Many employers offer voluntary benefits to supplement their core benefit plans. Supplemental insurance plans appeal to the changing and diverse workforce that has come to expect a comprehensive employee benefits package. To stand out in a competitive job market, employers are offering more choice and flexibility than ever before. Employees are responding by personalizing benefit programs to fit their needs.
According to a recent Private Exchange Research Council (PERC) study:
- 31% of employees buy 1-3 voluntary insurance products through their employer.
- 40% of employees buy 4-6 voluntary insurance products through their employer.
- 29% of employees buy 7 or more voluntary insurance products through their employer.
Four Voluntary Benefits Groups
Employees appreciate supplemental health and financial plans because they are convenient and flexible. Most are paid through payroll deductions and some even go with the employee if he or she changes jobs. When a claim is made, voluntary benefits are generally paid directly to the employee to use in any way they choose.
Historically, life and dental insurances are the most popular voluntary plans chosen by employees. Here’s an overview of supplemental insurance products grouped by category.
- Health
- Vision insurance
- Dental insurance
- Accident insurance
- Critical illness insurance
- Hospital indemnity insurance
2. Lifestyle
- Disability insurance
- Legal
- Financial counseling
3. Security
- Life insurance
- Travel insurance
- Identity theft protection
4. Personal
- Discounted merchandise
- Automobile, homeowners or pet insurance
- Concierge services
- Umbrella insurance
Voluntary Benefit Trends
A recent survey conducted by Willis Towers Watson, found the majority of employers offer voluntary benefit options to:
- Enrich existing core benefits by offering more personalized options
- Appeal to a multi-generational workforce
- Support employee financial well-being
- Attract new employees
- Retain current employees
Those surveyed believe offering supplemental products will continue to be an important component in attracting and retaining employees. Two emerging trends support employee desires for financial well-being.
- Student loan repayment programs
a. Employer contributions for student loans
b.Refinancing
c. Consolidation
d. Counseling for refinancing or consolidation - Employer-paid voluntary coverage
Although few of those surveyed are currently offering employees these options, many say they may consider doing so in the coming years. Other options expected to attract more attention in the future include:
- Identity theft protection (36% offer today, 63% considering or planning to add by 2021)
- Pet insurance (34% offer today, 57% considering or planning to add by 2021)
- Long-term care Insurance (16% offer today, 33% considering or planning to add by 2021)
- Critical Illness Insurance (43% offer today, 71% considering or planning to add by 2021)
- Accident Insurance (37% offer today, 58% considering or planning to add by 2021)
- Hospital Indemnity Insurance (24% offer today, 50% considering or planning to add by 2021)
Overcoming Voluntary Benefit Administration Challenges
On the surface, it seems easy to offer voluntary benefits because, unlike health insurance, they don't require an employer contribution. However, the survey results show 78% of employers identify “administrative burden” as their main obstacle to offering supplemental plans. Technology is making enrollment and other administrative tasks more efficient. However, some employers still struggle to find time to manage voluntary benefits. Others don’t have the deep expertise needed to research carriers and maintain compliance.
When you outsource benefits administration to a PEO, you can save money through carrier incentive programs, alternate funding and MEC plans. Certain benefits provide tax advantages and are tax-deductible. PEOs help manage employee benefits by:
- Reconciling bills and providing timely payment to carriers
- Offering eligibility notifications for adding newly hired employees
- Processing employee enrollment, life change and termination requests
- Managing escalated billing, claims and service issues
- Having a dedicated, knowledgeable team to assist with carrier communications
- Providing online benefits enrollment
At FrankCrum, our Benefits Specialists will work with you to customize the best employee benefits package for your business within your budget. We handle everything from benefits selection, to enrollment and daily administration. Call 1-800-393-0815 and select option 8 or email benefits@frankcrum.com to learn more.
