Voluntary Benefits | Meaning and Definition

What are Voluntary Benefits?

Voluntary benefits refer to employee benefits that are paid for by the employee instead of the employer. However, the cost of administration of the scheme is compensated by the employer only. To meet the voluntary benefits, deductions are taken from the salary of the employees to preserve the simplicity of the process. These benefits are typically provided by the third-party employment benefits provider. Voluntary benefits enable employers to furnish employees with a larger package of choices, however, without the charges related to the provision of paid-for advantages.

Voluntary benefits are discretionary employment benefits. They are also known as supplemental benefits and have mushroomed with the accessibility of new types of employment perks and high-deductible health insurance plans. Availing employees of diverse voluntary benefits is deemed a key HR strategy used by organizations to hire and retain employees. Nowadays, full-coverage medical insurance schemes are becoming expensive consistently. Thus, employers are giving a thought to customized voluntary benefits that suit the needs of their employees.

The critical role of technology can not be bypassed in providing voluntary benefits to employees. They can be delivered on different software platforms which can effectively serve organizations, no matter their size, and also facilitate online enrolment of employees to voluntary benefits schemes.

Some voluntary benefits examples include:

•   Pet insurance
•   Financial counseling
•   Student loan repayment
•   Personal travel insurance
•   Legal services
•   Long-term care insurance
•   Hospital indemnity insurance
•   Retail discounts
•   Corporate wellness programs
•   Concierge services like errand assistance and shopping

These voluntary benefits are provided in addition to typical voluntary benefits like critical illness, accident and life insurance, dental insurance, and so on.