A low employer cost solution to customizing your employee benefits plan.
First and foremost, the basics. Voluntary benefits are any perks provided by an employer that employees may choose to participate in or decline. This includes life, disability, critical-illness and accident insurance, ID theft protection, pet insurance, legal services, and financial counseling.
A recent survey revealed that 70% of employers believe their current benefits offering meets their employees needs, but only half of the employees actually believe that notion (https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/voluntary-benefits-results.asp). This is a red flag for an employer and broker because it means their plan needs revaluating or their messages are not marketed correctly. However, there is always a cost to both of those things and they may not be attractive, voluntary benefits may be a great solution.
Personalization & Filling the Gaps
Voluntary benefits allow companies to tailor their benefits package and cover the gaps. When you are creating your menu for the voluntary benefits, the biggest thing to consider is your companies demographics, such as age, income, and marital status. These are important deciding factors because the higher the disposable income the likelihood increases of employees more interested in increasing their healthcare spend. Another example is hospital indemnity plans, these plans are more attractive to those individuals who are older because they are more likely to use it and see the value in it.
Employee benefits are one of an organizations three highest overhead costs and the price keeps increasing each year. With increasing costs and little to no flexibility in plan designs, employers are stuck in a downward spiral of providing their employees with less options, more gaps, and higher costs. A great solution to both minimizing or controlling the costs and filling the gaps of insurance is by adding the voluntary benefits. It places the decision in the employees’ hand, again customizing the experience, and provides a solution to that gap in the policy.
Cost Effective & ROI
Group Voluntary Benefits come at little to no cost to the employer while encouraging employees to use if they see the value, place it in the user’s hand. Group term life insurance, HSA contributions, and anything else under Section 125 of the IRS code may be deducted pretax. Again, saving money by lowering an employee’s taxable income. Another cost-effective bonus is that by making them group voluntary benefits instead of individual, it saves time and money for your employees. Individual is more expensive, and it takes more time, time that your employees could spend working. The ROI is not only the dollars but also streamlining your benefits through a singular platform and then marketing as such to your employees so that they can use that time for more productive measures.
The biggest struggle with Voluntary Benefits is participation and increasing this is key to receiving ROI on your VB. A good way to market them is by presenting them as part of the overall benefits the organization offers, to enhance the perceived value of those benefits by employee. This should be strategically communicated during enrollment period as well as distinguishing between core employer-paid benefits and employee-paid voluntary benefits.
Please reach out for any further information!
Eleanor Schroeder
Posted by John Hansbrough in Uncategorized