Today many employers are rethinking the composition of their benefit packages and choosing to offer more voluntary options. This decision is based on many factors, including rising healthcare costs, and changes brought about by healthcare reform.
According to recent research from Eastbridge Consulting Group, there is an increase in employee benefit ownership. Smaller employers with 10-100 workers saw a large increase in voluntary plan ownership, jumping from 37 percent in 2013 to 51 percent. And employers with 50-100 employees saw more interest in ownership over the smallest employers.
Which voluntary product was most commonly owned? Dental insurance, with vision insurance following closely, along with accident insurance.
On the other side of the court, Eastbridge notes that 70 percent of brokers report an increase in the number of voluntary cases written annually over the past three years, with a quarter of those brokers describing seeing a significant increase. Since 2014, brokers who say they actively sell voluntary products has risen from 19 percent to 35 percent. Less than 10 percent of brokers say they aren’t offering voluntary benefits at all.
The five most popular voluntary products currently being sold by brokers are (in no particular order):
• Dental Insurance
• Short-Term Disability Insurance
• Term Life Insurance
• Critical Illness Insurance
• Accident Insurance (not AD&D)
Why Voluntary Products?
One of the reasons that voluntary benefits are attractive to employers is because they offer an effective way to continue to provide access to valuable benefits without the concerns of budget restrictions. With voluntary plans, employers can enrich their overall benefit packages, which in turn enables them to attract top talent and increase overall employee retention.
According to a recent study by the Employee Benefit Research Institute (EBRI), employees view many advantages to voluntary benefits, with the main advantages being cost and choice. Bottom line: employees want access to these solutions.
In the 2015 EBRI study, 50 percent of workers surveyed were highly confident that purchasing voluntary benefits through the workplace would cost less than purchasing on their own. Close to 80 percent considered this lower cost of purchasing through the workplace to be a moderate to strong advantage.
Choice and flexibility are as important as cost to employees. 79 percent of workers surveyed considered the ability to choose which benefits they want to purchase to be a moderate or strong advantage. Half of workers considered it to be highly important to offer a choice that included disability and life insurance plans.
The Future of Voluntary Products
This upward trend for voluntary benefits appears steady. BenefitsPro points out in a study that many employers with 10 to 100 employees are interested in offering more voluntary benefits in the future. Around 20 percent of employers with 50 to 100 employees said they would be interested in offering a new voluntary benefit to their workers, or moving benefits to voluntary versions. Within the smallest groups, those with 10 to 50 workers, 11 percent of employers said they would add a new voluntary benefit, and 15 percent said they would convert a benefit to a voluntary offering.
U.S. Voluntary sales were $6.89 billion in 2014, according to Eastbridge data, and one of the top five locations for voluntary sales for both 2013 and 2014 was California.
Contact your Sales Representative to discuss enriching the benefit packages you offer with voluntary solutions from CoPower today.