You’re working hard to provide your employees with best-in-class benefits while maintaining costs. This often comes with difficult decisions and a search for alternatives. To top it off you want to boost employee morale and attract top talent. Many Human Resources professionals are looking for ways to compensate for rising medical costs, while accommodating the multi-generational workforce with a diverse employee benefits package. The employee population is more diverse and more educated than ever before, and they are demanding more choice. Based on the 2016 EBRI/Greenwald & Associates Health and Voluntary Workplace Benefits Survey, 82% of employees say that having a choice is of high importance.
There is no silver bullet, but the most common theme among the best-in-class companies is offering voluntary benefits to their employees. The term “voluntary benefit” has evolved over the last decade to include a full suite of insurance and work/life products such as accident, critical illness, hospital indemnity, dental, vision, auto/home, pet insurance, vacation perks, discount programs, student loan assistance, and more.
Initially, these benefits were designed to solve for gaps within medical plans -- to help pay for out-of-pocket medical expenses such as co-pays and deductibles. There has been tremendous growth in this product segment, as high-deductible health plans are becoming the norm in companies (creating more out-of-pocket expenses for employees). When these products are offered through the workplace as part of the overall benefit plan, there are additional advantages because employees can purchase them at group rates, with little to no medical underwriting, and there is no cost to the employer to offer them.
The marketplace is also seeing the emergence of new voluntary products such as pet and legal insurance, identity theft protection, student loan assistance, and discount programs. This tells us that employees value a range of voluntary benefits, that solve for short and long term financial protection as well as lifestyle needs. In turn, there is also a positive impact and some hidden perks for the employer.
When evaluating offering such a program, here are four employer perks to consider.
1. Increased employee satisfaction
There are a myriad of industry studies that show that the more an employee understands their benefits, the more they are engaged and satisfied with their overall benefits package. Helping employees to understand their benefits is the number one way to increase employee satisfaction. This seems simple, but with multi-generational workforces, an effective communications campaign can be complex and costly. According to Unum’s Employee Education and Enrollment Survey, 81% of employees who rated their benefits education highly also gave high marks to their employers. Although it requires a little more work to educate employees on all the benefits available to them, it’s a great investment in time relative to employee satisfaction and retention.
If you lack the resources or the budget to educate your employees about voluntary offerings the insurance carriers can help. Most will provide communication support and/or will budget to assist in your engagement efforts. It is important to drive strong participation in these products to ensure that they have a varied risk pool. The more people enrolled, the more stable the rating of the benefit premiums will be.
2. Controlling Health Care Costs
In 2017, workers’ wages increased 2.3%, but the average health insurance premiums grew 4% for single employees and 3% for families.3 As health care costs continue to exceed the rate of inflation, organizations are seeking ways to reduce overall premiums by incorporating some level of a high-deductible health plan (HDHP) and improving the overall health of their employee population. While HDHPs may lower the overall medical premium, there is a cost shift to the employee with more out-of-pocket costs to cover the high deductibles in these types of plans.
With 81% of covered workers having an average medical plan deductible of $1,505, products like a Hospital Indemnity plan can give critical financial support to employees who have been hospitalized.3 Having a well-designed medical plan, coupled with the appropriate mix of voluntary benefits can reduce the employer’s overall medical plan premiums while helping to ease the employee’s financial burden.
But how do these benefits play a role in improving employee health or helping to catch a critical illness early for a better outcome? While most employers urge employees to get their annual physicals, what if they could pay employees to do so? Accident and critical illness plans, can include a $50 to $200 wellness benefit, payable to the employee for getting their annual wellness exams. With preventative care covered at 100%, or at no cost to the employee under their medical plan, the payout is a direct incentive for employees, with the added benefit of seeing a doctor on a regular basis, preventative care, and catching potential health risks early.
3. Increased Productivity and Morale
An unexpected accident or illness can lead to loss of productivity and revenue to the organization, as well as a loss of income for the employee. Accident, critical illness, and disability insurance are essential to getting employees back to work quickly. Whether it is job, family, or financial stress, employee morale has never been more important. Many plans include additional tools such as an employee assistance programs and medical bill support to help employees when they need it most.
Research shows that publicly traded companies with highly engaged workforces outperform their peers by 147% in earnings per share.2 The MetLife 15th Annual Benefit Trends Study, also reports that when employees feel financially secure they are not only more productive, but they have stronger social relationships and work longer hours. Providing access to these types of benefits is a great value proposition for an employer and there is typically little to no cost to the organization.
Each generation of the employee workforce has unique needs and developing the right offerings is key to building a strong benefit portfolio. Loan debt is the number #1 stressor for Millennials and 43% of Americans expect to postpone their retirement due to their financial situation4. Whether it is adding financial education, discount programs, student loan assistance, or other medical gap benefits, it is essential that an employer understand the needs of their population as well as how to communicate these offerings.
4. Reduced Employee Stress
In today’s workforce, employees are looking for better work-life balance. They change jobs more often and expect employers to provide more value at work. In this competitive market, best-in-class employers are focused on their employee’s immediate needs for managing work-life stress and anxiety to attract and retain top talent.
Offering a benefit portfolio that encompasses a breadth of options that are tailored to a multi-generational workforce is not only a smart attraction and retention strategy, but also shows employees that their employee benefits are tailored to meet their needs.
There is no doubt that voluntary benefits are here to stay, and the portfolio is quickly expanding. With high-deductible health plans on the rise along with other financial stressors, employees are looking to their employer for options. When designed appropriately and in conjunction with your current benefit program, voluntary benefits can be one of the most power offerings of all.
1 EBRI/Greenwald & Associates Health and Voluntary Workplace Benefits Survey (WBS) (2016)
2 Pricewaterhousecoopers, The keys to corporate responsibility employee engagement (2014)
3 Kaiser Family Foundation and Health Research & Education Trust, Employer Health Benefits, 2017 Annual Survey (2017).
4 Student Loan Hero survey (2017).