Employers began offering health insurance as a workplace benefit in the 1940s. For the businesses, offering health insurance was a way to attract more employees in response to the wage limitations set by Congress in the 1942 Stabilization Act. For workers, the employer-paid expense was not considered income for tax purposes. Therefore, employers offered a valuable work incentive while employees gained a tax-free benefit.
Over the past 80 years, a lot has changed in employer-sponsored benefits. The offers have grown to include dental, vision,
life, and disability insurance. But the costs have also become increasingly shared by employees in many cases. Despite employer contributions, the average person has to deal with rising out-of-pocket healthcare costs. Voluntary
benefits, also called supplemental benefits, are gaining popularity as a way to help employees offset these additional costs.
What are Voluntary Benefits?
Voluntary benefits are supplemental to an employer’s sponsored health insurance plan. While individuals can obtain limited private coverage from providers, employer plans offer pre-tax payroll deduction, affordable group rates, and a wider variety of coverage that make them far more accessible than private plans. Perhaps one of the greatest features of most supplemental policies is that they are portable, meaning employees can keep the policy – often at the same group rate – even if they leave the company.
Voluntary benefits are typically offered as an à la carte menu of policies that employees can choose based on their unique needs and budget. Common supplemental insurance policies include:
- Accident
- Hospital indemnity
- Short-term and long-term disability
- Cancer or critical illness
- Dental and vision
- Life
The word supplemental is key here, as many employer-sponsored health plans include coverage for several of these issues. Voluntary benefits policies provide payouts that are supplemental to primary insurance. Basically, they help to cover the employee’s financial responsibility portion of many healthcare claims. Also, the payouts are determined by the policy irrespective of what is covered by primary insurance.
How Can I Incentivize My Employees to Enroll in Voluntary Benefits?
Convincing employees to enroll in voluntary benefits is a common concern for employers. These plans are less familiar than traditional health plans, there are a lot to choose from, and many people just are not sure they will use the benefit. Education is essential in helping individuals take advantage of these valuable benefits.
Employers should deploy their supplemental policy representatives to help educate employees on voluntary benefits. During a staff meeting, the representative can review the highlights and costs of a few popular plans. They often share real-life examples of how an individual was able to cover lost wages after an accident with a hospital stay, or pay for gas
and meals while traveling to the city for cancer treatments. While the representative is on site, employees should be offered time for a private meeting in order to ask specific questions.
Employers can improve supplemental benefit enrollment by highlighting the affordability. Premiums are typically listed as a payroll deduction amount so that no one has to calculate the costs. The payouts are also detailed within the plan, so it may be helpful to illustrate how an employee might be able to recoup deductibles and co-pays. Finally, employers might offer to pay the premiums for an initial period so that employees enjoy the benefits while considering their value.
Voluntary Benefits Enhance Workplace Wellness
The business owners we work with typically look at employee benefits as more than a general payroll expense. They are truly invested in their employees’ health and wellness, and they want to offer a benefits package that reflects their values. Smyrl Insurance regularly supports small businesses in their efforts to provide meaningful and valuable benefits. We educate, nurture, and empower our clients to explore the options that make the most sense for their budget and workforce. Contact us to review your existing coverage and consider supplemental policies that work for your small business. We serve clients for many types of business insurance, including General Liability and Voluntary Benefits in Hatfield, Lansdale, Souderton, Harleysville and throughout Montgomery County, Pennsylvania.
