What are Voluntary Benefits?
Any incentives that employees can accept or reject from their employer are considered voluntary benefits. Voluntary benefits come in a wide variety today. Employers frequently consider the following to be the most beneficial when it comes to attracting and keeping talent:
- Fitness and good health may consist of gym memberships, life insurance, additional disability insurance, and health, vision insurance, and dental insurance.
- Financial wellness may include mortgage protection insurance, student loan payback plans, and financial counseling.
- Personal advantages include employee assistance programs (EAPs), legal advice, discounted goods and services, pet insurance, travel insurance, and auto insurance.
- Security measures could include savings on home security installation, homeowners insurance, and identity theft protection.
Employers can supplement any gaps in group health insurance through optional benefits, which can aid employees in maintaining their health and productivity.
Special bonuses may also entice fresh talent and maintain the motivation and productivity of present employees. Employees typically appreciate it when their employer offers voluntary benefits, even if they choose not to make use of them. Thus, these perks are useful recruitment and retention aids.
Who Benefits from Voluntary Trade?
When two parties freely exchange products or services without the use of force or other restrictive measures, it is called a voluntary exchange. Both parties will profit from the trade, and both parties want to make exchange goods.
Are Voluntary Benefits Pre-Tax?
A person’s taxable income may be reduced by pretax deductions for certain optional benefits that fall under Section 125 of the IRS law, such as group term life insurance or HSA contributions. Other benefits are only deductible after taxes.
Also, See: Non-Cash Compensation