The Value of Voluntary Benefits for Employees

Security for employees, employers
With no direct cost incurred by employers, voluntary benefits can help an employee achieve his or her goal of financial security, without being exclusive to 401k programs and retirement seminars. A supplemental life insurance policy’s premiums are paid after income taxes have been deducted, allowing the benefits to be non-taxable when paid to a beneficiary. This offers the employee to leave a substantial amount of money to a spouse or eligible dependent with little to no conversion cost.

Employees trust that much of the homework – vendor research, plan comparisons and rate negotiations – was done for them; and rely on the employer to establish need and to introduce the appropriate benefits. A workplace provides a convenient and economical place to for an employer to help satisfy employees’ benefit needs.

Enhanced Coverage
Through voluntary products, employees have access to additional coverage that otherwise might not be available to them. Many insurers now offer group plans to employers with a minimum of 10 eligible employee lives.

Employees often receive a greater discount when products are purchased at work, and group voluntary benefits may be easier to qualify for than comparable, individual insurance depending on the type of underwriting used by the insurer.

Choice
Allowing for choice has been a priority for employers for years. Decisions in regards to a family’s protection are best left to the individual. Satisfaction is more likely when one is given the opportunity to choose, however too many choices, too quickly can hurt a voluntary benefits program. A ‘stair-step’ approach, add one voluntary benefit at a time, allows the employer the opportunity to introduce new benefits over time.

Control.
With employee choices, comes control. Control of what, though? Voluntary benefits can help employees control “out-of-pocket” claim costs such as deductibles and co-payments; extra fees for employees who get treatments out-of-network; food, lodging, and travel to special treatment centers; loss of income; and charges beyond “usual and customary”. For example, if one of your key employees sustains a critical illness – your health care coverage would only cover a portion of the overall costs associated with the disease. Having the right voluntary benefits in place can assist the employee in ensuring that the non-medical costs are covered which means getting the employee back on the job sooner than expected.

Employee Morale.
James R. Uffleman said “if you can make an employee happy by spending $800 on a comfortable office chair, what's $800?” Obviously, a happier employee is a more productive employee. It also means a healthier employee which can result in significant cost savings for your company. Offer voluntary insurance benefits cam boost employee morale at no cost to the employer and could translate into higher profits down the road.
Voluntary products help employers maintain a competitive benefits program. Employees and employers agree about the importance of benefits. A competitive benefits program only helps to recruit and retain quality, trained workers. By adding or expanding their voluntary insurance benefits offering, employers are able to successfully recruit and keep good employees. It’s no secret that employees highly satisfied with their benefits package feel a stronger sense of loyalty to their employers. Now, both large and small employers are offering voluntary insurance benefits to foster goodwill between employees and management.

Ease of Enrollment.
Employees can sign up for these products at work. The process generally takes about 15-20 minutes per employee when using a face to face enrollment. Many companies have automated this process with online enrollments or call center enrollments. Either way, it is best to schedule the enrollments during company time so that employees understand this is a true benefit. The value the employer attaches to the enrollment process makes a big difference whether group enrollments, face-to-face enrollments, call centers and self-enrollments when employees may not be able to meet face to face. What you need to try and avoid is giving employees a brochure to read with an application in the middle with no explanation of why they are being offered. The employer who uses a process that involves a representative who takes the time to sit and explain the voluntary benefit to each employee will enjoy a higher success level both from a participation standpoint and a morale standpoint from employees.

Ease of Payment.
Voluntary benefits allow employees to choose specific products and pay for them through payroll deduction. Employees like the convenience of buying these products at work. There are no checks to write or a draft from a banking account to set up which makes it a seamless and simple process for employees to pay for their premiums.
In relation to billing, many insurance companies offer flexible choices for online payment and statement reconciliation. Employers shouldn't have to change their payroll systems to fit the insurer's specifications. These systems should integrate options such as payment frequency, combined bills and payment options. It should also reduce the tedious workload of reconciling the billing against enrollment data which, if you have dozens or hundreds of employees, can be a very time-consuming (and therefore expensive) process. These automated processes and notifications save the employer both time and money.

