Why Voluntary Benefits Are No Longer Voluntary for Employers

Are You Missing an Opportunity?

By Karen English, CPCU, ARM and Lai-Sahn Hackett, CPDM

 

Introduction to Voluntary Benefits

Gone are the days of “voluntary” being frowned upon in the workplace.  We are past the stage of employer unease with the concept and the resulting worry about “selling” to employees.  Instead, voluntary benefits have become a welcome addition – some would even say critical – yielding increasingly competitive employee benefits packages that couldn’t be offered without them.

we are at a point where employers welcome voluntary benefits, yielding increasingly competitive employee benefits packages that couldn’t have been reached without them.Voluntary Benefits Dental Insurance

Voluntary benefits are insurance products or services made available by employers, but paid for by employees.   They are typically offered at lower rates than employees can find on their own, and provide a degree of choice beyond an employer’s core benefit offering.  There are a number of insurance carriers that underwrite them with products ranging from traditional life, disability, dental and vision to emerging concepts such as critical illness, identity theft protection and student loan repayment.

Employers like voluntary benefits because they make their packages stronger and tailored to the wants and needs of their specific workforce. Employees like them because they are easily accessible, pre-vetted, discounted and more diverse than traditional benefits. Carriers, brokers and consultants like them because they are a needed extension of employer core offerings.

Employer Need

Voluntary Employee BenefitsIn today’s competitive environment, employers are striving to maintain relevant benefit offerings despite increasing costs and the continuing uncertainty of healthcare reform.  The constant need to attract and retain talent and increase productivity is even further challenged by evolving workforce demographics and degree of consumerism being applied to every interaction. Further, a recent survey found that sixty percent of employees are likely to take a job with lower pay but better benefits, emphasizing the importance of a robust benefits program made possible, in part, through voluntary products1.

However, it should not be looked at with a one-size-fits-all approach. Employers can no longer look across their employee populations and make a short list of benefits that will fulfill their collective needs.  With millennials now equaling the baby boomers in number, and generation X’ers on their way to surpassing both, employers need to think about not only age and gender, but also personas within these segments, such as what is warranted by income and lifestyle2.

Market Response

In recognition of these needs, insurance carriers have expanded their capabilities beyond what are typically core employer-paid benefits to what are often referred to as supplemental employee-paid benefits that can either be stand-alone or structured as buy-ups to core plans.  This expansion has opened up possibilities for employers, as they are no longer subject to a subset of specialty carriers and brokers with limited and often self-serving products. They instead can turn to over twenty3 of the most recognized life and health carriers to fulfill the widespread needs of their employees.Voluntary Benefits Trends

These carriers are partnering with employers, brokers and consultants to design voluntary programs that will resonate with employee populations.  Whether it is employee health, wealth, security and/or personal needs that an employer is looking to address, the products that can respond are broad, appealing and growing.  Considering the category of health, for example – accident, critical illness, dental and hospital indemnity are among the most common voluntary benefits offered4.  Within the category of wealth – optional disability, financial counseling and student loan repayment are highly popular. With respect to security, identity theft protection is projected to be the fastest growing voluntary benefit and within the personal sphere, pet insurance is following suit5.

How to Get Started

If you are grappling with how to find that happy medium for your workforce, taking the following steps will give you a start.

1. First and foremost, assess what your employees are interested in. At this point of conducting employee surveys and/or focus groups, you aren’t making any promises, just trying to listen and understand which voluntary products would be more valued than others.Voluntary Benefits Prices

2. Armed with this information, consider what your population can afford. You may find, for example, that six voluntary products are of most interest to your workforce. This doesn’t mean that employees can afford to buy all six.  In fact, we find that no matter how many are offered, employees purchase no more than three voluntary products at any given time6.

3. From here, think about resources to enroll and administer voluntary benefits. You may already have a technology platform you will want to leverage, or existing relationships with a set of carriers and enrollment firms that can help streamline the process.

Employee Benefits Communications4. Lastly and most importantly, contemplate not only how you will communicate their availability, but ultimately why employees should consider them. Employee education is critical to the reception of voluntary benefits, and the value proposition or “need” has to be clear for a benefit to even be considered7. This need should ideally be developed and communicated prior to the enrollment period, not during enrollment when the employee has likely already made up their mind and is not as open to processing new information.

Conclusion

In closing, the world of voluntary benefits looks very different than it did even five years ago. This shift is a result of a variety of factors including the rising costs of healthcare, changing workforce demographics, the increasing customizability of services in general, and the growing challenges presented by recruitment and retention. We are at a moment in time where stakeholders – employers, employees, carriers, brokers/consultants and more – are aligned and where there are great options for all parties.  The opportunities are endless and can be considered as a short-term strategy for now, with a longer-term view established based on the initial roll-out results.

