With looming changes from health care reform on the horizon and increased cost-shifting to employees, voluntary benefits emerge as a bigger player in the benefit programs of the future.
According to Employee Benefit News, 2012 promises to be a huge year for voluntary benefits, according to Mark Roberts writing for BenefitsPro. Roberts argues that anyone who wants to protect themselves from runaway medical charges or unexpected health care bills needs to consider the following.
As employees take on more responsibility for paying for health care, voluntary benefits can provide much-needed additional coverage. Here's Roberts summary of key trends to help employers plan their voluntary benefits strategy going forward.
- Cost-shifting: The move toward employers shifting more health care costs on to employees is helping drive voluntary benefits sales. Employees need greater options, which is exactly what voluntary benefits provides.
Voluntary Benefits Basics
Voluntary benefits are insurance products that employees may choose to purchase through their companies at rates that are lower than they could get on their own. A few examples of voluntary benefits are dental, vision, life (mostly term), accidental death and disability, disability (short and long-term), supplemental health (i.e.- specified disease, critical illness, hospital only, etc.) and cancer insurance. Many employers offer voluntary benefits because they allow companies to provide a more robust benefits package at no cost to them.
Additional Voluntary Benefit Offerings
Typical examples offered through a voluntary benefits plan include: gym membership, retail vouchers, CDs, DVDs, travel insurance, holidays and travel, entrance to theme parks and other attractions, cinema and theatre tickets, and car parking.
In addition to employer cost-shifting health care refom is causing consternation among employers and the industry. Roberts sites the following from a recent Colonial Life survey, which shows employers are taking three concrete actions to deal with this double whammy:
- 51% are increasing their health insurance premiums.
- 48% are increasing employees' health insurance deductibles or co-pays.
- 49% are adding voluntary benefits.
So yes, voluntary benefits will be on the forefront this year but I'd aappreciate your thoughts, as always.
Comments
Hello Michael,
I am inclined to agree with you. When an employer enters into fully insurance health insurance products they then subject themselves to pay at least 50% of the premium and they must meet other stringent underwriting rules such as participation requirements of 70% or more. For most employers they either feel they can no longer afford the cost or administrative hassle of adding or keeping heath insurance.
Right now the best way for an employer to bring value added benefits to their employees and reap increased productivity, morale, reduced absenteeism and employee turn over is to bring in a bundle of affordable voluntary benefits that can include dental, vision, chiropractic/acupuncture, short/long term disability, hospital/accident/specified illness indemnity products and employee perks (discounts) as well.
In the end there is no cost to the employer. As a matter of fact, the employer most often experiences a savings in FICA and other payroll related taxes while enjoying cost savings in turnover and productivity of the workforce.
It really is a win win win situation. The employees, employer and voluntary insurance community benefit in the end.
For employers that either want to lower their current health insurance coverage or drop it altogether, bringing in voluntary benefits is a very good idea. For those employers that have not been willing nor ever plan to get into the full health insurance market, it is the right solution for them as well.