How Voluntary Benefits Strengthen a Small Business Benefits Package

Key Takeaways

• Voluntary benefits add a layer of protection on top of medical insurance, helping with costs like lost income, hospital stays, and a serious diagnosis.
• Health insurance is the foundation of most small business benefits packages, offered through a group health plan or a CHOICE Arrangement (formerly ICHRA).
• Employees usually pay most or all of the premium for voluntary benefits, so small businesses can expand their package without taking on the full cost.

Medical insurance provides essential protection, but employees may still face out-of-pocket expenses, lost income, and other financial challenges after an accident, illness, or unexpected diagnosis.

Voluntary benefits can provide an additional layer of support. By giving employees access to coverage such as accident, critical illness, hospital indemnity, disability, life, dental, and vision insurance, employers can help them prepare for a wider range of health and financial needs.

Why Voluntary Benefits Matter

Financial concerns can affect an employee’s ability to care for their health and overall well-being. According to Wellhub’s 2025 research, 68% of employees said financial constraints prevented them from investing in their health.

Voluntary benefits can help employees prepare for expenses that may not be fully addressed by medical insurance or an emergency fund. They also give employees more choice, allowing them to select additional coverage based on their personal needs, families, and budgets.

Building a Small Business Benefits Package

Most small business benefits packages start with health insurance, the benefit employees value most. In the 2025 EBRI/Greenwald Workplace Wellness Survey, health insurance was the benefit workers cited most often when deciding whether to stay at a job or leave.

Health insurance is also the most expensive piece of a benefits package. The KFF 2025 Employer Health Benefits Survey found that the average annual premium for family coverage reached $26,993. Only 59% of firms with 10 to 199 workers offer health benefits, compared with 97% of larger firms.

Small businesses have more ways to offer health insurance than they once did. A group health plan gives the whole team shared coverage. A CHOICE Arrangement lets the employer set a monthly allowance that each employee uses to choose their own individual plan. Either one can anchor the package, and the better fit depends on headcount, budget, and how spread out the team is.

Voluntary benefits build on that foundation, letting each employee add the dental, vision, life, or disability coverage that fills the gaps in their own household’s protection.

Options for Benefit Packages

Different voluntary benefits provide different types of support, and a small business can start with one or two and add more as the team grows.

• Accident insurance may pay a cash benefit after a covered injury, such as a broken bone or an emergency room visit, helping with costs a health plan’s deductible leaves behind.
• Critical illness insurance may provide a lump-sum benefit after a covered diagnosis such as cancer, a heart attack, or a stroke. Employees can typically use the money for treatment, travel, or everyday bills while they recover.
• Hospital indemnity insurance may pay a set benefit for a covered hospital admission or each day of a covered stay, on top of what the employee’s health plan pays.
• Disability insurance can replace a portion of an employee’s income when a covered illness or injury prevents them from working. Short-term coverage handles temporary absences, and long-term coverage extends that support through longer recoveries.
• Life insurance can provide financial protection for an employee’s beneficiaries, helping a family keep up with expenses like a mortgage or childcare.
• Dental and vision insurance can help employees manage the cost of routine care like cleanings, eye exams, and glasses, along with treatments such as fillings or crowns that many medical plans don’t cover for adults.

Supporting Recruitment and Retention

Voluntary benefits can also help small businesses build more competitive benefits packages. Decisely’s analysis of client data found that employees with benefits stayed with their employers for an average of 30 months, compared with 14 months for employees without benefits.

Although voluntary benefits alone do not determine retention, they can contribute to a more well-rounded employee experience. Offering employees additional choices can demonstrate that an employer understands and supports their health, financial security, and individual needs.

Employees with benefits stayed an average of 30 months, compared with 14 months for employees without benefits.

Flexible Options for Small Businesses

Many voluntary benefits are employee-paid, allowing employers to expand their offerings without taking on the full cost of coverage. Depending on the carrier and plan, options may include group rates, simplified enrollment, guaranteed issue coverage up to certain limits, and participation requirements designed for smaller teams.

Because costs, eligibility rules, and plan provisions vary, an experienced benefits partner can help employers compare their options and determine what fits their workforce.

Decisely helps small businesses explore voluntary benefits, manage enrollment, and give employees the information they need to make informed coverage decisions.

Ready to expand your benefits package? Talk with Decisely about the voluntary benefit options available for your business.