Why voluntary benefits belong in the broader talent strategy

Employers have traditionally viewed voluntary benefits as additions to a core benefits package. But as employees face rising healthcare costs and greater financial pressure, these offerings deserve a more central role in workplace strategy.

Research by Lincoln Financial and the Employee Benefit Research Institute found that among employers offering supplemental health benefits, more than three-quarters report positive effects on recruitment, retention, and performance. Eighty-five percent also report improved employee satisfaction when enrolled in supplemental health benefits.

Yet adoption of supplemental health coverage remains limited. Fewer than half of surveyed employers offer any single supplemental health benefit, and only 11% offer all three – accident, critical illness and hospital indemnity insurance.

This gap raises a larger question: Are employers overlooking an opportunity to use voluntary benefits as a more powerful lever for workforce attraction, retention and financial well-being?

Financial security is part of the compensation equation

Compensation is the foundation for attracting and retaining employees and supporting workforce performance. But a paycheck is only part of helping employees feel financially secure. A single unexpected medical event could impact a household’s finances.

For example, more than half of surveyed employees who experienced a recent medical event paid at least $1,000 out of pocket, yet only 28% of employees said they were very prepared for an expense of that size. That stress doesn’t stay home when people clock in. It follows them to work.

That’s where voluntary benefits can add an extra layer of financial protection for costs health insurance may not fully cover. By offering supplemental benefits, employers can help support employees through moments that may affect their financial well-being.

How employers and brokers can support a workforce

When evaluating a voluntary benefits strategy, employers should first ask whether employees understand and use the coverage already available. That insight can help employers and brokers decide whether to improve education, address coverage gaps or add options that reflect workforce needs.

Existing benefits programs may also include financial wellness, caregiving, employee assistance, travel assistance, cancer care, grief and beneficiary resources. These programs speak directly to the pressures employees face but can be overlooked when medical and retirement decisions dominate their attention. As a result, employers may not realize the full return on their investment, and employees may miss resources designed to support their financial, physical and emotional well-being.

Brokers can connect workforce needs with benefit options, identify potential gaps and help employees see how voluntary benefits may support their financial well-being. There is no one-size-fits-all approach to benefits. The goal is to help employees understand what fits their individual needs and make confident choices.

Helping employees and their families prepare for the unexpected

Employees make important benefits decisions within a limited window. Eighty-six percent spend four hours or less reviewing enrollment materials, with most of that time devoted to medical and retirement benefits. That leaves little time to consider how voluntary benefits could complement existing coverage.

Yet unexpected health events are common. Fifty-six percent of employees have experienced an accident or injury requiring medical care for themselves or an immediate family member, while 55% report that they or a family member have been admitted to a hospital as an adult. These events can place added strain on a household’s budget.

Accident, critical illness and hospital indemnity insurance can help employees and their families manage out-of-pocket medical expenses and provide an added layer of financial protection.

Identifying workforce needs and potential coverage gaps is an important start, but offering the right benefits is only part of the equation. Employees also need clear, relevant information about how voluntary benefits work and how they can protect their families’ financial well-being. That is where education can make a difference.

Education makes the difference

With many options to compare, employees may pass on a voluntary benefit because they are unfamiliar with it or do not see how it could support them or their family.

Plain-language education can help. After reading a short description, 76% of employees not enrolled in critical illness insurance said they would be interested in enrolling. Interest isn't the same as enrollment, but it shows how clear communication matters.

Education should also extend beyond open enrollment. Employers and brokers can share real-life examples, explain how benefits work together and use multiple channels to meet employees’ preferences throughout the year.

A bigger role, thoughtfully played

Voluntary benefits can play a broader role in supporting employees through financial and health-related challenges. By examining workforce needs, evaluating utilization and providing clear education, employers can build a strategy that helps employees and their families prepare for the unexpected.

A benefit delivers value when employees understand its purpose, choose coverage that fits their needs, and know where to turn for support.

That understanding can benefit employers too. Helping employees understand and use their benefits can strengthen loyalty, support workforce well-being and reinforce the value of the broader benefits strategy.

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Kerry Brooks is senior vice president, group protection product, workplace solutions marketing and customer experience, at Lincoln Financial. Contact her at kerry.brooks@innfeedback.com.