Voluntary Benefits
This article covers meaning & overview of Voluntary Benefits from HRM perspective.
What is Voluntary Benefits?
Voluntary benefits are those insurance products that an employee can purchase from the employer at rates lesser than those available in the market. The different types of insurance covered under voluntary benefits include dental, cancer, vision etc.
A diverse, multi-generational workforce and a growing desire for benefit choices mean today's employers find it difficult to evolve a benefit plan to the satisfaction of all the employees.
Not all the employees have the willingness to opt for these insurance schemes. As a result, the employer makes it voluntary for them. However since the employer can bundle up many such requests, it can command better rates from the insurance provider and thus is able to offer these schemes to the employees at the rates lesser than what each of them would have paid individually.
Voluntary benefits to employees act as a great incentive for people to stay with the company. Offering voluntary benefits provides the opportunity to lower the company’s payroll taxes with each enrolled employee.
Thus it is a win-win situation for all the stakeholders to have voluntary benefits included in the plan.
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