The popularity of voluntary benefit offerings continued to grow this year as employers seek solutions for employees strapped by rising healthcare costs and, especially this year, increased financial burdens.
Earlier this year, an EBA survey about voluntary benefits asked benefit advisers to identify the voluntary products most coveted by their client base, and traditional voluntary benefits fared well, with 81% saying dental benefits are in high demand, 59% saying vision is and nearly half (49%) saying short-term disability is in high demand by employers.
Yet, while these standard voluntary benefits remain popular, the survey showed employers and employees are increasingly asking brokers about other worksite voluntary benefits, including cancer and critical illness — a trend benefit experts confirm.
“We see our brokers primarily selling critical illness, accident, hospital indemnity and medical gap,” says Rob Shestack, senior vice president and voluntary national practice leader at AmWINS Group. “These four programs are continuing to gain more popularity. We are also seeing telemedicine, ID theft gaining momentum, and a new program called wage secure, which is unemployment gap insurance.”
More than half (62%) of brokers surveyed by EBA say critical illness insurance is in demand by employer clients, and 25.5% say it’s in high demand. The employer demand is similar for cancer insurance, with 62% of brokers saying cancer insurance is in demand by clients and 21% saying it’s in high demand. One-third of brokers (36%) say hospital insurance is in high demand by employers, while 30% say accident insurance is.
“As employees face higher out-of-pocket medical costs and greater financial exposure from a serious illness or accident, the worksite supplemental health benefits — hospitalization/hospital indemnity, accident, critical illness — are finding a lot of favor with brokers, employers and employees,” Nelson Griswold, president of Bottom Line Solutions Inc. and an EBA columnist, says about the survey’s findings. “As deductibles and an employee’s share of co-insurance increase, it just makes sense to provide voluntary policies that pay cash to the employee when they have medical expenses. Also, worksite voluntary STD is becoming more popular as employers drop their employer-paid group STD plan.”
“Even though employees are paying for voluntary benefits, they consider them valuable offerings because they can choose what they want and customize their benefits package for their particular needs,” says Elizabeth Halkos, chief revenue officer of the Atlanta, Ga.-based benefit company Purchasing Power.
“There’s no doubt voluntary benefits are a mainstay in the benefits package, and we’ll see more focus on this in the coming year,” she says.
A more holistic approach to wellness this year and next means financial education and financial wellness products, such as financial counseling, employee purchase programs and even loans will all be in the mix, she says.
Linda Keller, Hub International's EVP and West Region Employee Benefits Practice Leader, agrees, saying, a lot of organizations are providing financial tools to help employees get out of debt, make purchases and alleviate financial stress.
She says employers are also focusing more on some other services that can be provided to employees, such as legal products and identity theft.
Purchasing Power’s Halkos says another trend for 2016 in the voluntary benefit space is increased customization.
“Carriers, brokers and employers will drill deeper into how employees buy voluntary benefits. Just as the consumer product market studies consumer buying patterns, the non-insurance voluntary benefits industry will look closer at how employees buy benefits,” she says. “Going beyond the usual demographics of age, sex, income and education levels, now they will look at factors such as lifestyle, housing patterns, and more.”
Data analytics she says are also being used to help companies discover how all of their employees want to engage in the process of first learning about, and then enrolling in, both insurance and non-traditional voluntary products and services.
This trend will increase in 2016, she says, as will the use of benefit portals and enrollment platforms to increase employee engagement.
“In addition to simplifying administration for employers, benefit portals and enrollment platforms improve access for employees. With more voluntary benefits being offered to satisfy the needs of a diverse employee population and offset coverage gaps, the use of technology-enabled benefits education and decision support tools will increase dramatically to help employees navigate as well as understand benefits offerings,” Halkos says.
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