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Expand benefits lineup at little cost with ‘voluntary’ perks

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Issue: Benefit costs are rising, but you need to offer a competitive package to retain good workers.

Benefit: Voluntary benefits let you beef up your benefits without much additional cost.

Action: Ask employees what perks they'd prefer. Explain that these won't replace company-paid benefits.

With health costs soaring, many companies are paring back their health benefits and asking employees to pay more. If your company fits that description, you should explore so-called "voluntary benefits" to keep good employees without shelling out much money.

Voluntary benefits offer perks such as legal coverage, auto insurance, estate planning, financial advice, long-term care insurance, home-equity loans and even pet insurance. Employees must cover the cost for these voluntary benefits, but they earn a better deal through company group plans than if they'd bought such services on their own.

Advantage: cost savings and convenience. Employees can deduct payments for these benefits right from their paychecks.

Downside: more paperwork and meetings with employees to explain and administer these benefits.

Will employees buy if offered? Worker participation averages about two-thirds for dental plans, half for vision and supplemental life insurance and one in five for auto, homeowner's and legal insurance, according to a Prudential Financial study.

Resources: More large insurers offer their own voluntary benefits. Online aggregators provide competitive online shopping from several sources.

Check out HRAmerica at www.hramerica.net/services/volun.html and YouDecide at www.youdecide.com (click on "corporate user"). At www.metlife.com, click on "employers" and then "voluntary benefits." Prudential offers www.pruworkingsolutions.com.

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