How can voluntary benefits support financial wellness and reduce stress for employees?

Additional voluntary benefits also boost employee satisfaction and loyalty, ensuring that their workforce feels supported and valued in all aspects of their lives

Additional voluntary benefits can sometimes be better tailored to the needs of employees. In Germany, for example, there are problems with childcare for employees. The provider heynanny helps here with its platform and offers. The company Corporate Benefits helps every employee to save money when they buy something via the platform. Agreeing on special conditions for employees shows the employee that he or she is valued and increases employee loyalty. In addition, they are also easy for small companies to finance.

Voluntary Benefits offer a wide assortment of Non-Traditional Insurance Products. I.E. Cancer, Short & Long Term Disability, Sickness, Accident Policies, etc. Some of these Products allow Insured’s to violate the Pure Risk aspect of Traditional Insurance by allowing The Insured to Profit from an unforeseen accident. Voluntary Benefits also typically come with an IRS Section 125 Pre-Tax of Premium on certain Products. This saves the EE on Premium Cost & The Employer gets a Tax Break on Payroll. The overall mission is to allow EE’s the ability to supplement their Insurance needs on a Pre-Tax basis & give them the opportunity to have a reason to stay engaged with the Employer & keep potential turnover at a more manageable rate.

Voluntary benefits are also often very emotional because they can solve everyday problems for employees. Example young parents: Over 80% of young parents struggle with sleep problems and it is estimated that this results in a loss of productivity of around 12,000 euros per year (Germany). Employers can help their employees with baby sleep coaching. Hardly any employer knows about this great opportunity and believe me, the results and reactions of employees and their families are phenomenal. Incidentally, one of the most affordable employee benefits I know.

For many employees, the necessity for voluntary benefits generally comes from an undesirable situation. No one thinks about the need for life insurance or short-term disability until disaster strikes. But during those difficult times, it is those voluntary benefit programs that can make all the difference in the lives of employees and their families.

Voluntary benefits can offer significant tax advantages for both employers and employees. For example, voluntary life insurance premiums can often be paid with pre-tax dollars, reducing taxable income for employees and lowering payroll taxes for employers. However, to maximize these benefits, education is crucial. Employers should provide clear information on how these benefits work, perhaps through workshops or informational sessions. For instance, explaining how pre-tax contributions to life insurance can provide financial protection for families while offering tax savings can help employees see the value in participating.

Voluntary benefits are crucial in fostering financial empowerment among employees. As a financial coach, I've seen how financial education and counseling provided through these benefits can transform lives. Offering personalized coaching sessions and practical tools like budget calculators and investment guidance can help employees make informed decisions, reduce financial stress, and achieve long-term goals. These benefits not only support individual financial health but also contribute to a more engaged and productive workforce.

Although this is an important building block for relieving employees of financial stress. The employees and the market will show how long it takes until such programs become normal.

Financial wellness shouldn't be overlooked in wellness benefits. Financial stress can lead to physical health issues, including hypertension and sleep disorders. By incorporating financial wellness programs—such as budgeting workshops, debt counseling, and retirement planning—into your benefits package, you address a critical aspect of overall well-being. Helping employees manage their finances can reduce stress, improve mental health, and contribute to their productivity and happiness.

Voluntary benefits, such as life insurance products, can significantly boost employee engagement and loyalty. Life insurance offers employees a customizable safety net, providing peace of mind and financial security for their families. When employees feel they have a choice and control over their benefits, it fosters a sense of ownership and appreciation for their employer's support. This recognition of care enhances motivation and commitment. Furthermore, life insurance as a voluntary benefit supports financial wellness, reducing stress by ensuring employees' loved ones are protected, thereby attracting and retaining top talent.

I like to think of voluntary benefits, especially supplemental health plans, as a way for employees to create an immediate “rainy day” fund (to be used only in the event of a medical emergency). Certainly no substitute for a true savings account. But until you’re able to to establish a significant level of savings they are a low cost way to keep you on track toward your goal of financial stability. And for those already there — they are a solid form of asset protection. This is especially true for those in high deductible health plans. No need to dip into your HSA or bank account if you have $10k or $20k of Critical Illness Insurance. Just my humble opinion.