From traditional benefits like life insurance and vision care to trendier offerings such as insurance to cover pets or protect against identity theft, voluntary benefits can serve as a cost-effective method to attract and retain workers.
Voluntary benefits are administered by the employer and paid for by workers, who in turn receive group rates or discounted services. Because employees are bearing most of the costs, employers can bolster their offerings to meet diverse worker needs while maintaining lower costs.
The International Foundation’s 2022 Employee Benefits Survey Report provides benchmarking data on a wide variety of voluntary offerings, including life insurance, accident insurance, vision insurance, short- and long-term disability benefits, and more. This article reflects the survey responses received from corporate and public employee organizations.
As of 2022, about nine in ten (90%) responding organizations offered at least one voluntary benefit, a slight increase from the 2020 iteration of the study (87%). In addition, larger employers (those with 500 or more workers) are more likely to offer at least one voluntary benefit (97%) compared with smaller organizations (82%). Following is a look at which benefits are offered most frequently and how that has changed over time. Also discussed are additional factors that determine the prevalence of these offerings and the role these benefits play in driving organization success.
Life Insurance Benefits
- The most commonly offered voluntary benefit is life insurance for either workers or their dependents (74%), a slight increase from the 2020 edition of the survey (67%).
- More than one-half (54%) of responding organizations offer accident insurance as a voluntary benefit. This offering, which protects against loss by accidental bodily injury, has remained at a consistent level of prevalence compared to 2020 (52%).
Critical Illness Insurance
- Critical illness insurance is an offering in which an insurer agrees to make a payment to policyholders if they are diagnosed with a specific condition such as cancer, heart attack, stroke, Alzheimer’s disease, kidney failure or disability as well as for policyholders who need an organ transplant. Payment is typically a lump-sum cash amount stated in the policy. More than one-half (52%) of responding organizations offer critical illness insurance as a voluntary benefit. Like other offerings, larger organizations (62%) are more likely than their smaller counterparts (49%) to provide this benefit.
- Vision insurance typically provides coverage for glasses, contact lenses and preventive vision screenings. One-half (49%) of responding organizations offer vision insurance on a voluntary basis, a slight increase from 2020 when 45% of respondents offered it as a voluntary benefit. Larger organizations (63%) are more likely than smaller organizations (47%) to offer vision insurance on a voluntary basis.
- About three in ten responding organizations offer long-term (33%) and short-term (29%) disability coverage as a voluntary benefit. This coverage entails periodic payments when a person is unable to perform the duties of their occupation due to illness, injury or disease. Larger organizations are more likely to offer long-term disability coverage as a voluntary benefit, while both short- and long-term disability insurance are more commonly offered as standard, employer-paid benefits.
Legal Services Plan
- Like disability coverage, about one in three (34%) responding organizations offer legal services plans as a voluntary, “worker-pay-all” offering. These plans typically provide convenient and affordable legal assistance for services such as legal advice, drafting of wills and house closings. Larger organizations (60%) are far more likely than smaller ones (29%) to offer legal services plans as a voluntary benefit.
Identity Theft Insurance
- Employers are increasingly looking at identity theft insurance protection as an important line of defense against potential data breaches. Identity theft insurance often offers access to identity theft counselors and monitoring tools/alerts as well as reimbursement for stolen funds and even expenses such as legal fees and lost wages. Similar proportions offer this benefit as a voluntary (33%) or standard, employer-paid offering (34%), with both offerings seeing substantial growth over the past two years. Like other voluntary offerings, larger organizations (56%) are more likely than smaller ones (28%) to offer identity theft insurance on a voluntary basis.
Hospital Indemnity Insurance
- More than one in four responding organizations (29%) offers hospital indemnity insurance as a voluntary benefit. During hospitalization, this supplementary insurance pays for benefits that may not be covered by standard health insurance. This typically includes payments for hospital admissions, copays, deductibles and inpatient rehabilitation expenses. Only 24% of respondents offered this benefit as a voluntary offering in the 2020 edition of the survey.
- More than one in three (34%) organizations offers pet insurance as a voluntary benefit, an increase from 24% in the 2020 iteration of the survey. These plans provide coverage for routine veterinary visits like check-ups and vaccinations as well as coverage for potential accidents. Unsurprisingly, larger organizations are more likely to offer pet insurance than their smaller counterparts (50% compared with 30%).
- While far more commonly offered as an employer-paid benefit, about one in four (24%) responding organizations offers dental insurance as a voluntary benefit.
Long-Term Care Insurance
- One in six (16%) responding organizations offers long-term care insurance as a voluntary benefit. This insurance covers the costs associated with long-term care at home or in a residential facility for those who are unable to take care of themselves. Less than one in ten (8%) offers long-term care insurance as an employer-paid benefit.
- About one in seven (14%) responding organizations offer homeowners insurance as a voluntary offering, while 12% offer it as an employer-paid benefit.
- About one in eight respondents offer automobile insurance as a voluntary offering, a benefit more commonly offered by 13% of responding organizations. About one third (31%) of employers with more than 500 workers offer this benefit.
Student Loan Repayment Assistance
- For the first time, the Employee Benefits Survey asked about the prevalence of student loan repayment assistance. While only 5% of respondents offer repayment assistance as an employee-pay-all benefit, 9% offer it as an employer-funded option.
The Role of Voluntary Benefits in Organization Success
Respondents to the Employee Benefits Survey were also asked a series of questions about the role their benefit offerings play in organization success measures.
Ability to Attract and Retain Workers
- Organizations that stated they were successful in their attraction and retention efforts were more likely to offer a variety of voluntary benefits, including access to legal services plans (36% compared with 30%) and long-term care insurance (18% compared with 10%).
Impact of Engagement and Productivity
- Respondents were also asked to rate their benefit offerings in relation to spurring worker engagement and productivity. Organizations that said their offerings had a positive impact on engagement and productivity are more likely to offer vision insurance (50% vs 42%), legal services plans (37% compared to 23%), pet insurance (35% vs. 27%) and dental insurance (25% compared to 17%). There were also substantial differences in the number of respondents offering long-term care insurance (18% vs 8%), automobile insurance (15% compared to 6%) and homeowners’ insurance (13% vs. 6%) on a voluntary basis.
Justin Held, CEBS
Associate Director, Research & Education
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