Voluntary Benefits

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image of voluntary benefitsVoluntary Benefits: What Employees Want and What Employers Offer

By Rob Shestack, CES – Pearson Partners Spotlight Series Breakfast Panelist

The employee benefits arena has undergone a seismic change in just a few short years. Crippled by rising costs, employers are no longer willing or able to pay for comprehensive health insurance coverage while still offering core benefits programs such as life and disability coverage, along with attractive pension programs. In the last ten years, benefits costs have increased by a staggering 80 percent, forcing employers to scramble to control costs.

For some employers, this meant increasing employees’ contributions to their health insurance program, reducing the benefits offered within existing medical plans and increasing employees’ outof-pocket expenses.

As the U.S. health coverage environment evolves, however, employees still want to know, What are employers doing to help offset the rising costs of providing for our families? The answer comes in the form of voluntary benefits. Employers striving to offset insurance costs while still attracting and retaining top workforce talent are offering increasingly variable voluntary benefits programs—and working Americans are eagerly accepting the shift as a way to supplement core coverage.

Why Voluntary Benefits?

The surge in voluntary benefits can be explained with one word: finances. As healthcare costs rise, both employers and their workers are feeling the pinch where it hurts the most. Voluntary benefits programs have emerged as a way to control costs while allowing both parties to prosper. For employees, voluntary benefits provide a cost-effective, choice-driven way to bridge the gaps left by diminished employer-covered benefits plans.

The majority of voluntary benefits recipients fall into the following categories:

  • Employees who are currently underinsured due to cost constraints
  • Employees who are deemed uninsurable by the standards of comprehensive benefits programs
  • Individuals who do not have access to quality insurance programs outside of their places of employment

The rewards of voluntary benefits for employers are just as financially tangible. According to LIMRA’s “The Changing Group Insurance and Health Care Marketplace,” JHA Disability Fact Book, employers who embrace voluntary benefits can expect the following:

  • Controlled healthcare costs. Voluntary benefits provide employers with an opportunity to help employees offset out-of-pocket medical expenses, potentially reducing the impact of increases to deductibles, coinsurance, and copayments.
  • Enhanced employee recruitment and retention. Voluntary benefits help enrich an employer’s benefits offering, providing opportunities for more comprehensive coverage. Successful voluntary benefits providers also educate employees on the scope and value of employer-provided programs.
  • Reduced administrative costs. Voluntary benefits help employers subsidize their core benefits communication, enrollment, and possible HR outsourcing expenses.

The key for employers, of course, is to offer affordable, easy-to-understand voluntary benefits programs that matter most to their employees. Customer choice is considered a virtue. As a result, employers are offering a mix of medical and nonmedical voluntary programs.

Conclusion

Voluntary benefits provide valuable supplemental benefits to employees at little or no cost to employers. In today’s hostile healthcare market, it may be the only win-win situation left.

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