In the employee benefits world, a significant amount of employee benefit programs have a January 1 effective date. This presents a challenge for introducing new voluntary benefits in several different ways. Open enrollments are time-consuming, brokers and consultants are resource constrained, and the year's end is stressful, both professionally and personally. This can reduce the enthusiasm of a firm that wants to introduce something new during this time. The other complicating factor to introducing new employee-paid benefits exists on the employee level. Contribution increases to medical and other benefit plans absorb the employee dollars that could be used by employees to pay for benefits of their choosing via payroll deduction.
There are several advantages to brokers and consultants in introducing the concept of adding voluntary benefits off-cycle. The staff in the benefits department is not as pressed for time and may be more willing to take on a new project. The brokers and consultants now have the resources to devote to making the new product enrollment easy. Additionally, even if employees have an increased contribution to their benefits, they can adjust to their new take-home pay and may have an easier time deciding that they can allocate a portion of their paycheck to pay for a voluntary benefit program.
Off-cycle additions of voluntary benefits can benefit the employee, the employer's benefit staff, and the incumbent broker or consultant. If you are a broker or consultant, start having these conversations with your clients today, or you may find that you're playing catch-up to someone who already has. Voluntary benefits are becoming more and more of a competitive space. It makes sense for an incumbent broker to bring this up at mid-year review to ensure a complete benefit plan for their client.
Meet the need
Why would employees appreciate having these programs implemented now (assuming mid-cycle) instead of waiting until next year? Think about the trends that we've had for many years with increasing deductibles and other out-of-pocket costs. An employer may elect to introduce an accident plan, a critical illness program, and/or a hospital indemnity program. These can go a long way to filling in some of the gaps for employees who feel that their health plans are not what they used to be or leave them open to an uncomfortable level of exposure. There may be more time for employee education with an off-cycle enrollment.
Additionally, recent statistics have shown that as many as half of employees are living paycheck to paycheck. Adding a voluntary short-term disability program can make a significant difference to someone without enough savings in the event of a disability if there is no employer-sponsored disability plan in place. When it comes to voluntary short-term disability programs, an employer may also reduce their potential liability versus having a salary continuation program.
Think for a moment about why an employer would look at adding a payroll deduction voluntary benefit program in the first place. It can help round out a benefit program to attract and retain talent and create goodwill with existing employees. This can benefit everyone and now is the time to speak with clients.
Toth has been in the employee benefit business for more than 20 years and is founder of VoluntaryBenefitPrograms.com. Reach him at (800) 579-7731 or Peter@voluntarybenefitprograms.com.
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