Voluntary benefits help employers meet the diverse needs of today’s workers, while requiring only low-impact administration. At the same time, voluntary benefits allow employees easy access to needed personal and family protection without having to shop around in a market that otherwise might overwhelm them.
Smart Business spoke with Douglas Fleisner, sales executive at JRG Advisors, about the advantages of adding voluntary benefits to your benefit plan.
What do companies need to know about voluntary benefits?
Voluntary benefits are easy to buy, featuring guarantee issue and ultra-simple forms. They are easy to keep, as payroll deduction means no bill to forget and no checks to write.
Employee diversity is real, based on factors like culture, generation, family status, behavioral preferences and economic category. Voluntary programs allow the employer to offer a broad palette of benefits without adding an additional cost to the company.
Lots of small and midsize companies are saving money by increasing deductibles on their health care plans and offering voluntary benefits to bridge the gap.
Difficult economic times mean tough either/or choices for small and midsize business owners. For many, adding voluntary benefits to compensate for cutbacks elsewhere in a benefits package or to enrich an existing core benefits plan — particularly one with a high deductible — makes more sense than making cuts in critical areas of a business, laying off key employees or losing them to a competitor with a richer benefits package.
How do these benefits work?
With a voluntary benefits portfolio, employees are encouraged to focus on whether they need a given product, and how much to purchase. Instead of the employer paying for accident, critical illness, disability, life, vision and/or dental insurance as core employee benefits, business owners have begun to see the wisdom of providing those kinds of benefits on a voluntary basis, a la carte-style, where employees can pick and choose among them and pay for the ones they want and can afford.
Not only does offering voluntary benefits cost small employers virtually nothing and help level the benefits playing field with larger companies, it also affords employees access to various types of insurance coverage, typically with looser underwriting requirements and at group rates that are lower than if they went out and got coverage on their own.
What should an employer consider when offering voluntary benefits in its portfolio?
First, employers wishing to offer voluntary benefits must show their support for the benefits program if they want them to be successful with the employees. Such support on behalf of the employer lends itself to motivating employees to see the value of voluntary benefits for themselves and their families. An employer should talk to employees to help determine what offerings would be most useful.
In addition, employers should carefully examine their current benefits package to determine which benefits are popular and those that are not. Most importantly, employers need to determine the type(s) of voluntary benefits that offer the most value for the lowest cost. This is crucial to the success of the voluntary benefits program due to employee’s perceived value.
As the program is implemented, employers should educate employees on what voluntary plans are available and the benefits of enrolling. Lastly, employers should follow up with employees on a regular basis to ensure that they are satisfied, and that there are no problems
So, in the end, what’s special about voluntary benefits is their responsiveness to the needs of customers. Employers can easily offer benefits that will be meaningful to a broad spectrum of employees while keeping costs down, and employees can easily make informed selections of benefits that meet their needs.
Insights Employee Benefits is brought to you by JRG Advisors
