Open enrollment is the brief period once a year when employees can change their benefits selections. During [open enrollment season](https://employers.workingadvantage.com/blog-content?item_id=96d55e23-2ca4-451d-b7e4-101972d081d9), employees can choose options for traditional benefits, such as health insurance, and sign up for voluntary benefits. Employers encourage employees to select carefully to maximize the value of their benefits.
## What Are Voluntary Benefits?
Voluntary benefits are services, goods, discounts, or other perks an employer offers that workers may participate in or decline. Examples are life, vision, dental, or critical illness insurance. Voluntary benefits can be a [smart choice for employers](https://hrexecutive.com/why-voluntary-benefits-are-a-game-changer-for-retention/) because they help attract and retain employees and meet the needs of a diverse workforce. [They boost morale](https://employers.workingadvantage.com/blog-content?item_id=acddbe8d-2ebc-4f0c-9203-eb2867df03e5). They also are mostly or entirely paid for out of the employee's paycheck, so they are budget-friendly.
Voluntary benefits are a smart choice for employees because they can help them manage financial risk and are usually offered at a lower cost than the employee could obtain on their own.
## How To Assess Needs Before Choosing Voluntary Benefits
Voluntary employee benefits are a vital aspect of financial planning. Employers can provide an important service to employees by teaching them how to choose voluntary benefits. Employees should:
- Analyze their current financial and healthcare needs.
- Consider the needs of their family now and in the future.
- Evaluate coverage gaps that exist after evaluating core benefits.
## Top Voluntary Benefits to Consider During Open Enrollment
Some of the most [popular voluntary benefits](https://employers.workingadvantage.com/blog-content?item_id=71609ac5-f73f-4d28-a7fd-e970798a01b0) are:
- **Disability insurance.** It provides income should an employee become unable to work due to illness, accident, or disability. There are two types: short-term and long-term. Disability insurance can help protect a family from financial hardships due to a wage-earner's illness.
- **Accident insurance.** It provides cash if an employee is injured in an accident. The cash helps the employee pay for expenses not covered by health insurance.
- **Critical illness insurance.** It is similar to accident insurance but for illnesses such as heart attacks or strokes.
- **Group legal plans.** These discount plans cover common legal issues such as simple divorces, estate planning, and contract review.
- **Identity theft protection.** It helps employees protect their personal information and may also provide cash compensation for financial losses caused by identity theft.
- **Group wellness benefits.** Examples are gym memberships, yoga classes, or discounts on smartwatches.
## Balancing Cost and Coverage
Companies can help employees make open enrollment decisions by balancing voluntary benefits vs. their potential savings and coverage. For example, an employee may be debating [how much of their income](https://www.investopedia.com/ask/answers/09/limit-disability-insurance.asp) to protect with disability insurance. The more income they protect, the higher the premiums. If an employee is the primary support for a large family, paying a higher premium to protect more of their income might be the best value.
Employers can provide tools such as comparison charts to help employees maximize benefit savings.
## Common Mistakes to Avoid When Selecting Voluntary Benefits
Employees sometimes make mistakes when choosing voluntary benefits. The most common are:
- Overinsuring or underinsuring. Overinsuring occurs when employees buy more insurance than they need. Underinsuring occurs when they buy too little.
- Failing to update benefits based on life changes. Marriage, divorce, having children, buying a home, or having children move out of the home are examples of life changes that require benefit updates.
- Ignoring supplemental benefits that may be useful in specific circumstances. For example, an employee who lacks a will may want to sign up for legal services during open enrollment, even if they've never used that benefit before.
## The Role of Voluntary Benefits in Financial Wellness
Some voluntary benefits help promote financial wellness by safeguarding against emergencies, reducing out-of-pocket expenses, or advising on a financial strategy. Examples include identity theft protection, student loan repayment assistance, discounted financial planning services, supplemental insurance, and tuition reimbursement.
## How to Enroll and Make the Most of Your Benefits
Employees can sign up for benefits during open enrollment by:
- Obtaining the right form from their human resources department.
- Checking the appropriate benefits choices.
- Submitting the form by the open enrollment deadline.
Employees can maximize benefit utilization by remembering to use the benefits they've selected, such as the discounted gym membership or meeting with the financial planner. Employers can maximize their employees' use of voluntary benefits by gathering quantitative and qualitative data about the most popular benefits, asking employees what they want, and communicating about the benefits throughout the year.
## Recap
Voluntary benefits are valuable to employers and employees. They help employers recruit and retain talent. They allow employees to customize a benefits package to their specific needs. Employees who choose benefits wisely can save money and achieve financial, physical, and mental wellness goals more quickly.
Companies should communicate information about voluntary benefits before the open enrollment period begins. They should also clearly communicate any matching contributions or incentives they will offer. Employees should review the benefits annually and make changes based on their needs before the end of open enrollment.
Companies that want to keep their employees engaged can launch a comprehensive voluntary benefits program today. [Working Advantage](https://www.workingadvantage.com/employer) offers a complete corporate discount program with very little work for employers.
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