In today’s rapidly-changing employee benefits landscape, at least there is one element that can be counted upon to remain constant: the ever-increasing costs of healthcare. Like fruitcake at a holiday brunch, no one may like it, but you can certainly depend upon it being there. According to data from Kaiser, premiums have increased 50% over the past eight years with family plans reaching an all-time high of $18,142 for the year in 2016. (Tuttle, 2016)
With controlling costs at the top of every HR professional’s mind, it’s unsurprising that high deductible health plans have seen a tremendous growth in popularity in the past decade. In 2006, only 10% of workers had a deductible of $1,000 or more. Ten years later and HDHPs are now the standard in the industry accounting for 51% of plans for all covered workers and 65% of those for employees working in small firms. The amount of the deductible is also increasing as employees in companies with less than 200 employees can expect to pay over $2,000 out-of-pocket before insurance benefits will begin. (Tuttle, 2016)
While the move to a high deductible plan may accomplish its goal of reigning in health insurance premiums, the gaps in coverage they create can leave employees with greater financial exposure than ever before. Gaps in benefits can also be detrimental to employers looking to attract and retain talented employees in today’s market where benefits are no longer viewed as a perk – rather, they are a critical component of a larger strategy for maintaining a quality employee pool capable of driving growth.
The good news in all of this is that there is a solution – voluntary benefits.
Voluntary benefits as an industry has increased 257% over the past twenty years, with the greatest growth in the past five years coming specifically from supplemental health benefits such as accident, critical illness, cancer, and hospital indemnity insurance. These benefits can all provide employees with a cost effective way to fill in the holes created by high deductible health plans by paying first dollar benefits directly to employees upon diagnosis or occurrence of medical events. By making these benefits available at the workplace, employees gain access to more affordable rates and waived or simplified underwriting not available to them individually as well as the convenience of payroll deduction and often the added perk of portability. (Eastbridge Consulting, 2016)
Not only do voluntary benefits provide employers with a way to enhance their benefits package at no cost to their bottom line, but the enrollment of these benefits through licensed counselors can also provide an excellent opportunity for educating employees on their entire benefits package, communicating changes, increasing participation in other programs, and building employee appreciation for the benefits being provided for them by showing them the full cost of their “hidden paycheck” – all for the cost of 15-20 minutes of an employee’s time. A study by Unum found that employees with below average benefits who have received above average communication and education on those benefits appreciate their total package more than those with excellent benefits which are poorly communicated. Employers are spending significant amounts of money on their core benefits offering, but to really maximize the value, better communication of these benefits needs to occur, and voluntary benefits can be the funding mechanism to make that happen.
With 77% of workers saying the benefits package is an important factor in their decision to accept or reject a job, and with 70% of employers today offering voluntary benefits as part of their total benefits package, employers in 2017 would be at a clear disadvantage to not be offering voluntary benefits to their employees. (EBRI, 2015) (LifeHealthPro, 2014) Voluntary supplemental health benefits can help fill the gaps created by changing medical plan designs, meet the needs of an ever-increasing diverse workforce, and attract and retain top talent – all at no cost to an employer’s bottom line.