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

 

Funding Medical Stop-Loss Insurance in Captives: What You Need to Know (White Paper)

Medical Stop-Loss insurance Captive fundingHealthcare reform, increasing costs, lazered coverage and leveraged trends are causing many employers to reconsider their stop-loss options. These include employers who are fully insured considering a move to self-insurance and current self-insured employers.

Healthcare reform mandates have led to many employers to review the cost of their medical insurance programs including funding alternatives and the need for additional stop-loss coverage. Deciding to insure medical stop-loss and fund it in a captive has proven to be a great way for employers who self-fund their health insurance to add a layer of protection from excessively high individual or aggregate health claims and meet ACA requirements.

Medical stop-loss insurance is not considered first dollar health insurance benefit and thus stop-loss captives are not subject to Department of Labor approval in the United States like many benefits are. Also, by funding stop-loss in a captive, an employer gains access to lower-cost reinsurance they might otherwise not be eligible for as a direct purchaser.

This white paper explains how medical stop-loss insurance captives work, the common types of medical stop-loss captives and who should consider one. We hope you find it helpful and enlightening. If you have any questions at all, please don’t hesitate to contact our captive consulting team. All of our contact information is listed on the final page or this paper.

To get your FREE copy of this white paper, please fill out the form below:

The Benefits of Captives for Small and Mid-Sized Businesses (White Paper)

Captives for Small Mid Sized Businesses While they were once almost exclusively risk funding mechanisms for the largest of corporations, captives have evolved over the years and a suite of captive funding options have been developed to assist businesses of all sizes.

In this paper, we seek to educate you about captive insurance, the history, benefits and the options available to small and mid-sized companies. We will explain what a cell captive is and how it can be an excellent entry point for a company into captive insurance. Finally, we will explore the next steps for your business if you decide that captive funding of your company’s risk might be a good choice and would like to explore it further.

We hope you find this paper helpful and enlightening. If you have any questions at all, please don’t hesitate to contact our captive consulting team. All of our contact information is listed on the final page or this paper.

To get your FREE copy of this white paper, please fill out the form below:

Captive Insurance for Businesses

captive insuranceOver the past two decades, the choice to fund a portion of a their risk in a captive has become a more and more popular one for business owners. Whether it be property and casualty risk or employee benefits, employers understand that this funding mechanism, once viewed as an option only for the largest of corporations, is now an option for companies of all sizes and industries.

There is much to be gained from captive risk funding. Some of the most notable and common benefits include:

  • Potential short- and long-term savings
  • Customized employee benefits designs and property & casualty programs
  • Enterprise risk financing applications
  • Potential financial efficients like cash flow and insurance

Spring’s captive insurance experts recently teamed up on a helpful new book about captive insurance. In “The Basics of Captives,” we have laid all the information an employer needs to know about captive insurance including:

  • Why you would want to consider a captive
  • What exactly a captive is
  • What captives can cover
  • What kind of captives are there and how do they work
  • Where captives are domiciled
  • How to know if a captive is right for your business
  • How to go about establishing a captive

Spring’s award-winning captive team, lead by one of the industry’s top captive leaders, Karin Landry, have designed and built countless captives over the past 25 years including some of the world’s most innovative funding solutions. In this book, they share a little of their experience, along with some of the recent trends they are seeing, in hopes of helping even more businesses save money on and gain control of their risk programs.

To download a FREE copy of this Captive Insurance for Businesses book, just fill out the form below:

Paid Sick Leave Compliance and Employer Best Practices

sick leave photo

Photo by umjanedoan

Across the United States, a legislative movement to mandate paid sick leave time for all employees has picked up significant momentum over the past couple of years. With a number of states, municipalities and even the President advocating for these new mandates, it is important that employers know how these changes impact them.

At a recent Disability Management Employer Coalition event, Spring partner Teri Weber gave the presentation below on paid sick leave laws with fellow industry experts Geoffrey Simpson from Presagia and Mike Soltis from jackson lewis.

We hope you find this slidedeck helpful and please don’t hesitate to reach out to contact us with any questions about paid sick leave laws or anything related to leave management.

Managing Medical Stop Loss in a Captive (Presentation)

Spring Senior Partner John Cassell recently organized and participated in a session at the Captive Insurance Companies Association (CICA) annual conference titled Developing the Operational Strategy of Managing Medical Stop Loss in Your Captive. Cassell was joined by co-presenters Stephen Hannabury, President of Educators Health Insurance Exchange of New England and Jesse Crary, an attorney from Primmer Piper Eggleston & Cramer PC.

See also: Spring’s Guide to Medical Stop Loss in a Captive (White Paper)

The CICA session focused on Ed Health, a medical stop loss group captive consisting of 11 Boston-area colleges that Spring assisted in the development of. The slidedeck below, which was used in the presentation, details Ed Health’s success to date and lessons learned through the development and ongoing management of a medical stop loss group captive.

We hope you find this deck helpful and please don’t hesitate to reach out to John using the form below with any questions about group captives and/or medical stop loss in captives.

What Employers Need to Know About New Paid Leave Laws

paid leave laws

In May 2015, the city of Philadelphia passed legislation regarding employer-provided sick leave. This act required most employers to offer 40 hours of paid sick leave per year to employees if they didn’t already. This annual sick leave can be used, not only by the employee to tend to his or her own maladies, but also to care for a sick family member.

This legislation is noteworthy enough in a vacuum, but when looked at as a whole along with a number of other recent similar state and municipal enactments across the country, is forming a significant trend. A growing number of jurisdictions are mandating employers to provide paid sick leave to their employees. As of October 2016, 5 states, 29 cities, 2 counties, and Washington D.C. have enacted paid sick leave laws, with several other jurisdictions planning to mandate paid sick time.

In our latest white paper, Lai-Sahn Hackett from Spring’s Integrated Disability Management team reviews legislative acts, across the country, related to sick leave to date and discusses the implications for employers and service providers alike.

You can get your copy of this helpful FREE paid leave white paper by filling out the form below and pressing “Submit & Download Paper.”

Photo by StockMonkeys.com

ACA Update: What You Need to Know About the Cadillac Tax (VIDEO)

Here is our heath care reform update for the week of October 19-25, 2014.

This week, Spring Insurance Group’s CEO, George Gonser, discusses the Cadillac Tax and what it means to employers. As always, if you have any questions at all about the Cadillac Tax, or anything related to healthcare reform, please do not hesitate to contact us.