Following the Eastbridge Consulting Group report earlier this year that showed a decrease in voluntary benefits sales during 2010, it has been refreshing to see that, according to recent insurance carriers' annual surveys, employees' interest remains strong.
However, I couldn't help but notice a difference in employers' and employees' perceptions of voluntary benefits.
In the MetLife 9th Annual Study of Employee Benefit Trends, 52% of employees say they are interested in a wider array of voluntary benefits that they can choose and pay for on their own. However, only 17% of employers indicate that voluntary benefits are a very significant part of the company's benefits strategy.
In Prudential's Fifth Annual Study of Employee Benefits: Today & Beyond, 52% of employees say they are interested in a wider array of voluntary benefits that they can choose and pay for on their own, but only 21% of employers consider increasing participation in voluntary and/or optional plans a top benefits objective.
These statistics illustrate that employees appreciate and want their employer to offer voluntary benefits programs, while employers seem to view voluntary plans as "ancillary offerings" that do not garner as much significance as their other benefits. One possible explanation for the discrepancy is employers are viewing voluntary benefits as just another administrative burden. However, if they work with a third-party provider that manages voluntary benefits administration, they can offer a menu of options without the headaches.
— Mantz (firstname.lastname@example.org) is vice president of sales at The Farmington Company.
Comments from the Be Advised blog
I agree. I offer VEB, and I always see more excitement from the EEs when they are presented our benefits. ERs need to realize that they aren't living the lives of their EEs, so why are they making benefit decisions for them? Let the EE's have other options to fill their particular needs. Posted by: Lori P
EB brokers and consultants need to put more focus on gathering employee feedback and making that feedback more accessible to and visible by the employer and the HR function. Using social networking might be one mechanism. Employers may not be aware that agents do not call on middle-American workers. But they want to buy insurance. Access to insurance is narrowing to the online sources and VB. The employer that offers robust VB is filling a crying need of their employees. Posted by: Mike DH
After 30 years heading up risk and benefits management in major corporations, I can tell you that administrative burdens are always at the top of the list of concerns on the inside. Those issues are always on my mind when dealing with companies large and small. How does my product offering help the ER and the EE and how can implementation and administration be simplified? Start your approach with those issues in mind, and the sales process is made much easier. Posted by: Dave SC
While not a proponent of the PPACA, I do favor a solution that moves the distribution of health insurance out of the employer arena. It has been all-consuming for employers in so many ways. With that said, employers should be able to offer a comprehensive platform of voluntary benefits without too much administrative burden regardless, but many don't see it that way. The wait is almost over to see how this new landscape plays out. My crystal ball says the individual mandate is struck down but the exchanges stay. I don't know how the lost mandatory funding is made up, but the purchasing venue will change for health insurance. Voluntary benefits should reach a much higher level of prominence as a result. Posted by: Greg M
While our life/AD&D program is totally voluntary, I hesitate to offer other types of voluntary benefits, such as cancer and critical illness plans or supplemental STD, for a couple of reasons. First, our employees are required to contribute approx. $33/week toward health benefits. I want to be sure that EEs take this coverage if needed, rather than try to substitute these "catastrophic" plans. Second, EEs need to understand benefit levels, not simply be motivated by the fear of a dreaded disease. Finally, since our company-paid STD has a carve-out for other payments, EEs would lose money if they had another disability income source. Nevertheless, I will consider surveying employees to determine their thoughts and preferences regarding voluntary benefits. Posted by: Gregg Danzer
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