US Employers are legally required to provide their employees with health benefits, as part of the Affordable Care Act (ACA). In fact, over 85% of private businesses offer their workers employer-sponsored health insurance.
Going beyond basic medical coverage, one in three American companies plan to expand these offerings by 2027 to include voluntary benefits.
So, how do you go about designing a benefits package? Read on to learn how to design a comprehensive and diverse package for your employees.
What Are Voluntary Benefits?
Voluntary benefits offer supplemental coverage to employees. As the name suggests, they are voluntary, meaning workers aren't required to choose coverage.
A voluntary benefits package requires additional payments from employees through payroll deductions. Meanwhile, the employer is responsible for the administration costs.
The ACA mandates every employer provides their workers with health insurance. This includes basic medical coverage and may come with ancillary benefits like vision, dental, and pharmaceutical plans.
There are instances, however, when employees need more specific benefits. Many employers recognize the impact these benefits can have on health and well-being. Voluntary benefits can include:
Why Offer Voluntary benefits?
The value of voluntary benefits increased during the pandemic according to a 2021 report from SHRM. 95% of large companies believe voluntary benefits are vital to their benefits programs. The five fastest-growing benefits were:
Further, the SHRM report highlighted voluntary offerings that employers offered at that time or were planning to provide, including:
Voluntary benefits provide your employees with diverse options beyond standard benefits. Meeting personal needs and preferences can create positive repercussions within your organization.
As an employer, here's why you should consider offering voluntary benefits:
How To Design a Voluntary Benefits Package for Your Employees
It’s crucial to design a comprehensive, diverse, and relevant benefits package. This allows employees to get the most out of these value-added benefits.
How do you go about doing so? Here are crucial steps for creating a voluntary benefits package:
Before designing your voluntary benefits package, conduct extensive research through quantitative surveys (listing all potential benefits) or qualitative surveys (focus group discussions). These research methods allow you to uncover:
Tips from the field:
Nicolas Breedlove, CEO at PlaygroundEquipment.com, is a big believer in voluntary benefits for employees. Given the nature of their work, he offers benefits designed to promote physical fitness and occupational safety.
Breedlove says, "Voluntary benefits work best when they reflect the real needs of your team. By listening to employees and understanding their daily challenges, you can offer perks that genuinely improve their well-being and performance. It's about aligning benefits with what matters most to them, not just what's easy to provide."
As an employer, you're responsible for the benefits administration expenses. So, it’s key to offer what employees need and what aligns with your business culture.
Tips from the field:
Leigh McKenzie, Community Advocate at Traffic Think Tank, believes benefits should promote employee welfare and uplift the organization. "Your benefits package should match your company culture and uphold your core values."
McKenzie provided specific examples, including:
Now, it's time to develop your voluntary benefits package, based on what your company values and upholds. Here are key aspects to keep in mind:
Tips from the field:
Adrian Lorga, Founder & President at 617 Boston Movers, recommends conducting a feasibility study of your voluntary benefits package. He suggests focusing on two key attributes: relevancy and efficacy.
Lorga explains, "A feasibility study ensures your voluntary benefits package is both practical and impactful. Focus on whether each offering is truly relevant to your employees and effective in meeting their needs. This way, you're not just adding perks but delivering real value."
Make Open Enrollment Simple and Efficient
Open enrollment is the time of year when employees can enroll in, renew, or modify their benefits.
Tips from the field:
Anna Zhang, Head of Marketing at U7BUY, suggests streamlining your open enrollment. "One of the reasons workers couldn't get voluntary benefits is that open enrollment makes it hard for them."
Zhang has recommendations for effective open enrollment, including:
Does your package truly benefit your employees? Is the package too costly? Can you provide valuable add-ons? Make sure to conduct the two key steps below:
Regularly gather feedback from employees to see if the benefits meet their needs and expectations. Use surveys, participation data, and one-on-one conversations to spot gaps or underused offerings. This ensures your package stays relevant and valuable.
Based on your assessments, you can identify changes to your benefits package. Say there is growing interest in dental benefits, consider making upgrades to what you offer. This would include stronger affordability and access to services like preventive care, orthodontics, and major procedures.
Tips from the field:
Grant Aldrich, Founder of Preppy, says, "Offering voluntary benefits comes with legal and financial obligations that shouldn't be overlooked. Consulting a legal professional ensures your programs comply with regulations and protect both the company and your employees. It's a safeguard that saves you from costly mistakes down the line."
Final Thoughts
Voluntary benefits provide your workforce with options to meet their diverse needs and preferences. They nurture and attract talent, while also promoting engagement and productivity.
Looking to provide your employees with voluntary benefits? Solstice offers affordable and flexible individual and group plans, including dental, vision and life options. To discuss your voluntary benefits options, contact us today!