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industry trends is as much a sign of the end of the year as after-Christmas
sales and New Year's resolutions.
Although predicting the future is only
an educated guess, one thing is certain — voluntary benefits are here
Carriers, brokers, employers and workers all give a thumbs-up to the increased
flexibility and opportunities for cost control they bring to
Here is what may lie over the horizon
THE MARKET IS BULLISH
As a result,
the quantity and quality of voluntary benefits will continue to grow. Examples
of traditional voluntary benefits employers are likely to add include gap
coverage, short-term disability, cancer, critical illness,
prescription, dental, life insurance and hospital supplemental policies.
Brokers should make sure they have these products in their portfolios.
WELLNESS PROGRAMS GET FISCAL
understand that the size of an employee's waistline can correlate to
attendance, productivity and turnover. Many also are starting to realize the
link between the size of their bank account and job performance.
Smart employers are adding voluntary
benefits that can help workers reduce stresses associated with finances and
debt. These can include financial education, financial counseling, employee
purchase programs, parental leave, retirement
planning and even short-term loans under certain circumstances.
A-WEAR-NESS IS INCREASING
taking the guesswork out of employee wellness programs. Nearly two-thirds of
carriers surveyed expect wearable technologies to have a significant impact on
their industry, according to Accenture's annual Technology Vision
report. Fitbits and similar devices enable employees to quantify the results of
their effort, which both inspires them and provides employers valuable feedback
about the effectiveness of their programs. An increasing number of businesses
now subsidize the cost of wearable devices or set up payroll deductions to cover
ENGAGEMENT GOES HIGH-TECH
year-out, HR professionals cite employee engagement as one of their most vexing
issues. Traditional tactics are becoming less effective with millennial
employees, who often prefer voluntary benefit portals and enrollment platforms.
"Millennials get information on
their own," said Aprilyn Chavez Geissler, owner of Geissler Agency Inc. in
Albuquerque. "However, when it's time to purchase, they still want the
personal service and an advisor to help them. As a large demographic,
they are similar to the silent generation in that they think through their
purchases and do research on their own."
CRITICAL ILLNESS REACHING CRITICAL MASS
Critical illness insurance was once a
blip on the radar screen of voluntary benefits packages — but not anymore. It
is becoming an increasing popular option as the workforce ages and companies
reduce primary health coverage and shift the cost of primary medical onto
“Critical illness insurance is by far
the fastest-growing insurance product on the market," said Mark Randall, a
researcher for GoldenCare in Minneapolis. "Even though the market share is
still fairly small, it's a hot product. The bottom line is that every broker
should add this product to their portfolio.”
VOLUNTARY BENEFITS REDEFINED
One sure sign
of growing demand for voluntary benefits is the fact that many definitions have
become obsolete. In the past, voluntary benefits were limited to such
bread-and-butter options as dental or vision insurance. Today, however, they
are all about lifestyle benefits, such as health club memberships, legal
services or pet insurance. A good
working definition of a voluntary benefit is anything that can be deducted from
an employee's paycheck.
CONSUMERS DRIVE PLANS
consumer-driven health plan creates a win-win scenario. Employers hold the line
on costs, and employees pay only for the coverage they need and want. This can
mean a transition to high-deductible health plans and health savings accounts
or health reimbursement arrangements that help employees pay their
out-of-pocket expenses and allow them to retain unspent contributions.
TOOLS PROMOTE TRANSPARENCY
a double-edged sword: Employees can be overwhelmed by the voluntary benefit
options available to them, but they are also empowered to make smart choices.
Benefits providers, brokers and employers are providing user-friendly tools
that increase transparency. Studies show that this is especially important to
Fifty-two percent of millennials report
searching online for health or care-related information, and reliance on social
media, patient portals and performance scorecards is growing. One-quarter of
consumers say they have looked at a scorecard or report card to compare the
performance of doctors, hospitals or health plans, compared to 19 percent two
years ago. Among millennials who need medical care, scorecard use has grown from
31 percent to 49 percent.
THE DOCTOR WILL SEE YOU… ONLINE
a natural byproduct of increased telecommuting. The practice
is both a cost-effective option for employers and a perk for employees who are
paying more out of pocket for health care. On-call services can bring virtual
health care providers into the office with advice about preventive care and
ANALYTICS REDUCING GUESSWORK
involved in the benefits business knows that the industry is swimming in tons
of data. Innovative employers are putting this information to work to design
better plans that improve health care and reduce expenses. Claims data and
historical use patterns demonstrate how much employees can save on new plans by
making better decisions. This information also helps employers get a better
handle on plan costs, employee adoption and administrative efficiency.
NONTRADITIONAL BENEFITS BOOMING
Employees continue to express interest
in new, nontraditional voluntary benefits, and carriers are responding.
According to a study by Eastbridge Consulting, 13 percent of employees have
selected employee purchase programs; 8 percent have selected legal plans; 3
percent have selected identity protection; and 1 percent selected pet
insurance. The relatively low numbers reflect the fact that these options are
new, according to researchers.
These percentages are expected to grow.
Nontraditional voluntary benefits offer workers a way to obtain products and
services through convenient payroll deduction. Most nontraditional offerings
provide immediate, tangible benefits that can be used any time, unlike many
core benefits that employees need only when they are sick or injured.
CAREER DEVELOPMENT IS HOT
eager to improve themselves, especially if doing so is cost-effective.
Financial planning and online educational services, including college courses,
certifications and career development, are becoming popular. Look for more of
these, such as Graduate Management Admission Test prep and Graduate Medical
Education courses, to be added.
MINIMUM WAGE HIKES MAY SPIKE DEMAND
Although the drive toward a $15 per
hour minimum wage in some cities
has been controversial, it may have an upside in demand for voluntary benefits.
"With the California minimum wage
going to $15 an hour, those employees will have extra money to opt for more
voluntary benefits," said Wayne Sakamoto, owner of Health Insurance
Interactive Inc. in Naples, Florida. "This extra money will help them get
into a nicer apartment, buy a home, get a car or opt to purchase more voluntary
benefits. Benefits such as dental and vision insurance are a goodwill gesture
by the employer."
DEMAND CREATING COMPETITION
employers and workers all may benefit from the increasing number of carriers
offering voluntary benefits.
"Brokers now have a lot more
different carriers in voluntary benefits than they did several years ago,"
said Kathy O'Brien, vice president of voluntary benefits and national client
group services for Unum in Chattanooga, Tennessee. "They have to be very
knowledgeable about the carrier, what they will do to meet the needs of their
clients and what types of service they offer, not just in enrollment but also
in plan administration, how they will deliver the services, how they will pay
and handle billing information."
VOLUNTARY BENEFITS MUST BE INTEGRATED
package of voluntary benefits is more efficient when integrated seamlessly with
traditional benefits, and not merely tacked on. Learning how best to do this is
an ongoing challenge.
"Understanding how all of the
different solutions work together is critical, especially when paired with a
high-deductible health plan," said Paul Goedde, executive vice president
of the Voluntary Employee Benefits Board and product management lead for Cigna
in Philadelphia. "Not only does it help the employer attract and retain
talent, it helps them manage their bottom line with more-productive and