Remember the days when life and disability supplemental insurance were the two main options in voluntary benefits products? Then came years of escalating healthcare costs, an economic downturn, and other events, such as healthcare reform. Although these changes were and continue to be painful for anyone having to deal with them, they have contributed to a much-needed evolution in voluntary benefits.
Today’s voluntary benefits offerings are vastly different from even a decade ago, primarily because of the wider array of available products:
- Critical illness/accident
- Hospitalization/hospital accident protection
- Specialized policies, e.g., cancer coverage
- Individual disability insurance
- Universal life with long-term care riders
- Excess liability—umbrella
- Legal coverage
- Identity theft
- Pet insurance
- Discount health programs
- Purchase programs
- Vacation programs
- College savings programs
Product availability is only part of a successful voluntary benefits strategy. As employees move through the stages of their lives, industry best practices dictate that a voluntary program offer a suite of products to fit corresponding needs. A 35-year-old with young children has different financial concerns than an older empty-nester. Likewise, a 21-year-old renter doesn’t have the obligations of a 60-year-old with health issues and mortgages on multiple properties. A thoughtfully designed voluntary benefits program will offer choice, flexibility and customization to accommodate your employees’ needs.
The voluntary evolution couldn’t have come at a better time. Despite incremental improvements in the economy, employees need the financial protection these products can provide. Add the unforeseen expense of an illness, accident or hospitalization to an already stressed household budget and it becomes clear why voluntary benefits are so critical:
- More than two-thirds of Americans are living from paycheck to paycheck, according to a survey by the American Payroll Association.
- Forty-four percent of Americans are one emergency away from financial ruin, reports the Corporation for Enterprise Development, and a third have no savings at all.
- One in four of today’s 20-year-olds will become disabled before age 67, according to the Social Security Administration.
- Disability is 16 times more likely to cause a mortgage foreclosure than death, according to the National Safety Council.
Beyond the obvious financial protection, voluntary benefits are desirable because they are affordable—even though employees cover 100% of the cost. Deep discounts and group rates are enabled by risk pooling. Voluntary group products also provide a guaranteed issue component, which means automatic acceptance of anyone who applies for them. Group rates and guaranteed issue are advantages not available for similar products purchased on the open market.
Moreover, voluntary benefits such as critical illness policies, accident coverage, hospital indemnity plans, and specialized illness (i.e., cancer plans) fill coverage gaps in a core employee healthcare benefits program at little or no impact to the employer’s bottom line.
If handled properly by your group employee benefits broker, voluntary products won’t create more work for your HR staff. Your broker should do all the heavy lifting, including market research, collecting and analyzing data, designing the program, providing employee education and communications, assisting with enrollment, and protecting your organization with carrier performance guarantees. Further cost savings are driven through administrative efficiencies such as automatic payroll deduction and other payment options that ease the burden on busy HR staffs.
An improving economy brings with it job changes, and if youre like most employers you’re concerned about retaining your top talent. Many businesses infuse voluntary benefits into their core health and welfare plan to attract and keep employees and differentiate their organizations within their respective industries and demographics. It’s a smart move. A Hartford study found that a majority of consumers—86%—say customizing benefits to fit their individual lifestyle is an important choice. Voluntary benefits play a critical role in helping employers meet this desire for customization.
How do you join the voluntary benefits evolution? An employee survey will help you determine the products desired by your workforce. Responding to the survey with a tailored voluntary offering lets your employees know you are invested in their well-being and that of their families.
©2015 Corporate Synergies Group, LLC. No part of this material may be republished or distributed without prior written consent.