In previous years, employers offered voluntary benefits to retain employees, attract strong candidates and boost morale. They weren’t as popular as they are now. Since there has been significant growth in economic pressures, most employers want to use these benefits because the plans have no direct costs for them. However, employers’ costs aren’t the only benefit. Many employers offer these benefits because their employees are able to afford them. The same employees may not be able to afford similar benefits on their own.
Advantages of offering voluntary benefits include:
1. Desired Benefits
Employees usually ask prospective employers about disability, life, health and dental benefits. It’s always beneficial to be able to offer good prospective employees the benefits they desire.
2. No Employer Expenses
The only thing better than being able to offer employees the benefits they desire is being able to do so without paying much. The payroll tax savings gained from Section 125 offsets the administrative costs that are often associated with voluntary benefits.
3. Group Rates
Since the rates are calculated for a group, individual costs for employees are lower. This means that employees are able to enjoy the same great benefits they desire for an affordable cost. Employees enjoy the benefit of paying less upfront for costly medical procedures or illnesses. If a serious illness or accident occurs, plan members receive cash benefits. These benefits may be used for groceries, travel, living expenses or other expenses related to the medical issue.
4. Lower Employee Turnover Rates
Employers who offer better benefit packages to their employees enjoy a low turnover rate. Good benefit choices also attract good prospective employees. When employment levels are high, it’s essential for employers to have the best benefit offerings to attract the best job candidates.
5. No Secondary Market
Some of the best programs are only offered in plans that are sponsored by employers. This aspect is also more attractive to prospective employees because they can’t obtain the same insurance coverage without working for the employer who offers it.
6. Fosters Goodwill
Employees appreciate employers who show that they care enough to offer good benefit options. This shows employees that the employer cares about their individual needs and the needs of their families.
7. Good Underwriting
Most individuals are not able to find life or disability coverage on their own. This is especially true for individuals who have a medical history that is not favorable. Voluntary benefit plans have simple underwriting requirements. They are also guaranteed without any health questions.
As business owners seek better ways to manage healthcare expenses, they also seek more flexible benefit choices. In addition to reducing costs to employers, voluntary benefit plans reduce FICA contributions. Whether employers offer indemnity, discount or insurance, voluntary benefits are the best choice for employee relations, employee retention and company savings.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.