The untapped opportunity in voluntary benefits
To people who are trying to pinch every penny from their paychecks, investing in benefits that are not major medical, dental, vision and even retirement can sound like an unnecessary expense. However, with proper communication from advisers about the financial benefits of voluntary products, employees will want to take another look at the value of what companies are making available to them.
“Voluntary sales are continuing to climb for the second consecutive year — by 6% in 2015,” says Jennifer Kischell, vice president of voluntary benefit delivery at MetLife. “Part of that is because of provided choice to employees.”
And there’s room for those choices to expand. For example, 65% of large employers offer no bundles of gap products, while only 8% off a max of three options, according to Benefitfocus’ 2016 report on the state of employee benefits. Of the 34% that offered at least one gap option, only 14% of employees actually enrolled in the benefit.
One way to address such low enrollment, says Cindi Van Meir, senior manager of product marketing at Benefitfocus, is to have constant communication throughout the year that allows employees to take in the information in short doses and improve comprehension.
“Think about communicating throughout the year,” she says. “As [employees] start to talk to their organization, from a HR benefits perspective, they come to expect hearing about their benefits and what’s coming up for the following year.”
A call to action
No matter what time of the year, there is room for improvement in voluntary benefits communication. Only one-third of employees find that their company’s benefit communications are easy to understand, whereas nearly half of employers feel strongly that their benefit communications are easy to understand, according to MetLife’s 14th annual Employee Benefit Trends Study.
“Employers should focus more on the call to action from their employees and less on the compliance detail,” MetLife’s Kischell says. “This is a shift for most of our benefit professionals who have traditionally focused on providing very detailed compliance-focused information.”
Both Kischell and Van Meir say that too much communication, however, can lead to employees tuning out all of the information. MetLife’s trend study says employees across generations find one-on-one consultations with enrollment representatives to be the most effective resource in helping them make benefit decisions.
“While it seems counterintuitive, especially for some of our younger generations, people are really interested in one-on-one consultations,” Kischell says. “So if an employer is suffering from low participation on one or two benefits, one of the questions we are going to ask them is, ‘Are you thinking about engaging in an enrollment firm that can get in there and have that one-on-one conversations either in person or over the phone?’”
Low enrollment in voluntary benefits could also be from offering the wrong benefits to the wrong demographic. “If you are a manufacturing versus a retail company versus a banking company, your needs may be different when it pertains to voluntary benefits,” Kischell says. “If you are offering a high deductible health plan, does it make sense to offer a critical illness and accident insurance as a voluntary benefit in order to supplement that out-of-pocket cost that employees may not be prepared to pay?”
Van Meir says one important conversation advisers need to have with employees is cash flow. “[Employers] need to be able to paint a picture for the employee about how their personal scenario might benefit from a certain mix of benefits,” she says. “A healthy millennial that is only going to the doctor for a wellness visit might be getting coaching from their parents to take a PPO because that is what that generation knows.”
Van Meir adds that educating employees on what is available could keep them from being over-insured allowing them to retain more money to use for other benefits, such as student loan assistance or gap insurance.