Voluntary benefits - a simple guide

Here's all you need to know about a voluntary benefits plan and what it can do for your employees and your business.

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What are voluntary benefits?

Sometimes called supplemental insurance or employee-paid benefits, voluntary benefits are offered by the employer through the workplace where employees can choose to buy them in addition to the core employee benefits they may get as part of a benefits package.

You can offer voluntary benefits to your employees at no direct cost to you. And, contrary to popular belief, you don’t need to be a big company to offer them — some plans require an employer to have a minimum of just three to five employees to qualify. Here’s all you need to know about a voluntary benefits plan and what it can do for your employees and your business.

Payment options are typically flexible. To suit their budget, companies can choose whether voluntary employee benefits are:

  • Fully employee-funded
  • Partially-funded by both employee and employer

What voluntary benefits are available?

There’s a huge range of voluntary benefit plans out there in the market. Some examples include disability insurance, accident insurance, dental insurance or "softer" benefits that may include retail or ticket discounts, gym memberships or concierge services like collecting dry cleaning.
  • crutches icon
    Accident insurance
  • ribbon icon
    Cancer insurance
  • heart monitor icon
    Critical illness insurance
  • tooth brush icon
    Dental insurance
  • wheel chair icon
    Disability insurance
  • bed icon
    Hospital indemnity insurance
  • leaf icon
    Life insurance
  • glasses icon
    Vision insurance

How businesses and employees benefit

Adding voluntary benefits to your compensation package supports your business in multiple ways. 
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Benefits to the business

  • Enrich benefits package without adding to your bottom line
  • Help control rising health care costs
  • Attract and retain top talent

Benefits to the employees

  • No or low cost
  • Valuable coverage at affordable rates
  • Helps fill in gaps in major medical coverage
  • Flexible benefit options

Busting the myths — why small businesses don't offer voluntary benefits

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Myth 1: Affordability

Many small businesses may believe they can’t afford to pay for voluntary benefits, even if they see the positives in offering them.

Voluntary employee benefits can be partially-funded or even fully-funded by the employee. It means that the company has complete control on how much they decide to spend and what options they choose to add.

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Myth 2: Not enough employees to qualify

While it does depend on the carrier and the product, many voluntary benefits are available to businesses with single-figure numbers of staff, and some have no minimum requirements.
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Myth 3: Administering a voluntary benefits plan is costly and complex 

Certain benefits provide tax advantages and are tax-deductible. Some can be paid for through payroll deduction. Many qualified carriers will be pleased to help with education of employees and can provide easy enrollment and administration, usually at no direct cost allowing the employer to get on with running their business.

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Myth: Employees don't value it

This misperception often stems from employers themselves. While most employers believe employees value take-home pay over benefits, employees actually value nonmedical insurance benefits and voluntary benefits more than employers realize.

Frequently asked questions

Got a question about voluntary benefits? Here are some frequently asked questions to help you.

Who can get voluntary benefits?

Administration and costs

Health care and voluntary benefits

How to get voluntary benefits

Voluntary benefits — a simple guide

This guide breaks down the common types of voluntary benefits that employees want and need, and how to use them to build a comprehensive benefits plan that will help attract and retain workers.