 

Sources:

2016 Aflac WorkForces Report, op.cit
Pew Research Center, Millennials Overtake Baby Boomers as America’s Largest Generation, April 25, 2016
3 Spring Consulting Group and Gen Re Voluntary Pulse Market Update, 2016
4 Spring Consulting Group and GenRe Voluntary Market Pulse, 2016
5 Willis Towers Watson Voluntary Benefits Survey, 2016
6 Spring Consulting Group and GenRe Voluntary Employee Pulse, 2015
7 Spring Consulting Group and GenRe Voluntary Employee Pulse, 2016

 

Spring Consultants to Present Voluntary Benefits to Industry Organization

Karen English, Spring Consulting Group

Karen English, Spring Consulting Group

It was recently announced that Spring Partners and Consultants Karen English and Teri Weber, will be presenting Voluntary Benefits at an upcoming meeting of the New England Employee Benefits Council (NEEBC).

The presentation, titled “Voluntary Offerings:  From Auto to Zebra Coverage,” will kick off by summarizing the current landscape and providing some primary research about the pulse of the market which includes key trends, marketplace changes and benchmarks.

From there, experts will discuss the evaluation process including determining if your organization is well positioned for voluntary benefits, how to implement a best in class strategy including identifying partners, defining the employee experience and rolling out a successful program.

teri weber spring consulting group

Teri Weber, Spring Consulting Group

The session will wrap up with employer panelists providing unique and detailed insights from their experiences and addressing your questions.

English and Weber will be joined in the presentation by Joanne Abate, Assistant Vice President, Global Health and Insurance Programs at UNUM and Lydia Jilek, Senior Consultant, Voluntary Benefits at Willis Towers Watson.

The event will take place on Thursday, October 6th from 8:30am-12:00pm with Registration and Breakfast from 8:00am-8:30am at Waltham Woods Conference Center, 860 Winter Street, Waltham, MA.

More information on the event can be found here or by calling 781-684-8700.

Identity Theft Coverage Now a Tax Deductible Employee Benefit

identity theft coverage

Image credit: GotCredit via flickr

With the growing threat of data breaches and hacking incidents on the rise, having identity theft protection is quickly becoming as important as home or auto coverage. Forward-thinking employers looking to attract and retain top talent have been adding identity theft protection to the benefit offerings, but to date, there has been no financial incentive to do so for the employer.

The U.S. Internal Revenue Service (IRS) recently announced in Announcement 2016-22, that identity theft protection could be offered to employees on a tax-free basis regardless of a prior data breach. In the past, the IRS has offered the tax-free perk to employers ONLY if a data breach has occurred. This latest move allows employers to move from being reactive to proactive and use identity theft coverage as an attractive perk.

Spring is a market leader in developing the most attractive and appropriate employee benefit packages for employers of all sizes. We offer an excellent Financial Protection Plus identity theft protection product for individuals and families, through a relationship with LifeLock; the leader in Identity theft protection for ID and credit fraud.

LifeLock provides a series of proactive services to protect your employees’ identity and provides a $1 million service guarantee.

For less than $10 per month, employees can purchase protection against identity theft, ID and credit fraud and more.

Services are available for individuals and families via online enrollment through secure, encrypted servers.

For more information on how you can get these critical services to offer to your employees, please contact our team today!

Study Shows That Employers Have a Lot of Work to Do with Benefits

employer benefitWith health insurance rates on the rise and the job market improving, employers are quickly finding it more difficult to recruit and retain good employees. Many businesses have placed their focus on making their workplace and benefits packages more inviting and appealing.  Unfortunately for them, according to a recent study, they aren’t doing enough.

Benefit provider Unum recently released the findings of an interesting survey which found that only 49% of those polled considered their company an excellent or very good place to work. Further, only 47% of the survey participants that were offered benefits by their employer considered the benefits excellent or very good.

The survey was conducted online and consisted of 1,521 working adults in the United States.

Clearly there is much room for employers to improve both workplace and benefit offerings. There is much to be said for the connection between an employee’s satisfaction with their benefit package and their perception of their workplace. The two are certainly connected and improving your benefits should give you a head start in improving things around the office.

See also: How To Make Your Voluntary Benefits Program What Your Employees Really Want!

One simple way in which employers can improve their employees’ opinion of their benefit package is to simply find out what it is that employees want and craft their package around those findings. We have found that often, what an employer perceives to be important in a benefit package isn’t necessarily the same as what their employees are looking for. Voluntary benefits can play a very important role in this process.

Voluntary benefits offer employers the creativity to make helpful products available to employees that they wouldn’t otherwise have access to. By adding desirable voluntary products to an employee benefit package, an employer not only makes it more appealing to their current employees, but also gives that employer an advantage over their competition when recruiting new employees.

Need assistance identifying the right voluntary products to offer your employees and properly implementing them? Contact our team of employee benefit professionals who will be more than helpful in building you a package of products that will enrich the lives of your employee’s and help improve your recruitment and retention efforts.

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