Rising healthcare costs continue to challenge employers trying to maintain competitive benefits while managing tighter budgets. Employer health plan expenses are expected to increase by about 7% per employee in 2026, forcing many organizations to explore alternative benefit strategies.

One increasingly common solution is voluntary benefits, which are supplemental benefits employees can choose and typically pay for through payroll deductions. These benefits allow employers to expand their offerings without significantly increasing benefit costs.

Expanding Benefits Without Increasing Employer Spending

Voluntary benefits allow employers to add coverage options without fully funding them. Plans such as accident insurance, hospital indemnity, and critical illness coverage are often employee-paid, making them a cost-effective way to build a comprehensive benefits package.

This strategy has become widely adopted. In fact, 87% of employers offer at least one voluntary benefit, showing how organizations are expanding benefits while maintaining budget control.

Improving Retention Without Increasing Salaries

Benefits play an important role in employee retention. Replacing an employee can cost 50 to 200 percent of their salary, which makes retention strategies critical for controlling workforce costs.

Research shows 83% of employees are more likely to work for an employer that offers supplemental benefits, and 77% say voluntary benefits are an important part of a comprehensive benefits package.

For employers, recruiting and onboarding are ideal times to highlight voluntary benefits so new employees understand the full value of their total compensation package.

Helping Employees Manage Out-of-Pocket Medical Costs

Many employers have adopted high-deductible health plans (HDHPs) to help control premium costs. As a result, employees often face higher out-of-pocket medical expenses.

Voluntary benefits help close that gap by providing cash payments when certain medical events occur. For example:

• Accident insurance pays benefits after injuries
• Hospital indemnity plans provide payments for hospital stays
• Critical illness coverage provides lump-sum payments after major diagnoses

These benefits can help employees cover deductibles, copays, and other unexpected expenses, giving them multiple ways to manage healthcare costs. During open enrollment, employers can share how to pair voluntary benefits with HDHPs, so employees understand how the benefits complement their health plan.

Voluntary benefits offer employers a practical way to strengthen their benefits package without significantly increasing costs. They expand employee choice, support financial protection, and improve retention while helping employers manage budgets.

Partnering with Pierce Group Benefits

For many organizations, voluntary benefits are becoming an important part of a sustainable benefits strategy. Employers who partner with us to offer these benefits show a strong commitment to supporting their employees’ health and financial well-being. To learn more, contact your Pierce Group Benefits Account Executive or email partnership@piercegroupbenefits.com.