Do your Benefits need a Makeover
Save money and give your benefits package a fresh new look with voluntary products
You know the feeling of finding a great-looking jacket or pair of shoes in the back of your closet you’d forgotten about? You’re happy because this “new” find not only gives your wardrobe a boost, it saves you from buying something new. As employers today start looking again at voluntary benefits, they feel much the same way. By turning to a tried-and-true solution they may not have looked at in a while, they’re finding a way to make their benefits packages fresh and appealing again.
Voluntary products, employee-paid insurance plans that supplement core medical benefits, have been around for decades. Most employers now offer at least one or more of them in their benefits packages. In 2012, 77 percent of companies with 10 or more employees offered at least one voluntary benefit, according to Eastbridge Consulting Group.
However, as health care costs and medical insurance premiums continue to climb, many employers have started to look again at this classic solution. In fact, a 2013 Towers Watson survey of employers showed 21 percent of companies planned to reexamine voluntary benefits last year, and nearly half of them (48 percent) plan to do so by 2018. Voluntary benefits offer many advantages that can help employers cope with some of their most pressing issues.
Voluntary benefits help employers control costs.
To keep insurance premiums for medical coverage affordable, many employers have moved to high-deductible health plans. In fact, the percent of employees enrolled in a health plan with at least a $1,000 deductible has more than tripled since 2006, according to the Kaiser Family Foundation. The downside of this strategy is the large financial exposure gap it creates for employees faced with significant potential out-of-pocket costs. Adding voluntary coverage that helps bridge this gap is a cost-effective solution. In fact, many employers find they can even pay for this additional coverage for their employees and still save money compared with their previous major medical costs.
Voluntary benefits allow employers to expand their benefits packages.
Instead of cutting coverage, many employers find a better, more effective, option is to move noncore benefits to employee-paid voluntary products. This strategy allows companies to continue offering a comprehensive benefits package that may be a differentiator as other employers cut back coverage or even stop offering major medical insurance.
Voluntary benefits give employees access to expanded options to meet their unique family situations, and the coverage is typically more affordable than employees could obtain themselves outside the workplace. There’s no direct cost to employers because employees choose and pay for the coverage they want. Employees gain access to coverage that meets their individual needs and fits their lifestyles. In fact, the personalization offered by voluntary benefits is one of the primary reasons employers say they offer them, according to Towers Watson’s 2013 survey.
Demographic shifts in the workforce demand choices only voluntary benefits can provide.
Today’s workforce is more diverse than ever before. The one-size-fits-all benefits plans of the past just don’t work any longer. Employers can better attract and retain top talent by offering a menu of voluntary benefits employees can customize and personalize to meet their unique needs. Voluntary benefits offer the key advantages of choice, cost and convenience today’s workers are looking for.
Voluntary benefits increase workplace satisfaction.
When employees feel good about their benefits packages, they tend to feel better about their workplace, according to a Unum study. The study showed more than three-quarters (78 percent) of employees who rate their benefits package highly also rate their employer highly. Nearly half who rate their benefits package as fair or poor also rate their employer the same way.
Even when employees pay for benefits themselves, they still highly value them. The same Unum study showed that employee satisfaction with their employers is 23 percentage points higher in companies that offer voluntary benefits.
Communication about benefits may be more important than the benefits themselves.
The Affordable Care Act has created lots of changes in employee health coverage and their benefits packages. That’s why effective benefits communication is more important than ever. Employers nearly unanimously agree it’s important for employees to understand their benefits; 89 percent say it’s very important, according to a 2011 IPMA survey. Yet less than half of employers surveyed by the Society for Human Resource Management in 2010 believed their employees actually have a good understanding of their benefits.
Without a strong benefits communication plan, employees won’t understand their options or appreciate the investment their employer is making. Employees are also much more likely to engage and accept changes if they understand the reasons behind them.
Few employers have the resources to handle benefits communication themselves, and using enrollment firms only adds to their costs. Fortunately, these services are available at no direct cost to the employer from some benefits providers. Educating employees about the myriad benefits choices available to them and how to select the benefits that work best for their lifestyles takes expertise. Employers that want to outsource this service should consider vendors that take a personal approach to benefits counseling. Employee satisfaction rates with this type of service can be impressive. In fact, 97 percent of employees in a post-enrollment survey by Colonial Life in 2013 say one-to-one benefits counseling improved their understanding of their benefits, and 98 percent say this type of communication is important.
Spruce up your benefits package with voluntary plans.
Perhaps you added a voluntary product to your benefits plan years ago. Or maybe you’ve considered doing so but haven’t taken action yet. Voluntary benefits offer a number of tried-and-true advantages that can make your benefits package fresh and attractive.