Recent trends in employee benefits have shown that employees prefer to have choice and customization options. The question is: can employers offer this without breaking the bank?
The answer is yes! Optional Benefits are a simple and affordable way for employers to offer different benefit options and attract top talent.
This blog post will explain everything that you should know about optional benefits, so you understand how great they are for businesses of all kinds.
What Is The Difference between Optional Benefits and Voluntary Benefits?
Optional Benefits are products which are offered by insurance carriers to their current employer clients and allow employees to build additional coverage onto a product in an existing group-sponsored plan.
e.g. Life, Accidental Death & Dismemberment, Critical Illness
Voluntary Benefits are products which can be offered by a carrier directly to employees. This provides insurable coverage that is not dependent on the products in an existing group-sponsored plan.
e.g. Boxx Cyber Insurance
In simplest terms, Voluntary and Optional benefits are both additional insurance coverages that you can choose to purchase to enhance your overall benefits package on the Simply Benefits Marketplace. Voluntary Benefit premiums are paid directly by you using the banking information you provided, while Optional Benefits are paid through payroll deduction (you have to be a part of a group-sponsored plan to purchase these benefits).
What Are Optional Benefits?
Optional Benefits are supplemental benefits that employers can offer their employees.
These benefits are not a requirement, but rather an option that employees can opt into. Employees can choose to pay for these extra benefits depending on their preferences and needs.
Employers will often save money this way because optional coverage is paid either fully or partially by the employee.
Examples of Optional Employee Benefits
There are a lot of options for Optional benefits. For example, pet insurance as a voluntary benefit has become very popular over the past few years, with 23% of employees saying they would use it if it was an option.
Other popular voluntary benefits include:
- Critical Illness
- Permanent Life Insurance
- Home and Auto Insurance
- Long-term or elder care
How Do They Work?
In almost all cases, Optional Benefits are paid for by the employee rather than the employer. The employer chooses which voluntary benefits to offer and then takes care of the administration of the benefits.
The money paid for the benefit is usually deducted from the employee’s salary. However, even though the employee is paying for the benefits, they are typically being offered group rates that they wouldn’t be able to get on their own.
Because of this, Optional Benefits work great for small businesses that want to provide benefits they wouldn’t normally be able to afford. Their employees can be covered in the ways that they need, and the employer doesn’t break the bank.
Here is an example. A company wants to provide life insurance but can’t afford to offer it to every one of their employees. The company can choose to offer life insurance as an optional benefit. Employees who want life insurance can choose to include life insurance in their plan and pay for it out of pocket, but it’s not required.
Rise in Popularity
Options and flexibility in benefits plans are sought after by younger workers. Generation Y (millennials) and Generation Z make up almost half of the workforce as of 2021.
The needs of these generations differ greatly from the ones that came before them. They usually don’t prefer traditional plans that offer blanket coverage that they will never use.
Instead, Optional Benefits can add customization to an employee benefit plan by providing different options for employers to consider. Younger employees are appreciating these kinds of benefits more and more.
If you want to attract top talent from the younger generations, Optional Benefits are a great and affordable way to do it.
Why You Should Offer Them
Optional Benefits are beneficial to both employers and employees.
Employees receive supplemental in-demand benefits and extended coverage at a good rate, and employers can offer customization and options at a low cost.
By offering Optional Benefits, employers will potentially notice other advantages such as:
- An increase in workforce productivity
- Employee satisfaction
- Employee retention
- Attracting top talent in younger generations
Final Thoughts
Optional benefits are a great way for employers to offer supplemental benefits to their employees at little or no cost. We hope this blog answered all your questions about voluntary benefits.
If you want to find out more about our platform and how you can offer voluntary benefits in your plan, reach out to a member of our sales team at sales@simplybenefits.ca.
Additional Resources
References
Benefits Canada. “Voluntary Benefits an Emerging Option for Employers”, January 18, 2020. https://www.benefitscanada.com/benefits/health-benefits/voluntary-benefits-suit-shift-in-workplace-demographics-77244
Sanofi-Aventis Canada Inc. “The Sanofi Canada Healthcare Survey; Future Forward Frontline Perspectives on the Future of Health Benefit”, January 18, 2020. https://www.sanofi.ca/-/media/Project/One-Sanofi-Web/Websites/North-America/Sanofi-CA/Home/en/Products-and-Resources/sanofi-canada-health-survey/sanofi-canada-healthcare-survey-2020-EN.pdf
