What Are Voluntary Benefits?
Voluntary benefits are employer-sponsored insurance products and services that employees can elect and pay for individually, either fully or through cost-sharing arrangements. Because employees fund most or all of the cost, voluntary benefits allow employers to expand the breadth of their benefits offering without proportionally increasing their own benefits spend.
Common voluntary benefit categories include critical illness insurance, which provides a lump-sum cash payment upon diagnosis of a covered condition such as cancer, heart attack, or stroke. Accident insurance pays benefits based on specific injuries or events, covering out-of-pocket costs that medical insurance does not fully address. Hospital indemnity insurance provides a daily cash benefit during a hospital stay. Legal plans, pet insurance, identity theft protection, student loan assistance, and financial wellness programs round out the non-medical voluntary benefits category that has grown significantly in employer adoption over the past several years.
Why Are Voluntary Benefits More Important in 2026?
Healthcare costs are the primary driver of voluntary benefits growth in 2026. LIMRA’s 2026 workplace benefits analysis projects that employer healthcare costs will rise approximately 8 percent this year without plan design changes. As employers manage that cost pressure, they face a parallel challenge: maintaining a competitive benefits offering in a market where employees increasingly evaluate total compensation based on benefits quality.
According to MetLife’s 2026 EBTS, 62 percent of workers believe non-medical benefits are essential to accessing preventive care. The same study found that employees who use 10 or more non-medical benefits are 69 percent more likely to feel holistically healthy. The connection between voluntary benefits access and overall workforce health and engagement is one of the most consistent findings in recent workplace benefits research.
Which Voluntary Benefits Should Employers Consider in 2026?
Critical illness and accident insurance are among the highest-value additions for workforces where employees carry HDHP coverage with significant out-of-pocket exposure. These products provide cash benefits at the moment of a significant health event, addressing exactly the financial gap that a high deductible creates.
Hospital indemnity coverage addresses the daily out-of-pocket costs that accompany hospitalization, which most health plans cover only partially and which can generate significant employee financial stress even when a claim is ultimately paid.
Legal plans address employee financial stress around legal fees, will preparation, and contract review. Financial wellness programs address the financial stress that MetLife’s 2026 research identifies as the top stressor for 83 percent of employees.
A wellness and population health strategy that integrates voluntary benefits with the primary medical plan is more effective than one that treats them as unrelated additions. Employee benefits strategy advisors can help employers build a voluntary benefits portfolio that complements the existing program structure and aligns with the workforce’s actual needs.
Frequently Asked Questions About Voluntary Benefits
| Frequently Asked Questions | |
| What is the difference between voluntary benefits and core benefits? | Core benefits are employer-sponsored and employer-funded. Voluntary benefits are employer-sponsored but primarily or entirely employee-funded, giving employees access to additional coverage at group rates through payroll deduction without significant employer cost. |
| Who pays for voluntary benefits? | Most voluntary benefits are 100 percent employee-paid, or cost-shared with the employer contributing a portion. The group purchasing arrangement through the employer allows employees to access coverage at rates lower than they could obtain individually. |
| Are voluntary benefits worth adding if employees are already cost-stressed? | Yes, with the right benefit design and communication. Critical illness and accident products that pay cash at the moment of a significant health event are specifically designed to help employees manage the financial impact of health crises that primary insurance does not fully cover. |
| How do employers decide which voluntary benefits to offer? | The most effective approach combines employee survey data on benefits preferences, demographic analysis of the workforce, and a review of where current benefits have coverage gaps. A benefits advisor can help structure this analysis as part of the open enrollment planning process. |
| Do voluntary benefits affect the employer’s health plan costs? | Employers who offer robust voluntary benefits portfolios report lower average health plan costs. MetLife’s 2026 study found that 83% of employers reported lower medical costs as a result of offering non-medical benefits, attributed to the combined effect of higher preventive care engagement and better employee capacity to manage out-of-pocket costs. |
Ready to review your voluntary benefits program before open enrollment? The team at Tooher-Ferraris has been helping employers build complete, effective benefits programs since 1932. Contact us today or request a group employee benefits consultation to get started.
