it can be a positive benefit to offer your employees the option of adding voluntary life and AD&D coverage. Whether on top of existing group coverage, or as a standalone benefit, voluntary life and AD&D is an important way to ensure that your employees have peace of mind for their loved ones if the worst should come to pass.
Accident
An often overlooked benefit, Accident coverage can be very popular when offered to employees. Accident coverage provides a set payout in the event that a person is injured as the result of an accident. These payout vary, but they are often enough to help cover the incurred medical expenses that result from the accident. Accident coverage also works well in tandem with disability coverage. It can help to cover initial expenses until any Short Term disability benefit pays out. Finally, many accident plans offer a wellness benefit. This benefit pays employees if they receive their routine physical or vaccination during the course of the year. This payment can help defray some of the cost of the coverage itself, and has the added benefit of encouraging your employees to get their annual physical!
Conclusion
We’ve presented here some common voluntary benefits that employers offer. These benefits can help you to round out your benefits package in a way that won’t break your budget. It also allows your employees some control over the benefits they want. If you’re interested in learning more, or want to add some voluntary benefits to your benefits package, please contact us! We can be reached at info@morganplan.com, or by phone at 800-484-2199.
[1] www.mayoclinic.org/healthy-lifestyle/adult-health/in-depth/dental/art-20047475
[2] https://www.thevisioncouncil.org/sites/default/files/Q415-Topline-Overview-Presentation-Stats-with-Notes-FINAL.PDF
[3] http://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html