Portability.
Similar to insurance purchased through traditional methods, insurance purchased through the workplace is typically individually owned and portable. It usually is the least mentioned value-added benefit to voluntary programs, but may be the most important. Essentially, if the employee leaves his or her job, the policy usually goes with them. The employee must make arrangements to continue paying the premium with the insurer, but the voluntary policy stays with the employee as long as they need it.

Unlocking the True Value
Think about this way – if you do not offer group health and voluntary benefits, where will employees get the money for medical care, emergencies, and income replacement?

• Personal savings accounts?
• Retirement accounts
• High-interest loans?
• Family members?
• Paycheck advance?
• Employer?

Understanding the employee’s true value can maximize the true value of the voluntary benefits. Recognizing a workforce's diversity and appealing to employees’ individuality can help to make the best use of a benefit program’s effectiveness in achieving employees’ goals. Not all companies need the same voluntary benefits and not all employees need the same products.

Adding voluntary products in its simplest form requires only a few steps:

• Review staff demographics and employees' priorities through formal and informal surveys.
• Evaluate the most popular voluntary insurance benefits programs and gather feedback from employees.
• Possibly add or remove voluntary insurance benefits options.
• Target communication and education.

Now’s the Time for Hard Work
We all recognize, however, that adding or expanding voluntary benefits takes some work and the process of researching vendors and communicating with employees takes time, which is why not every company offers voluntary benefits. It takes significant effort to communicate about the benefits, sign everyone up, and process the paperwork through the payroll system. That effort, however, may pay off in more ways than one from more financially secure employees to better employee morale – no small thing these days, when workers are forced to dig ever deeper into their wallets.

The main problem that many employers face once voluntary products have been added is that employees do not understand the full value or cost of the voluntary benefits offered. How well you communicate the value of your voluntary benefits and how much education the employees receive matters more than the richness of your program.

Communicating programs effectively is the key for employers to increase participation and maximize the employer’s effort in implementing the products. Posters, payroll messages, and in-house bulletin boards can go a long way to helping your achieve higher participation levels in your programs, but a proper communication strategy is very important.

These benefits then have to be supported by proper education. Simply passing out a brochure won’t educate employees on the real value of your voluntary benefits. Many employers are conducting Lunch N’Learn seminars or workshops to teach employees about the details of their voluntary insurance benefits. This also gives employees the chance to ask their own questions and the employer an opportunity to develop an FAQ (Frequently Asked Questions) list for new hires or for future re-enrollments.

Using the Right Tools
If the communication and education are delivered in the right way, voluntary benefits can be a vital retention and motivation tool. That’s why many employers decide to use a broker and/or an enrollment company to assist in this process.

Insurance brokers are specialist advisers who can provide an objective view of your insurance needs to help you decide on the most appropriate insurance cover for your company. A good broker will have a broad knowledge of the insurance market. It is important to choose a broker who understands your business and its particular risks and requirements, so that you get the most suitable and affordable insurance.

In addition, your broker will also have access to competitive quotes. A good broker will be able to contact a number of carriers to find you the most competitive price. You find the best deal without having to spend hours calling around for quotes. You still benefit from the most cost-effective insurance you can find, but you're not the one who has to spend time actually finding it.

A good broker will also be able to help with enrollments whether it’s conducting benefit orientation for initial employees and new hires, providing customer service and support, or maintaining accurate eligibility and administrative procedures.

Although a broker can have all of the above value-added services, he or she must be able to have the characteristics that are important to you. You should feel comfortable discussing potential insurance issues with your broker. And as a client, you should expect your broker or agent to be able to clearly explain the pros and cons of each potential policy as well as the cost differences. Not all cancer or critical illness policies are the same in respect to benefits and rates and your broker can point out the differences.

In the end, adding voluntary benefits can boost not only employee morale but the bottom line as well as long as you communicate and educate your voluntary benefit strategy to your employees.