The Time is Right for Voluntary Benefits
Current trends and a competitive labor market have definitely moved voluntary benefits into the spotlight. With 57 percent of all women participating in the labor force, there are more women working today than in the past, according to the U.S. Bureau of Labor Statistics. Also, about 40-50 percent of married couples in the U.S. divorce. More single parents need good benefit plans. Long-term employment is becoming the exception; employees are mobile, making employers who offer additional benefits stand out. Increasing diversity in employee needs means they are willing to pay more in order to have a choice. With this in mind, voluntary benefits can be convenient and appealing to these groups.
Voluntary insurance products are sold to employees at work through payroll deductions. Typical voluntary benefits include life, disability, long-term care, dental, mini-med policies, cancer or critical illness coverage, accident policies, home, and auto coverages. Discounted non-insurance products can include discounted legal services, pet insurance, identity theft protection, Section 529 savings plans, adoption benefits, and educational assistance. Overall, voluntary benefits allow flexibility for employees to decide how to spend their discretionary income on additional products and services that fit their needs.
There is definitely a greater interest in voluntary benefits by both employers and employees than in the past. Medical costs are on the rise; in the last 10 years, family coverage has increased 20 percent since 2011 and 58 percent since 2006—with an average premium of $18,764. Higher healthcare costs force employers to choose alternative options and to shift more of the cost to employees. Supplemental insurance can be offered with no additional costs for the employer.
The competition for high-quality employees is tight. Good benefits are key in recruiting and retention. Employees see advertising for certain benefits, get curious, and inquire about them. A wide array of benefits gives employees more control and more options. Supplemental insurance may improve employee morale. In addition, employees can receive tax benefits from them; some premiums are deducted pre-tax, resulting in cost savings.
The information provided in this article is to be used for informational purposes only and is not intended to replace the advice of an insurance professional. Check back with us soon as we offer more advice for employers for implementing voluntary insurance products. If you are interested in learning more about these benefits, please contact our Employee Benefits Management Group (EBMG) here or by calling (800) 242-4433.