Employers continue to see 100 percent employee-paid voluntary benefit coverage as a significant means of boosting employee satisfaction with their overall benefit plan offerings, according to Prudential’s Seventh Annual Study of Employee Benefits.*
Among employer respondents surveyed, which included business executives, business owners, human resources professionals, and financial management professionals, 40 percent strongly agreed that voluntary benefits have had a positive impact on overall benefit program satisfaction, and 27 percent believe the economy will lead to increased demand for them during the next five years.
Benefits brokers, who participated in a separate but related survey, were even more optimistic about the economy’s role in boosting voluntary benefit participation with 44 percent expecting growth in participation during the next five years. This trend may be particularly traceable to employer efforts to keep health care costs down in the wake of health care reform, the study indicated.
But Lockton’s Voluntary Benefits Northeast Practice Leader Steven Eisenberg says the study doesn’t address the real reason why voluntary benefit program growth is on the rise; namely, the significant supplementary role of voluntary benefits to an employer’s global benefit strategy.
“We are seeing growth in voluntary benefits participation at Lockton because we advocate for a more successful communication platform—a well-articulated employee educational process that intentionally clarifies the range and value of voluntary benefits for employees as they relate to consumer driven health plans—and because our approach always includes an empirical gap analysis of what an employee needs or doesn’t need,” says Eisenberg.
Importance of Employee Engagement
Among employees who took the same but related survey, 63 percent agreed that voluntary benefits increase the value of their company’s benefits program.
“When an employer offers a benefit program to an employee, especially voluntary benefits, the employer demonstrates goodwill, particularly when the benefit offering covers one’s spouse and family. This increases employee morale, and a happier employee is more likely to stay and be more productive—that’s what’s in it for employers,” Eisenberg adds.
Importance of Cost & Convenience
Cost, convenience and competitiveness remain the top three advantages of voluntary benefits for employers, with the lower cost of some benefits cited as the top advantage. The convenience of administration through payroll deductions and the ability to maintain hiring competitiveness rounded were the second and third reasons.
Employer study participants ranked guaranteed issues, or non-discrimination based on health history, a distant fourth, but Eisenberg believes it should have been ranked higher:
“Think about the fact that 12 to 14 percent of the employee population may be uninsurable based on their health histories and you can see why guaranteed issues should be part of the top three advantages of voluntary benefits,“ Eisenberg asserts.
Employees who took the survey seem to agree with Eisenberg. More than half said cost and guaranteed issues were the major advantages, with convenience through payroll deduction coming in close behind at 48 percent.
What’s your take? Feel free to weigh in below, and reach out to me at RRuotolo@Lockton.com if I can be of further assistance.*Prudential’s Seventh Annual Study of Employee Benefits: Today & Beyond was fielded via the Internet during July 2012. Employer results are based on a national survey of 1,000 employee benefits decision-makers. Employee results are based on surveys conducted among 1,011 employees, ages 22 or older, who work full-time for a company with at least 25 employees.