The pandemic, the grim economy, and the stress of remote work have made employees' physical, mental, and financial well-being more important than ever. At the same time, bosses are trying to meet their employees' needs on a tighter budget. One solution? Voluntary benefits.
They're not as sexy as onsite gyms and free lunches, and the term is a bit of a misnomer. It typically refers to insurance products (separate from health coverage) that workers can buy at lower group rates via payroll deductions. But it can also apply to benefits that are funded all or in part by employers.
Voluntary benefits cover familiar things, like long-term disability care, and novel ones, like legal services, identity theft protection, financial counseling, and veterinary bills. Keep in mind that voluntary benefits are just one piece of a company's benefits puzzle, and are no substitute for solid health coverage. And offering a new benefit without footing the bill might not come across as particularly generous. But employees appreciate getting insurance cheaper and more conveniently than they could on their own, and these benefits can provide peace of mind by filling coverage gaps and reducing out-of-pocket costs. (One increasingly popular benefit is hospital indemnity insurance, which pays the employee a certain amount for each day of a hospital stay.) Read on for a guide to getting started.
Do your research.
Add only those benefits your team will actually use. "Don't add benefits just to say you're adding benefits," says Nyala Khan, head of talent at Eden Health, a New York City-based health care startup whose employee-paid plans include pet insurance and several kinds of supplemental health coverage.
Most people try not to think about insurance until they need to, so a simple poll might not tell you much. But you can hire a consultant to analyze demographic information and aggregated data on employees' financial health, says Amy Hollis, an Atlanta-based benefits consultant. This can tell you what they might need while protecting privacy. For example, older workers might want critical-illness insurance, while new parents might prefer prepaid legal plans to get help drafting a will. If some of your workers are struggling financially, you could add a program that offers budgeting help or low-interest loans.
Look for gaps in your benefits that supplemental coverage can fill. But don't try to meet everyone's needs at once. Heather Garbers, vice president of voluntary benefits at insurance broker Hub International, recommends adding no more than three benefits a year, so employees can become familiar with them. And don't expand your benefits menu endlessly, says Hollis. Keep an eye on what employees enroll in--and use--and add or drop benefits as needed.
Workers can't use benefits they don't know about, so make sure they do--and not just during open enrollment. Send updates on what's available, and engage employees online; the days of paper packets and conference room Q&As are over.
Above all, provide your employees with clear and accessible information. Khan recommends using case studies to show how a benefit works in real life. If you don't have an HR department to explain, bring in a consultant, Garbers advises. If your broker or carrier offers educational resources, use them. Dani McCauley, a senior vice president at consulting firm Aon, suggests moving your open enrollment to a non-standard time, when carriers are more likely to give you personal attention.
Make enrollment easy.
Your benefits system should be easy to navigate and show employees all their options, says Hollis. Otherwise, "it's like you're in a grocery store, and you don't know what's down the last aisle," she says.
Some voluntary benefits, such as pet insurance, are worth offering year round. But supplemental health benefits should be available alongside basic health insurance during open enrollment. McCauley recommends creating a logical "sequence and flow" that starts with core benefits and proceeds to voluntary plans. This will help employees choose what they need without overspending. "When the employee enrolls in their major medical," she says, "the very next benefit they should enroll in is anything that covers the out-of-pocket gaps associated with the plan they just bought."