For those who may not have valued voluntary benefits prior to the pandemic, there has been a notable paradigm shift. Voluntary benefits are defined for a business as services or goods that an employer offers. These are typically offered at a discounted rate but are paid, either fully or partially, by the employee. They are sometimes also referred to as supplemental insurance or employee-paid benefits. The pandemic prompted more businesses to offer and/or expand voluntary benefits.
A recent Willis Towers Watson “Emerging Trends in Health Care Survey” demonstrated growing employer interest in offering voluntary benefits. The survey, conducted from February 23rd to March 12th of last year involved 238 employers, employing a total of 3.7 million workers. It found that 94 percent of those surveyed believe voluntary benefits are important to their organization’s employee value proposition. In 2018, only 36 percent held this belief.
While the study title may suggest that only voluntary healthcare benefits are being considered, there are products in other categories that are resonating with both employers and employees and for good reason. They range from vision, dental, accidental or critical illness insurance to identity theft and legal plan assistance. Understanding how voluntary benefits can help employers and employees may be a critical component to a company’s ability to retain and attract workers.
Meeting Critical Goals
Voluntary benefits enable employers to better serve their employees, while containing benefit costs. Consider today’s multi-generational workforces and the different needs of Baby Boomers and Generations X, Y and Z. Baby Boomers looking at retirement and concerned about increasing medical needs are more likely to care about permanent life, critical care and disability insurance, whereas Millennials may be more interested in portable term life insurance and accident coverage for their young families. Across other voluntary products, there are different life stage needs as well. Regardless of the generation, however, adding benefits can provide financial protections and promote increased wellness. A growing awareness of this has led to the expansion of voluntary products by employers. The Willis Towers Watson survey showed upticks in the percentage of employers offering different products. For example, accident was up by 28 percent, identity theft by 25 percent and critical illness was up by 19 percent.
Studies have shown that voluntary benefits also have an effect on employee satisfaction. A Corestream study found that 68.4 percent of employees felt that voluntary benefits influence their decision to join and remain with an employer. The same study also found that 45.7 percent of human resource professionals believe voluntary benefits help attract new employees, 58.9 percent said they helped retain talent and 43 percent said that they supported employee engagement. In addition to gaining employer-vetted insurance solutions and other voluntary products, employees also often benefit from better rates when products are offered at the worksite and have assistance available in understanding those products. This is essential, as unfortunately, there remains a high level of financial illiteracy regarding insurance.
To help ensure that their organizations and employees are best served, employers should strive to bring a full suite of voluntary benefits to their workplace and accompany that with product education both during enrollment periods and throughout the year. Voluntary product information should be readily available online and on mobile apps either through the company’s broker or insurance carrier. This will empower employees to become better educated and confident in their purchasing decisions.
Jeff Sammons is Western Regional Sales Executive at Amalgamated Life Insurance Company.