A Guide to Voluntary Employee Benefits

Key Takeaways

• Voluntary benefits are optional add-ons to a core health plan, such as dental, vision, life, accident, and disability coverage, paid through payroll deduction. 
• Employees of Decisely clients can enroll with no medical questions even with as few as 2 enrolled.
• Employees, not employers, typically cover most or all of the premium cost, which means adding voluntary benefits rarely adds meaningful expense to a company’s benefits budget.
• Voluntary benefits fill the gaps a group health plan or ICHRA leaves open, covering costs like a broken bone, a cancer diagnosis, or a hospital stay that major medical insurance doesn’t fully absorb.
• Franchise operators, small business owners, and HR teams use voluntary benefits to compete for talent without taking on the cost or complexity of expanding core health coverage.

What Are Voluntary Employee Benefits?

Voluntary employee benefits are supplemental insurance products that employees choose to add on top of whatever health coverage their employer already provides. Common categories include dental, vision, life insurance, accident coverage, critical illness coverage, hospital indemnity coverage, and short- and long-term disability income protection.

“Voluntary” means the employee chooses to opt in, whether or not the employer chips in toward the cost. An employer makes these benefits available and an employee decides which ones fit their situation, then usually covers the premium through a payroll deduction. Some employers contribute toward the cost as a recruiting or retention tool, but the core structure is opt-in and employee-funded.

This is different from a group health plan or an ICHRA, which handle major medical expenses like doctor visits, hospital stays, and prescriptions. Voluntary benefits sit beside that core coverage, addressing specific costs and risks that a health plan alone doesn’t cover.

How Voluntary Benefits Work

Enrollment and Payroll Deduction

Employees typically select voluntary benefits during a company’s open enrollment period or when they’re first hired. Once they enroll, the premium comes out of their paycheck, either pre-tax or post-tax depending on the benefit type. An employee can usually adjust or drop coverage at the next open enrollment, or sooner if they experience a qualifying life event like marriage or the birth of a child.

Underwriting and Eligibility

One of the most practical advantages of voluntary benefits is how little most employees have to do to qualify. Decisely’s carrier partners offer guaranteed-issue coverage during the initial open enrollment period, as well as for new hires who enroll during their first eligibility window. This means no health questions and no waiting period tied to a medical exam. Employees who enroll later, outside that initial window, may face some underwriting depending on the benefit and the carrier. With that in mind, timing enrollment around a new hire’s start date matters.

Common Types of Voluntary Benefits

• Dental coverage helps pay for cleanings, checkups, and more complex procedures like crowns or root canals, which most major medical plans exclude entirely.
• Vision coverage covers eye exams, glasses, and contact lenses, expenses that fall outside standard health insurance.
• Life insurance provides a payout to an employee’s family if they die while covered, and is available through Decisely at group rates lower than an individual policy.
• Accident coverage pays a cash benefit when an employee is injured in a covered accident, helping offset costs like emergency room visits or physical therapy that a health plan’s deductible doesn’t touch.
• Critical illness coverage pays a lump sum if an employee is diagnosed with a covered condition, such as cancer or a heart attack, which they can use for treatment costs, travel, or lost income.
• Hospital indemnity coverage provides additional cash for each day of a covered hospital stay, on top of whatever the employee’s health plan pays.
• Short-term disability coverage replaces a portion of an employee’s income during a temporary absence from work due to illness or injury.
• Long-term disability coverage picks up where short-term coverage leaves off, replacing income when a health condition keeps someone out of work for a longer stretch. 

Who Voluntary Benefits Are For

Voluntary benefits work well for small business owners who want to build a more competitive benefits package without expanding what they pay for directly. Franchise operators and association members can use them to match the kind of coverage larger competitors offer, since group rates and guaranteed-issue enrollment don’t require enterprise-scale headcount. HR professionals managing benefits at a small or mid-size company can add this extra layer of protection without taking on a second vendor relationship, since the plans run through the same platform as the core health coverage.

Independent contractors and 1099 workers exploring individual coverage can also access some voluntary benefits, such as life insurance and accident coverage, independent of an employer-sponsored group plan.

What Voluntary Benefits Cost

Because employees fund most or all of the premium themselves, a business can typically add voluntary benefits to its offering without a significant new line item in its budget. The main cost to the employer is usually administrative rather than financial: setting up payroll deductions, communicating the options during enrollment, and keeping the offering current from year to year.

Employee premiums vary by benefit type, coverage amount, and age, but they tend to be lower than what an individual would pay for a comparable policy outside a group, since group purchasing brings the rate down. Some employers choose to subsidize part of the premium for one or two categories, most often life insurance, as a way to guarantee baseline coverage for the whole team without asking every employee to opt in.

Voluntary Benefits vs. Group Health Plans and ICHRA

Adding voluntary benefits doesn’t mean choosing between them and a core health plan, and it doesn’t mean waiting until that plan has been around for a while. A company just starting its first group health plan can offer voluntary benefits from day one, since those categories skip the underwriting and minimum-participation requirements that sometimes apply to group medical coverage. A business with an established plan or ICHRA already in place can add voluntary benefits at any renewal cycle as its team grows or its competitive landscape shifts. Either way, the two run side by side rather than one replacing the other. 

Getting Started with Voluntary Benefits

Adding voluntary benefits to an existing offering usually comes down to a few core steps.

• Look at what your workforce needs, weighing factors like average employee age, family status, and the kinds of gaps your current coverage leaves open.
• Choose which categories to offer based on that assessment. Dental and vision remain high-participation staples, but categories like accident, critical illness, and disability carry just as much weight today, especially as employees look for more financial protection. 
• Communicate the options clearly during enrollment, utilizing education pieces from Decisely so employees understand what each benefit covers and what it costs them per pay period.

The right mix depends on your workforce and what your current coverage already handles, which is worth working through with a benefits advisor rather than sorting it out alone.

Decisely is built to handle that conversation end to end rather than pointing you toward a separate carrier search. The same licensed, US-based benefits team that sets up your group health plan, ICHRA, or CoreChoice option also handles voluntary benefits selection and enrollment, all on the same platform as your core health and compliance solutions with no second system or a new point of contact. Decisely has helped thousands of small businesses add coverage this way, with no medical underwriting in the first year of a new group and industry-specific guidance across sectors. 

Reach out to Decisely to talk through which voluntary benefit categories are available to your team, alongside whichever coverage you already have in place.