Voluntary benefits, worksite benefits, and supplemental health benefits are all different terms that describe similar products. These products are typically offered by employers as optional benefits for employees, who can decide to opt-in. Participating employees generally pay for voluntary benefits via payroll deduction.

Generally speaking, voluntary benefits provide extra coverage for treatments and services that are either not covered or not adequately covered by standard health insurance plans. One of the most common applications of voluntary health benefits is the supplementary coverage for the treatment of critical illnesses, such as cancer, strokes, or organ failure. It is also possible to provide voluntary benefits that cover less severe health issues, such as torn ACLs, broken bones, or other accident-related injuries.

These benefits provide financial support to participating plan members by dispensing lump sum payments for medical expenses and, sometimes, for household costs and other related expenses that are incurred from covered health conditions. Plans vary in coverage, with some offering set payout amounts for treatments and others covering a percentage of medical costs incurred. Either way, voluntary benefits act to reduce medical bills and protect participating employees from large, unexpected expenses. Voluntary benefits are purchased separately from standard health insurance coverage, and educational resources are often available to help employees determine which products would best complement the coverage of their existing health plan.

Employers typically incur no direct costs when offering voluntary benefits, as participating employees fully pay for their coverage on an individual basis. Costs to participating employees can vary substantially depending on the type of coverage being purchased, the details of the policy in question, and whether they are purchasing coverage for dependents as well as for themselves. Some voluntary products will also tailor pricing to individuals based on factors such as age, medical history, and potentially other relevant information, such as tobacco use.

Unlike health insurance, which pays healthcare providers, claims payments for voluntary Accident, Critical Illness, and Hospital Indemnity policies are sent directly to plan members via direct deposit. To submit a claim for processing, covered plan members must submit an Explanation of Benefits (EOB) to the carrier/provider. Once the EOB is processed and the claim approved, the carrier directly compensates the plan member, who may spend the money however they see fit.

While carriers used to only offer voluntary benefits to larger employers with hundreds of eligible members, access has become much more widespread in recent years. At present, many carriers are willing to offer voluntary benefits for as few as three enrolled employees.

However, adoption of voluntary benefits has been slow to catch up with their newfound availability to smaller employees, and they are still relatively uncommon among smaller groups. This presents a window of opportunity for smaller employers to get a leg up on competitors and implement voluntary benefits today.