Employers Voluntary Benefits Countdown: 2014 and Beyond

Donna Joseph & Pete Tobiason

Nov 1, 2013

Employers Voluntary Benefits Countdown: 2014 and Beyond

Employers are counting down to the landmark changes in employee benefits scheduled for 2014 and throughout the rest of this decade. Not only will many important healthcare reform rules become effective,  but  there is growing recognition that Voluntary Benefits  will take a leading role for employers looking to successfully attract and retain the best talent. Here is our quick overview of where employers are today on the Voluntary Benefits journey (“pre-launch phase”), the nuts and bolts of implementing these benefits (“ready for lift-off”) and a “countdown” to next year.

Pre-launch: Voluntary Benefits Today

Voluntary Benefits are employee paid plans included in employee benefits programs. A comprehensive menu of Voluntary Benefits rounds out benefits programs and offer employees valuable protections to meet life needs not met by other benefits.

By offering a wide range of voluntary plans, employers help employees meet their life needs in cost effective and convenient ways, increasing employee satisfaction and loyalty. Employees gain access to Voluntary Benefits through employer facilitated programs, typically at favorable rates, and pay through convenient payroll deductions. When communicating Voluntary Benefits to employees, employers can demonstrate how they coordinate with core employer sponsored benefits for health, retirement and financial protection.

The Launch Pad:  Current Benefits Program

All employee benefits help employees meet their life needs and those of their families and Voluntary Benefits enhance an employer’s total benefits program. Voluntary Benefits can also help control benefits costs while offering new choices to employees. If employees have needs not being met by their current benefits program, innovative employers look at adding new features, and employers want to know the options they have today. Voluntary Benefits are not a ‘bolt-on” or a “nice-to-have” any more.

Strategic employers get started by evaluating current benefits. What life needs does the current program meet? What life needs aren’t being met? What do employees need to protect themselves and their families? What are new hires and candidates saying?  

A strategic inventory of the Voluntary Benefits that are included in the program today helps identify program gaps. Expanding this inventory to include all benefits and compensation programs helps identify how and where Voluntary Benefits can add value in a Total Rewards/Compensation strategy.

Employers think about Voluntary Benefits in terms of the broad categories of life needs. Voluntary Benefits include health and wellness benefits, financial protection benefits and a growing variety of benefits that help employees with everyday life. Employers want to know what is available in today’s Voluntary Benefits marketplace that employees may want and need.  

Health and Wellness

Critical illness insurance, dental care and vision plans meet the health needs of employees by helping pay for the cost of healthcare not met by traditional healthcare plans. Critical illness plans also help pay for the extra expenses that arise when someone becomes critically ill or severely injured - travel expenses, childcare and special equipment for care at home. Medical carriers may offer these voluntary plans coordinated with their healthcare programs. Dental programs offer insurance or enable employees to use discount networks of dentists. Vision plans cover eye care and pay for glasses or contact lenses. Many of these programs have added attractive wellness features for employees and family members.

Financial Protection

Supplemental life insurance helps employees fine-tune their life insurance financial protections  Life and accident insurance planning helps assure that an employee’s family will be able to keep their home and pay for education. Disability insurance protects future income during working years. Long-term care insurance protects assets both before and after retirement, helping meet nursing home or home healthcare expenses not covered by medical plans or Medicare.

Everyday Financial Life Needs

Identity theft protection, auto and home insurance, legal services and pet protection/insurance are popular Voluntary Benefits helping employees purchase financial protections in cost effective, convenient ways. Some of these programs are insured; others give employees access to discounted provider networks.

Financial Wellness

New financial wellness programs offered as Voluntary Benefits help employees struggling with financial stress – such as credit issues, student loans and debt management. By addressing the financial stress many employees face, these Voluntary Benefits help employers reduce “presenteeism” in the workplace, improving workforce productivity.

Innovative Voluntary Benefits

Discount and purchase programs are innovative new benefits. Discount programs offer a wide range of valuable discounts for recognized brands. Purchase programs allow employees to buy major items responsibly using periodic payments through payroll deductions. Vacation travel and college tuition are examples of recent purchase program innovations.

Ready for Lift-off: Voluntary Benefits Nuts and Bolts

As employers consider offering Voluntary Benefits, they want to help their employees understand the impact on total payroll deductions. Affordability depends on the balance between employee life needs and the cost of the plan measured by the impact on take-home pay.

Voluntary Benefits offered through the workplace have convenient payroll deductions that result in regular deductions each pay period. These may be more manageable than one-time direct-billed premiums, and budgeting may be simplified for employees.

