We’re all familiar with the traditional standard ancillary benefits offering—dental, vision and life insurance plans. Ancillary benefits are offered through group insurance, either paid 100 percent by the employee or shared contribution with the employee and employer. These are still valued benefits, but today’s employee is looking for more in their benefits package.
This is where voluntary/worksite benefits come into play. Voluntary benefits, or employee-paid benefits, are offered by an employer to their employees as a solution to meet the employee’s unique needs and fill potential gaps in their benefits coverage.
In recent years we’ve seen a slight shift from traditional ancillary benefits to the inclusion of voluntary benefits. Employers are still offering dental, vision and life insurance, but are also opting to provide more choice offerings when it comes to benefits.
Voluntary benefits tend to fall into four categories: Health, Wealth, Security, and Personal.
2. Critical Illness
3. Hospital Indemnity
3. Financial Counseling
1. Travel Accident Insurance
2. Identity Theft Protection
1. Discount on car insurance, homeowners, or pet insurance
2. Concierge services
3. Umbrella insurance
Offering voluntary benefits has several positive outcomes for employers which include little or no cost to the employer, an alternate way to control rising healthcare costs and the ability to attract and retain top talent. Voluntary benefits are a great way for companies to stand out and capture the best candidates in the workforce as well as enrich the traditional benefits offering. These benefits assist in targeting the needs of different generations who have differing priorities as they move through the stages of life.
Year after year the market has seen an increase in the demand for voluntary benefits. Research shows that voluntary benefit sales have grown every year since 2004. According to Metlife’s 9th Annual study of Employee Benefits Trends, published in 2011, 60 percent of employees say employee benefits offered are an important reason to remain with an employer and 52 percent are interested in having their employers provide a wider range of voluntary benefits.
Why do employees continually request these benefits?
1. Low-cost coverage
2. Pre-taxed premiums
3. Payroll deducted
4. Quick claims turnaround
Voluntary benefits are a cost-effective solution to help offset the out-of-pocket medical expenses and fill the gaps created by high deductibles and rising copays. Often, voluntary benefits packages reduce redundant costs by ensuring employees can personalize their benefits package. Instead of offering all employees a benefit that they don’t need, they can now tailor a combination of products to their specific needs. This ability to customize a benefits package results in increased group penetration.
Delivering these voluntary benefits has never been easier. Companies who specialize in benefits administration (BenAdmin), are leading the way in benefits transformation. BenAdmin products enable employers to offer a wide range of products coupled with a seamless enrollment process.
Brokers who are not offering voluntary benefits are at risk of not only losing revenue but also losing the customer to others who promote these offerings. The healthcare industry is a competitive space and brokers who stick with strictly medical benefits are probably feeling some competitive pressure. Competition among brokers will continue to grow every year as voluntary benefits grow in number and demand. Brokers who diversify their product offering are more attractive to potential clients. Offering voluntary benefits is a great way for brokers to supplement revenue in an era of compressed medical commissions.
So how can a broker get started on offering voluntary benefits?
The first step is to fully understand the vast range of products. This knowledge can be sought from carrier partners, fellow brokers, broker associations (such as NAHU), and general agency partners.
The next step is to find a trusted BenAdmin system. The benefits technology revolution that has come about in recent years has contributed to brokers being able to grow and maintain their book of business while also supporting their client’s needs. BenAdmin partners streamline processes and help connect carriers, brokers and employers. For employers, benefits enrollment and benefits administration is a top priority. Online enrollment tools make benefits selection easy for employees by using side-by-side plan comparisons, decision making tools, e-signatures, and real-time updates. Employers can use online tools to manage benefits and employee profiles, new hire and open enrollment capabilities, contribution amount management, in-depth reporting tools, flexible portal design and customizable interface, content management tools, and voluntary benefits such as dental, vision, legal assistance and veterinary discounts. The end-goal for employers is to find a solution to streamline the integration of all benefit offerings and administration.
As companies look for ways to attract and retain top talent, brokers need to provide solutions to enhance their clients’ total compensation packages. Brokers should be ready to offer a robust portfolio of voluntary benefits.
Win-Win for All—Brokers, Employers and Employees
Brokers benefit from supplemental benefits by increasing sales, commissions and satisfaction, offering their clients a no-cost way to expand their benefits offerings. Employers benefit by offering employees an attractive and diverse suite of benefits at no added cost to the employer. Employees benefit with the ability to shop and buy products from leading companies to enhance their coverage and meet their personal coverage needs.