What are Voluntary Benefits?

‘Voluntary benefits’ refer to additional employee benefits that are offered by an employer on a voluntary basis, meaning employees have the option to choose and participate in these benefits based on their individual needs and preferences. Unlike core or mandatory benefits (such as health insurance or retirement plans), voluntary benefits are typically not subsidised by the employer, and the cost is often borne by the employees themselves.

Here are some key points related to voluntary benefits:

Employee choice: Voluntary benefits allow employees to customise their benefits package by selecting additional coverage or services that align with their personal circumstances and preferences. Employees have the freedom to opt in or opt out of these benefits based on their individual needs.

Additional coverage: Voluntary benefits often include supplemental insurance coverage beyond the basic health, dental, or vision plans provided by the employer. These may include options such as life insurance, disability insurance, critical illness insurance, accident insurance, or supplemental health coverage.

Flexible spending: Some voluntary benefits include flexible spending accounts or health savings accounts, which allow employees to set aside pre-tax dollars to cover eligible expenses, such as healthcare expenses or dependent care expenses. These accounts provide tax advantages and flexibility in managing out-of-pocket costs.

Work-life balance: Voluntary benefits may also extend to services or programs that promote work-life balance and well-being. This can include access to employee assistance programs (EAPs), wellness programs, fitness memberships, financial planning services, childcare assistance, or legal aid services.

Cost and affordability: While voluntary benefits are not typically subsidised by the employer, they are often offered at group rates or negotiated rates, making them more affordable compared to individual plans available in the open market. Employees may have the advantage of accessing these benefits at a lower cost due to the group purchasing power.

Supplementing core benefits: Voluntary benefits complement the core benefits offered by the employer and provide employees with additional options to enhance their coverage or address specific needs. They can help fill gaps in coverage or provide specialised benefits that may not be included in the core benefit package.

Employee retention and satisfaction: Offering a range of voluntary benefits can contribute to employee satisfaction and retention. It demonstrates the employer’s commitment to meeting the diverse needs of employees and providing them with a comprehensive benefits package that goes beyond the basic offerings.

Communication and education: Employers should effectively communicate and educate employees about the available voluntary benefits, including the features, costs, and enrollment process. Clear and accessible information helps employees make informed decisions and maximise the value of the voluntary benefits options.

It’s important for employers to evaluate the needs and preferences of their workforce when selecting and offering voluntary benefits. Consulting with benefit providers, conducting employee surveys, and analysing trends in the industry can help employers identify the most relevant and desired voluntary benefits to offer their employees.