Employers want to be sure that employees know the Voluntary Benefits enrollment rules and dates.  Employee ability to participate in the Voluntary Benefits plan depends on each plan’s enrollment rules and the dates that the plan is offered. Employees should know whether there would be an “open enrollment” period and the eligibility rules and how they differ if the employee enrolls during the “open enrollment” period or if they enroll later. Many Voluntary Benefits can be offered and enrolled “off-cycle” or at any time during the year. Effective enrollment is key so that there is sufficient participation to support the plan and the vendors.

Voluntary Benefits provide unique opportunities to communicate not only the voluntary programs but at the same time deliver strong messages demonstrating the value of core health, retirement and basic financial protection benefits. Communicating Voluntary Benefits throughout the calendar year increases employee appreciation and understanding of the entire benefits program. Employers are taking advantage of the many recent innovations in benefits communication – including on-line, mobile and social media.

Some employers express concerns that introducing a broader menu of Voluntary Benefits will place significant demands on their already lean HR functions in terms of both managing the Voluntary Benefits program and handling administration.  Innovations in recordkeeping platforms provide payroll integration and support for communication, enrollment and administration, relieving HR of many of these burdens.
Teaming with Voluntary Benefits vendors – including brokers, consultants, product providers and administration specialists – is key to the successful introduction and ongoing implementation of Voluntary Benefits. An external vendor team will provide (often at no cost to the employer) many of the resources employers need. Employers can lead their vendor team using vendor summits and best practices that encourage close coordination of services and products to create an excellent employee experience and ease of administration.

Counting down to 2014 and beyond

Employers are increasingly seeing reports of innovative employers that are successfully using Voluntary Benefits in ways that significantly contribute to employee satisfaction. Here is a countdown list for employers leading to 2014 and the future expansion of Voluntary Benefits:

Ten:  Employers who understand the life needs of employees and see where their core benefits provide resources will be ready to identify needs to be addressed in a new ways. For example, critical illness and other health related Voluntary Benefits could fill gaps in high deductible health plans. Employees will understand that when a high deductible health plan is introduced, the kinds of Voluntary Benefits that pay for the same event may be worthwhile, covering expenses that are subject to the deductible
Nine:  The workplace today often has three, four or more generations working side-by-side.  Employees - whatever their generation – are still looking to employers for benefits, and employers still want to use benefits to attract and retain all these generations by meeting life needs and being  competitive.
Eight:  Employers will be looking to their broker or consultant to present the full range of Voluntary Benefits available today – not just the traditional Voluntary Benefits.

Seven:  Employers will want new administrative platforms and new technologies for communication, education, enrollment and administration.

Six:  Employers will want to understand the value proposition Voluntary Benefits offer their employees – a clear understanding of what’s covered and what’s not, the pricing/premiums and the fees and commission structure of the product.

Five:  Employers will look for a one-stop solution. No broker, consultant or provider will want to bring 10 new products for the employer to offer their employees without a turnkey solution for administration and enrollment, ideally a single administration system.

Four:  Women - as primary breadwinners and the spouses/partners of employees – have significant needs for the financial protections and financial well-being resources Voluntary Benefits offer.  Employers will want to recognize the unique needs of women and explore innovative ways to communicate Voluntary Benefits to women in the workforce.

Three:  Employers will want to address financial stressors on their employees that result in productivity damaging distraction and presenteeism. Employees will welcome a presentation that acknowledges they have a number of financial challenges in their lives and then describes a coordinated set of products that addresses these issues and provides a convenient, cost effective way to get these financial protections.

Two: Voluntary Benefits will continue to expand as new products are developed and introduced for the workplace and as new vendors enter the market.  For example, the introduction of telemedicine on a voluntary basis supports employer wellness initiatives and helps control healthcare costs.

One: The trend to defined contribution strategies that enable employers to limit their spend on benefits will continue. Private healthcare exchanges accommodate this trend; employees can “purchase” Voluntary Benefits with the portion of a specified benefits contribution not used for healthcare premiums.

Zero – Launch!  Employers will better position Voluntary Benefits in their benefits strategy – whether for gap filling, financial wellness or life style programs. Instead of having an uncoordinated menu, there will be better grouping and communication of Voluntary Benefits as an integral part of the employer’s program.   We’re just at the beginning of the Voluntary Benefits adventure.

Resource:  For help in developing a Voluntary Benefits Inventory, download our complimentary Managing Benefits Strategic Inventory™ at   http://bit.ly/RJTA-MBI13T

About the Auther

Donna Joseph is CEO and Pete Tobiason is President of Rhodes-Joseph & Tobiason Advisors, an independent employee benefits coaching and consulting company.  They speak and write regularly on Voluntary Benefits from their experience as Benefits leaders for a major global employer.  Visit www.rjtadvisors.com for more resources.

Contact:   info@rjtadvisors.com
203-883-8144