Required vs. Voluntary Benefits: What To Know
Benefits are a typically overwhelming topic that many executives would prefer to avoid, but are one of the most important aspects in attracting and retaining top talent. Learning and understanding the ins and outs of the benefits that work for your company takes time and knowing where to go for the right resources. Here is a quick breakdown of required vs. voluntary benefits, and what you need to know about each. Providing excellent benefits is extremely important to the success of your business. Learn more below:
Required Benefits
Required Benefits are provided by the state or federal government, and are mandatory under law. Here are the main Required Benefits and how they can be distinguished from voluntary benefits:
Social security
Social security tax and withholding is known as a payroll tax, meaning the employer will deduct half of the tax from their employee’s paycheck, and contribute the other half of the tax. These transactions are reflected in the W2 form and paychecks, and sent to the IRS.
Workers compensation
Workers compensation protects employees who might miss work because of illness or injury they receive while executing duties at their job. This compensation reimburses the employees for their trouble, and also covers any possible medical bills.
Unemployment insurance
If an employee is laid off due to company circumstances outside of their culture, such as downsizing the company, rebranding, etc., they can apply for unemployment insurance. Once signed up, they can receive income for up to 26 weeks.
Family and medical leave
The Family and Medical Leave Act requires companies with 50 employees or more to provide workers with job-protected and unpaid leave for specific medical and family issues. A few qualified medical and family reasons include: family military leave, pregnancy, adoption, and personal or family illness.
Voluntary Benefits
Voluntary benefits are not required. These benefits are decided on by the individual businesses and corporations that can outline specifically what and how much of the voluntary benefits they offer. They are often paid through employees’ payroll deferral. Here are some of the most popular voluntary benefits companies offer:
Dental Insurance
Approximately 80 percent of employers offer dental insurance. Dental care directly affects other parts of the employee’s health, including potential for diabetes, blindness, heart disease, etc. Therefore, it is in the employer’s best interest to help maintain employee’s dental care.
Vision Insurance
Vision coverage is also very important to overall health. Employers recognize that employees may need healthy eyesight in their field, and to help maintain that as much as possible. Approximately 84 percent of employers provide vision voluntary benefits.
Accident Insurance
Many companies offer voluntary accident insurance as a way to offset potential medical expenses that may come after an accident occurs. This insurance is often implemented with the idea “better safe than sorry,” and corporations are slowly moving to add this to their voluntary benefits.
Life Insurance
Approximately 94 percent of companies surveyed offer voluntary life insurance. Life insurance provides beneficiary funds in case the employer dies. Typically, an employee will pay a monthly premium in order to cover life insurance.
Disability
According to the Social Security Administration, approximately 30 percent of people will suffer from a disability of three months or longer during their working life. Disability insurance insures an employee’s earned income in case a disability makes it more difficult for a worker to complete their tasks.
Create an environment where your people thrive and your business performance skyrockets. We’d love to hear what innovative benefits you are providing to your workforce. Share your ideas with us, and we’ll include them in our post. When humans thrive, companies prosper. Learn more at Beni.fit.