Voluntary Benefits 101 for Employers: What Employees Actually Use (Not Just What Sounds Good)

Offering voluntary benefits can be a great way to support your employees and improve retention, but not all benefits are created equal. Some look great on paper, while others actually get used and appreciated by employees in meaningful ways.

If you’re an employer considering voluntary benefits, here’s what you need to know to make smart, impactful choices.

What Are Voluntary Benefits?

Voluntary benefits are employee benefits that complement core health coverage. They are flexible and can be fully paid by the employee, partially subsidized by the employer, or fully paid by the employer.

Employers have three common funding options and reasons they might choose each:

1. Employer-Fully Paid

• The employer covers the full cost of one or two specific benefits, usually high-impact plans like basic life insurance or short-term disability.

• Why choose this option:

  • Provides a baseline level of protection for all eligible employees at no cost to them

  • Can be a strong recruiting and retention tool without overwhelming the budget

  • Shows a commitment to employee well-being

2. Employer Dollar Contribution / Benefit Bank

• The employer provides a specific dollar amount that employees can apply to any voluntary benefit they choose. Employees pay any remaining cost.

• Why choose this option:

  • Gives employees flexibility to choose benefits that meet their unique needs

  • Encourages employees to take ownership of their benefits decisions

  • Helps employers control costs while still offering meaningful support

3. Employee-Fully Paid

• The employee covers 100% of the cost for any benefit they select.

• Why choose this option:

  • Adds flexible options at no cost to the employer

  • Provides access to a wider range of benefits without increasing employer expenses

  • Offers employees choice and personalization, which can increase satisfaction

Voluntary benefits often include:

• Dental and vision insurance

• Accident insurance

• Critical illness and cancer coverage

• Hospital indemnity plans

• Short-term disability and life insurance

What Employees Actually Use

While it might be tempting to offer every benefit under the sun, employee engagement and usage rates vary. Here’s what data and experience show:

1. Accident and Hospital Coverage

• Highly utilized by employees who experience unexpected injuries or hospital stays

• Provides cash benefits that can help cover co-pays, deductibles, or lost wages

• Often appreciated more than “optional” perks because it addresses real-life emergencies

2. Critical Illness and Cancer Insurance

• Used by employees facing serious medical diagnoses

• Provides lump-sum payments that support out-of-pocket medical costs and everyday living expenses

• Employees often cite this as one of the most valuable voluntary benefits

3. Dental and Vision

• Widely used because routine care is expensive without coverage

• Employees often sign up for family coverage as well, making these benefits especially popular

4. Short-Term Disability

• Offers peace of mind for employees who temporarily cannot work due to illness or injury

• Usage may not be constant, but the perceived security boosts satisfaction

Benefits Employees Rarely Use

Some benefits are popular in surveys but see low actual usage:

• Lifestyle perks like gym memberships or wellness subscriptions

• Identity theft protection (unless promoted and integrated effectively)

• Pet insurance

While these perks can be nice additions, they rarely deliver tangible, daily value compared to accident, critical illness, or hospital coverage.

How Employers Can Choose Wisely

1. Ask Your Employees – Use surveys or focus groups to identify what they value most.

2. Look at Usage Data – If you already offer voluntary benefits, review which plans employees actually claim.

3. Prioritize High-Impact Benefits – Accident, critical illness, hospital, and dental/vision coverage often deliver the most value.

4. Educate Employees – Benefits are only valuable if employees understand and use them. Provide clear communication and guidance.

Why It Matters

Offering the right voluntary benefits:

• Improves employee satisfaction and loyalty

• Helps your workforce feel protected and supported

• Can differentiate your organization in a competitive job market

Remember: It’s not about offering the most perks, it’s about offering the right ones employees will actually use.

Ready to Optimize Your Voluntary Benefits?

If you’re unsure which voluntary benefits will resonate most with your employees, I can help you:

• Review your current offerings and usage trends

• Identify high-impact benefits that employees will actually use

• Provide communication strategies to boost adoption and engagement

Schedule a consultation today to make sure your voluntary benefits truly support your team—and your business goals.

Click Here To Schedule an Employer Benefits Consultation