Employers to Ramp Up Voluntary Benefits Offerings

As open enrollment season approaches, employees likely will see that they have more voluntary benefit options than in previous years, a survey by Colonial Life concludes. The insurer’s poll of more than 750 HR managers and benefits administrators found that almost half (49%) expect to add voluntary benefits to their plans within the next year. Employers were asked about their employee benefits packages and benefits communication efforts.

The increasing shift toward voluntary is part of a larger trend among employers, as the survey reveals other changes employers plan to make to their benefits plans include:

–Increasing employees’ health insurance premiums (51%).
–Increasing employees’ health insurance deductibles and/or copays (49%).

“Not surprisingly, employee benefits have taken a hit as companies wrestle with the rising cost of providing health coverage to their workforce,” says Randy Horn, president and CEO of Colonial Life. “Offering voluntary products that complement core benefits can help companies better manage their costs. Voluntary plans can also give employees a convenient and affordable way to protect their families and lifestyles.”

Obviously, effective benefits communication is linked to the success of all programs, particularly voluntary offerings.

Virtually all employers (99.6%) in the Colonial Life survey agree their employees need guidance to make sound benefits decisions and education to help their workers understand changes in their benefits program. Yet less than a quarter of employers (23%) believe their company’s current benefits education efforts are very effective.

“Employers see a need for more and better benefits education and communication,” says Horn. “Providing personal, one-to-one benefits counseling can close the communications gaps that often hinder employees from fully understanding and appreciating their benefits.”

LIMRA data more cautious

A recent LIMRA study, meanwhile, reveals that 30% of U.S. employers with 10 or more employees are considering offering new voluntary benefits to replace existing benefits that are paid entirely or in part by the employer.

This would potentially affect between 19 million and 45 million employees over the next two years,  LIMRA estimates. Interest in voluntary is particularly high among large organizations (1,000 or more employees); half of these firms show interest in transitioning their existing benefits to voluntary.

The survey, “Voluntary Worksite Benefits: Penetration and Market Potential,” suggests the two benefits most likely to be shifted to voluntary are medical and prescription drug plans, which could boost interest in discount programs.

“Of those employers considering adding a voluntary major medical or prescription benefit, the study revealed that three of four may be adding the voluntary benefit to replace their existing medical or prescription benefits,” LIMRA states.

“Currently, 57% of U.S. employers offer voluntary benefits,” said Ron Neyer, assistant research director at LIMRA. “Assuming that most employers that express a likelihood of adding a new voluntary benefit in the next two years follow through, this will provide a new employee-pay-all option to as many as 46 million employees.”

Reprinted from Employee Benefit News

Pin It on Pinterest