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What Are Voluntary Benefits and Why Should I Consider Them?

A comprehensive benefits package includes far more than major medical coverage.

Major medical insurance is the foundation of a solid employee benefits program and a major employer expense. For the past eight years, health care reform legislation has been a constant concern and source of confusion for many employers, amid countless hours of debates and hundreds of votes. Unfortunately, healthcare reform uncertainty has distracted employers from looking at the full scope of their benefits package. Employers who want to attract and retain the best talent need to focus on their overall benefits package and not only the major medical offerings.

There are five generations, many ethnicities and varying family situations among those in the workplace today and all of them have different financial protection needs. Our workforce is more varied than ever. While Millennials and Generation Z are all the talk, the 55+ age group is continuing to grow as well and our Hispanic labor force is growing faster than the non-Hispanic workforce. Employees are starving for solutions that help control ever-increasing health insurance and health care costs. They need greater flexibility and choice in benefits as the needs of today’s increasingly diverse workforce are very different. Voluntary benefits offer employers a solution to the challenging task of creating an employee benefits package that meets the needs of the increasingly diverse workforce.

As a way to attract and retain top talent, many employers are redesigning their benefits package to include a higher deductible health plan, paired with voluntary benefits to reduce employees’ financial exposure.

Forty-seven percent of American workers surveyed in a recent Kaiser/HRET Employer-Sponsored Health Benefits survey, say they would struggle to pay an ER visit of $400. Voluntary benefits can bridge this financial gap. Employees can choose from options such as hospital confinement, accident, critical illness, disability, cancer and life insurance among other types of coverage for themselves and their families. Because the coverage is offered through the workplace, employees can purchase it for less than they could buy it on their own. Payroll deduction adds to the convenience and most types of coverage can be paid for on a pretax basis. These factors further reduce the net cost and saves employers from payroll taxes as well.

A recent study conducted by MetLife showed a third of employees enroll in every type of coverage offered. The same study shows the primary reason for purchase is peace of mind. Employers tend to underestimate their staff’s interest in voluntary coverage.

There is a significant gap between what employees believe are must-haves and what employers offer, especially when it comes to accident, critical illness and hospital confinement insurance.

A strong employee benefits program is an essential tool for employers to compete for and retain a talented workforce. More employers are finding voluntary benefits offer solutions to help employees protect their financial wellbeing, control costs and provide expanded options for a diverse workforce. Contact your OneDigital Consultant today to learn more about incorporating these into your benefits package.