Voluntary benefits: building a package employees actually use

Every renewal conversation lands on cost sooner or later. Rising medical costs are brought up, the client can’t absorb another increase, and the meeting turns into an exercise in what to trim. We covered that squeeze in our post on cost containment strategies for employers.

Voluntary benefits move the other direction, and the cost conversation can look different. They’re the rare line that strengthens a package at little to no cost to the employer, employees keep asking for more of, and is setting sales records year after year.

There’s a catch, though. A voluntary benefit only earns its place if employees enroll in it and then remember to actually use it when life happens. Typically with voluntary benefits, enrollment numbers get all the attention. In reality, utilization is the number that decides whether the product line survives renewal.

What are voluntary benefits?

Voluntary benefits are insurance products and services that employees elect and pay for themselves, usually through payroll deduction, at group rates their employer negotiates. The employer sponsors access to the benefits; the employee decides whether the protection is worth their money.

That structure explains why the category keeps growing. Employers expand their package without adding premium cost. Employees get coverage they couldn’t buy as affordably on their own, should they choose to purchase it. And for carriers, every election is written premium, which is why voluntary carriers so often fund enrollment technology and education through tech credits.

Voluntary benefits examples

The category is broad, but most packages draw from the same core list.

‍

Employers are offering more of this list every year. In SHRM’s 2024 benefits survey, 51% of organizations offered critical illness insurance, up three points in a year, and 36% offered hospital indemnity, the highest rate in the survey’s history.¹

The category keeps setting sales records

Eastbridge Consulting, which has tracked the voluntary market for decades, reported that voluntary sales hit record highs in 2024, with in-force premium up 4.5%. Critical illness sales jumped 13%, hospital indemnity and supplemental medical rose 7%, and group products made up 78% of all voluntary sales.²

Supply and demand can be the simplest explanation behind the rising numbers. In Voya’s research:³

• 83% of employees said they’re more likely to work for an employer that offers benefits like critical illness, hospital indemnity, disability income, or accident insurance
• 74% wish their employer offered more voluntary options
• 54% would accept a lower salary for better access to them

For benefits consultants, that’s a package-strengthening story with no employer premium attached. For voluntary carriers, it’s the potential growth engine driving numbers for the foreseeable future. 

Utilization is the number that matters

The sales records stop at enrollment. What happens after that, whether anyone actually uses the coverage, is where education earns its keep.

A voluntary line nobody uses is a line that gets cut. Imagine the employee with accident coverage pays an ER bill out of pocket because they’ve forgotten the coverage exists. Enough of these qualifying situations without a claim reminder, and participation slides at re-enrollment. The employer questions the value, and the carrier loses the group it worked to win.

Utilization is where the value proves out. Imagine the best-case scenario: A claim gets filed and paid, a gap in coverage becomes effectively filled, and the employee feels the coverage working exactly how it was supposed to. That employee re-enrolls the following plan year and tells their friend at work about the value this new plan got them. Better yet, this employee appreciates their workplace for offering the voluntary benefit option, which can lead to higher workplace satisfaction. It’s a win-win-win for the employee, employer, and carrier. 

Utilization success relies on two parts: helping employees elect the right coverage, and making sure they remember it at the moment they need it.

How to lift elections, and usage after them

Guide the election

Most employees won’t read a hidden plan document to figure out whether hospital indemnity fits their life. Pasito’s decision support opens with a personalized recommendation across health, retirement, and voluntary plans instead of a long intake form, when employers set it up with core census information. When it’s easier for employees to understand their benefits, elections follow: among Pasito clients, a Wisconsin-based manufacturer reached 45%+ accident coverage enrollment in year one [link case study when live], and a national retailer saw 21% of employees enroll in at least one voluntary benefit.

Stay in front of it year-round

Health benefits are a year-round industry that people sometimes constrain to open enrollment. Those elections happen in one window; the reminders, utilization, and education happen all year. Year-round communication campaigns send targeted benefit utilization reminders straight to inboxes and phones, so the coverage is top of mind when it counts. Some systems even go a step farther with medical integration that proactively scans carrier and TPA data to track medical spend and send timely reminders when expenses cross claim thresholds, prompting employees to file supplemental health benefit claims they'd otherwise miss.

Give it a home

A benefits microsite gives every employee one branded, always-on place to see what they elected and how to use it, pulled from the same plan data as the guides and decision support, so every answer matches.

Make voluntary benefits perform like core benefits

Voluntary benefits earn their place when employees use them (and employers provide them). Whether or not employees use them is often a function of educating. That whole loop (guided elections, year-round campaigns, and one source of plan truth behind it all) is what Pasito was built to run. The results show up in the only number renewal actually cares about: employees who used what they elected.

FAQ

Are voluntary benefits really free for employers?

Access is free or close to it, since employees pay the premiums. The real employer costs are administration and communication, and many voluntary carriers offer technology credits that help fund enrollment and education tools, which can bring the net cost near zero.

What’s the difference between voluntary and supplemental benefits?

The terms overlap, and a third one, ancillary, gets used loosely alongside them. “Supplemental” usually refers to health-adjacent coverage that fills medical plan gaps, like accident, hospital indemnity, and critical illness. “Ancillary” traditionally describes the benefits that ride alongside the medical plan, like dental, vision, life, and disability, whether the employer or the employee pays. “Voluntary” is the broadest umbrella: any employee-paid line, from supplemental health products to legal plans, identity protection, and pet insurance.

References

1. SHRM, “2024 Employee Benefits Survey: Executive Summary.” https://shrm-res.cloudinary.com/image/upload/v1718810601/Employee%20Benefits/2024_Annual_Benefits_Survey_Executive_Summary.pdf
2. Eastbridge Consulting, “New Eastbridge report shows voluntary sales hit historic highs.” https://eastbridge.com/new-eastbridge-report-shows-voluntary-sales-hit-historic-highs/
3. Voya Financial, “Survey: More than 8 in 10 employees more likely to work for a company that offers supplemental benefits.” https://www.voya.com/voya-insights/survey-more-8-10-employees-more-likely-to-work-company-offers-supplemental-benefits