A menu of options: Should you offer your employees more voluntary benefits?

These days, savvy employers are taking a close look at the benefits they’re offering employees, closely monitoring demand with the goal of offering a range of valuable (yet cost-effective) choices.

The solutions to many of their problems? Voluntary benefits that let employees select from a menu of products and services — typically at some cost to them, but at more cost-effective rates enabled by group buying power.

Not only is the U.S. labor shortage putting millennials in control when it comes to demanding better compensation, but millennials are especially in need of vehicles that can help them with their financial challenges. After all, many are burdened with massive student debt while simultaneously trying to lay framework for the significant retirement savings they’ll need in the future, thanks to expanded life expectancies.

At the same time, workers across generations are seeking additional protection from the financial vulnerability that’s a side effect of high-deductible health plans (HDHPs). Despite their higher out-of-pocket costs when claims are filed, lower-premium HDHPs have grown in popularity. A 2018 study by the International Foundation of Employee Benefit Plans, for example, found that 59 percent of U.S. employers were offering an HDHP in 2018 — up from 46 percent in 2014. And in a 2018 SHRM survey, 44 percent of U.S. employers that responded were slated to switch to a higher-deductible or less-generous health care plan for 2019.

These added HDHPs are also spurring growth in voluntary benefits. Because of their financial limitations, many consumers choose to complement their HDHP with supplementary forms of insurance — most commonly critical illness insurance, accident insurance and/or hospital indemnity insurance — to give them peace of mind when it comes to potentially expensive medical issues.

Employers are responding to that demand in spades; the MetLife 2019 U.S. Employee Benefit Trends Study found 57 percent of U.S. organizations (compared to 50 percent in 2018) are committed to offering employees a wider range of voluntary benefits. The survey further revealed that 53 percent of workers across generations see employers as partly responsible for their financial well-being, and 53 percent say they'd be more loyal to companies giving that offer more benefits.

“Employers are shifting voluntary and supplemental benefits into a more prominent, strategic role to attract and keep employees,” advises Dinah Wisenberg Brin on SHRM.com. “Whether offering traditional choices such as life insurance or newer options like financial wellness, meditation or concierge services, more employers view voluntary benefits … as an important piece of their employee engagement efforts.”

All those factors combined make now a good time for employers in all industries to consider broadening their voluntary benefits offerings.

“Today’s diverse, multi-generational workforce has such varying characteristics, lifestyles and preferences that employers no longer can provide one-size-fits-all benefits even in the voluntary arena,” notes Elizabeth Halkos on Benefitspro.com. “A broad benefits package sends a good message to employees and potential recruits. It positions a business as a company that listens, cares and is worth working for.”

Need help in customizing a range of voluntary benefits for your workforce? Contact Ochs, experts in insurance for public employers for more than 76 years, to arrange a menu of cost-effective options that will work in your favor.

DOFU 5-2020