As employers in 2014 continued to shift rising health care costs to their employees, the importance of a well-rounded, comprehensive benefit package became increasingly apparent. This strategy more than ever includes a benefits package complete with voluntary benefit options.

“Employers and employees through our brokers are starting to really embrace voluntary and ancillary benefits as important and valuable financial mitigation products as higher deductibles, higher out of pocket medical plans are becoming more and more prominent,” says Les McPhearson, CEO of United Benefit Advisers.

In fact, 85% of small business employees consider voluntary benefits to be part of a comprehensive benefits program and 62% of workers at small companies see a growing need for voluntary insurance benefits today compared to years past, according to the 2014 Aflac Workforces Report for Small Businesses.

What’s more, nearly six in 10 (57%) small-business workers said they’re likely to accept jobs with slightly lower compensation but better benefits, the study found.

“Ensuring that employers understand the advantage of offering a wide range of benefits options, including voluntary policies, by talking to them about the bigger picture is a must,” says Matthew Owenby, vice president of Human Resources at Aflac.

Not only do brokers and agents need to educate employers about the importance of ensuring benefit offerings meet the needs of their workforce, “but they also need to explain why providing better benefits is beneficial for businesses as well,” he adds.

McPhearson agrees, saying that because voluntary products are frequently employee-paid, “employers can provide a greater value proposition to help employees create their own financial insurance portfolio.”

“I think that will continue to grow not just next year but beyond. As deductibles, higher co-pays and those cost shares continue to be paid to the member and the employee, voluntary benefits will play an increasingly valuable role in filling those gaps,” he says.

Business opportunity

The increased interest in voluntary benefits, of course, also provides a business opportunity for benefit advisers, agents and brokers.

All brokers are “seeing the impact of commissions being squeezed in the health care space, so they’re looking to broaden their service portfolio,” says McPhearson. “That really starts to expand to any number of areas, whether it’s voluntary and ancillary products, whether it’s retirement and financial planning or others.”

“We’re seeing a lot of that occurring today where firms are looking to provide a broader portfolio of solutions and services, rather than just being invested in health and medical insurance,” he adds.

Voluntary solutions “should be on your strategic planning horizon for 2015,” says Tinker Kelly, president of Voluntary Employee Benefits Advisors and an EBA Advisory Board member.

The need for voluntary coverages, such as supplemental life, cancer and critical illness, “will more than likely increase as the average American continues to struggle with finding ways to pay for their high deductibles and copays in the new era of the Affordable Care Act,” Kelly adds.

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