Organizations are struggling to control the rising cost of healthcare. In fact, according to the Society For Human Resource Management, we’ve seen the cost of employee benefits rise by 24% since 2011. Unfortunately, health premiums are expected to rise another 5.5% this year! For large organizations, that means costs could surpass $14,000 per employee in 2018. This is a significant problem, especially as it relates to recruitment and retention efforts. Employers can’t afford robust healthcare packages anymore, but they also can’t afford not to offer an attractive program. More than 60% of employees believe that their benefits are just as important as their salary.
One way to control costs without compromising the level of support employees receive is by offering voluntary benefits. Voluntary benefits (a.k.a., “supplemental Insurance”) are just like traditional benefits, except they are fully or partially paid for by the employee. In other words, voluntary benefits allow employers to offer a more robust benefits package, but at a lesser cost or no cost at all.
To qualify for voluntary benefits, your organization must employ a certain number of eligible employees. But voluntary benefits aren’t just for large organizations with substantial workforces. Some plans offer benefits for as little as just a couple employees.
Common Voluntary Benefits Include:
- Vision Insurance
- Dental Insurance
- Accident Insurance
- Critical Illness Insurance
- Hospital Indemnity Insurance
- Disability Insurance
- Financial Counseling
- Life Insurance
- Personal Travel Accident Insurance
- Identity Theft Protection
- Discount Merchandise
- Automobile, Homeowners, or Pet Insurance
- Concierge Services
- Umbrella Insurance (extra liability insurance to protect against lawsuits, claims, etc.)
Why would employees see paying for their own benefits as an advantage? Because they gain the freedom to elect only the benefits they need instead of having to join a structured company plan with benefits they don’t need. Plus, they often get better rates through voluntary benefits because the cost is based on group rates instead of individual. With voluntary benefits, employees have a broader spectrum of available support that might otherwise be missing from a structured healthcare plan. Voluntary benefits can also be deducted from payroll, which makes the payment process seamless. In some cases, employees can even use pretax dollars to pay for certain voluntary benefits. Lastly, many voluntary benefits are portable, which means that if an employee changes jobs, their coverage may not be disrupted (provided they maintain payment of premiums).
Unfortunately, many employers aren’t seeing high enrollment rates for these types of plans. This is largely due to a lack of communication and education. Employees need a better understanding of exactly how these plans work, how they will impact an employee’s family, and what the benefits are. Otherwise, healthcare plans sound like a lot of insurance jargon, which can be confusing and intimidating. Try incorporating video into your communication strategy to clearly explain how voluntary benefits work. At SBS, we are all about innovative ways to share information with employees. Video is a great way to simplify the message and make employees feel good about the decisions they make.
How To Qualify
Voluntary Benefits can be sourced from private exchanges or through insurance agents and brokers. Part-time employees can also take advantage of voluntary benefits, provided they meet eligibility criteria, including a minimum number of work hours. And many voluntary benefits extend coverage to your employees’ spouse and eligible dependent children. Talk to your employee benefits broker today to learn more about how voluntary benefits can support your workforce and business.
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