Labor & Employment Law Daily Wrap Up, REPORTS—Institute finds that offering voluntary benefits improves employee satisfaction, recruitment, and retention, (Dec 16, 2025)

By WK Editorial Staff

The Employee Benefit Research Institute found that improving worker morale was cited by participating employers as the top reason for offering employee benefits.

When companies offer voluntary benefits to workers, they see improvements in employee satisfaction, recruiting, retention, performance, and employee health, according to recent research from the Employee Benefit Research Institute (EBRI). The report, Expanding the Benefits Horizon: How Employers View Voluntary Offerings, found that improving worker morale was the top-cited reason organizations offer employee benefits, as 85 percent of organizations say they see a positive impact on employee satisfaction as a result.

Nearly three-quarters of employers also see an impact on recruiting, retention, and employee performance, while 70 percent see a positive impact on employee health. More specifically, offering a full suite of supplemental health solutions amplifies this impact as employers that offer accident, critical illness, and hospital indemnity coverages are even more likely to indicate that benefits have a positive impact on retention and absenteeism, EBRI found.

“The report findings underscore the growing importance of voluntary benefits in the workplace. Employers are broadening the focus of their benefits beyond traditional offerings such as 401(k) plans and health insurance. Additionally, the research indicates that employers are expanding their focus from simply helping workers retire to providing protection for their financial well-being against health care costs, high costs of living, daily expenses and the impacts of financial-related stress. Voluntary benefits can play a critical role in helping workers flexibly address these issues, as its nature allows employees to select coverages aligning with their unique circumstances and priorities,” said Jake Spiegel, senior research associate at EBRI.

Seventy-three percent of employers say health care costs are one of the top issues faced by employees that their benefits seek to address. While 93 percent offer medical insurance, 83 percent offer dental insurance and 80 percent offer vision insurance, supplemental health insurance coverage is less commonly included in a benefits program. The most commonly offered supplemental health benefit is accident insurance, but less than half (46 percent) offer it. Also, far fewer offer critical illness insurance (27 percent) or hospital indemnity insurance (25 percent). Only 11 percent offer all three of these supplemental health insurance benefits.

Employers broadly agree that voluntary benefits ease employee concerns, help workers weather out-of-pocket expenditures, and are affordable for workers and their families. In addition, the survey found that many organizations feel that if they did not offer voluntary benefits, they would see premiums for their group health insurance plan increase, and some also anticipated lower productivity and more absences.

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