4 Common Voluntary Healthcare BenefitsMarch 13, 2014
Knowing which benefits are the most common can help companies attract and retain the best talent available.
Voluntary benefits are playing an increasingly important role in the compensation strategies of employers and organizations. Knowing which benefits are the most common can help companies attract and retain the best talent available.
With healthcare costs rising, employers can help their employees select the most helpful/useful benefits that fit their needs. Below are a few of the most common voluntary benefits employers have begun offering their employees.
1. Accident/critical illness insurance
Amid the changing health care environment, companies can potentially both boost their profitability and also help to make their employees more loyal by offering key benefits like accident and critical illness insurance.
When employees lack this type of protection, they can end up having to pay rather substantial expenses in the event that they are involved in an accident or suffer a critical illness. These high costs can come both in the form of lost income due to time spent recovering, and also paying for their healthcare costs out of their own pocket.
Providing employees with both accident and critical illness insurance may be even more helpful before the employer mandate of the Patient Protection and Affordable Care Act goes into effect in 2015. Once this provision is adopted, individuals could face greater uncertainty in terms of the out-of-pocket expenses they will be need to pay as a result of filing a medical claim.
2. Flexible Spending Accounts
Another crucial benefit type that can be used to provide employees with a benefits package are flexible spending accounts (FSA). These savings vehicles can be used to help account holders manage their health care costs more effectively, as they can be used to pay for out-of-pocket expenses.
FSAs can cover a wide range of medical expenses, including equipment such as blood sugar test kits, crutches, bandages and other supplies. In addition, the funds contained in these accounts can be used to for deductibles, co-payments and certain medications.
One interesting perk of these accounts is that they are voluntary and employees can choose whether or not they would like to participate in such a program. Because of this, a FSA can help individuals become more proactive about managing their health care expenses. The funds placed into one of these FSAs are deducted from the total tax burden of the participant, and then he or she is generally required to use the monies within the year.
Employers have the option to provide their workers with some flexibility by allowing them to either carry $500 of their balance into the next year, or giving them another 2.5 months to use the funds.
3. Disability Insurance
Companies can help their employees manage the risk of suffering some disabling illness or event by offering both short- and long-term disability insurance. Employers might be wise to offer coverage for such potential problems, as the Social Security Administration has warned that during their working years, many people will encounter some form of disability.
Such a situation could prevent a person from working over either a short or long time frame, which could create key problems for both for the employee and the employer.
4. Employee Assistance Programs
These particular programs are voluntary, work-based programs that offer free and confidential assessments, short-term counseling, referrals, and follow-up services to employees. They are most commonly used by organizations to prevent and cope with workplace violence, trauma or any other type of emergency response situations.
Not only do employees look to their workplaces to help them maintain their wellness, physically and mentally, offering an assistance program can demonstrate to your employees that you care about their well-being. These programs can also potentially derive financial benefits from combining these programs with other benefits such as short- and long-term disability insurance and less time out of work.
Key points to consider
Companies that are looking to provide their employees with compelling benefit packages that will allow them to attract and retain the best possible talent can benefit from considering providing the following voluntary benefits:
- Accident/critical illness insurance - to help manage the risk that employees will incur large out-of-pocket expenses for their health care.
- Flexible Spending Accounts - to provide workers with tax benefits and also an incentive structure that motivates them to only contribute funds they will use.
- Disability insurance – to help employees to avoid incurring substantial out-of-pocket expenses if unable to work.
- Employee Assistance Programs –to provide employees a way to maintain their physical and mental wellness.