Poor Health Insurance Literacy Hurting Your Employees, Your Bottom Line
June 10, 2025
Voluntary benefits have emerged as a key differentiator for small businesses looking to stay competitive in attracting and retaining employees. These benefits, which are offered in addition to group health insurance and 401(k) plans, allow employees to opt in to coverage that fits their unique needs, often with little or no cost to the employer.
While larger companies have long embraced these options, small employers are increasingly seeing the value in building voluntary benefit programs that reflect the makeup and priorities of their workforce.
For small businesses that may not be able to afford rich employer-funded benefits, voluntary offerings help level the playing field. They increase employee satisfaction and improve recruitment, especially when competitors already provide these options.
What are voluntary benefits?
Voluntary benefits are supplemental insurance and service options that employers make available to their staff. Employees choose which benefits they want and typically pay the premiums through a payroll deduction. Some employers contribute a portion of the cost, but it’s not required.
Examples of voluntary benefits include:
- Dental and vision insurance
- Critical illness and cancer insurance
- Hospital indemnity coverage
- Accident insurance
- Life and disability insurance
- Legal assistance plans
- Identity theft protection
- Long-term care coverage
- Pet insurance
- Wellness benefits, caregiving support and fitness memberships
Why voluntary benefits matter
There is wide support for voluntary benefits among American workers. In fact, studies show:
- More than three-quarters of employees say they are more likely to work for an employer that offers voluntary benefits.
- Most small businesses with 10 to 49 employees now offer at least one voluntary benefit.
- Nearly 70% of businesses with 50 to 99 employees offer several voluntary benefit options.
- Employees report strong interest in products like critical illness, cancer, hospital indemnity and identity theft protection — even when they are not already enrolled in them.
However, priorities may vary depending on the age of your employees. If your workplace is like many others, you have multiple generations working together. Consider that:
- Gen Z may seek mental health support and pet insurance,
- Millennials might prioritize family building benefits or debt relief,
- Gen X may be focused on caregiving and long-term care insurance, while
- Baby Boomers may be most interested in discounts on health services or disability insurance.
Choosing benefits for your team
Adding voluntary benefits doesn’t have to be overwhelming. A thoughtful approach will ensure your offerings align with your employees’ needs and your business goals.
In addition to working with us, here are some practical steps small employers can take:
- Poll your team early: At least six months before your annual open enrollment, survey employees to find out which voluntary benefits they value most. This helps you choose offerings that will see the most uptake.
- Start small, then expand: Begin with a few high-demand options like dental, vision or accident insurance. You can add more over time based on your budget and employee interest.
- Think generationally: Consider what different age groups might prioritize.
- Work with a broker or advisor: We can guide you through the process, help manage administration and educate your employees on how to take advantage of these benefits.
- Communicate regularly: Don’t assume your team knows what’s available. Use e-mails, posters and meetings to highlight benefits and remind them of enrollment deadlines.
- Make enrollment easy: Choose a carrier with online enrollment and mobile access to increase participation and reduce your administrative burden.
Offering voluntary benefits isn’t just about checking a box. It’s about showing your team you understand and support their full lives. That can pay off in loyalty, morale and long-term retention.
