In recent years, voluntary benefits have become an increasingly important part of employee benefits packages–and for good reason. Voluntary benefits, otherwise known as supplemental insurance, are benefits offered by companies for employees and typically paid for by employees via payroll deductions.
Voluntary benefits are usually offered in addition to other core benefits provided by the employer; voluntary benefits can include life insurance, dental insurance and accident insurance, among others.
For a deeper dive into the world of voluntary benefits–and the impact of the COVID-19 pandemic–we sat down with Heather Garbers, the Vice President of Voluntary Benefits at HUB International.
Q: Can you briefly define voluntary benefits and describe the value of voluntary benefits?
HG: Voluntary benefits and the terminology that we used to describe voluntary benefits differ widely. Sometimes you’ll hear them referred to as “worksite products,” “supplemental products” or so forth. The industry-recognized term, however, is voluntary benefits. In brief, voluntary benefits are employee benefits options that allow employees to customize their employers' benefits offerings to their unique needs. Overall, these solutions enhance financial wellness by allowing members to purchase plans that can fill gaps in traditional coverage benefits; this means voluntary benefits can protect employees’ income and provide services that enhance their overall well-being.
Q: What are some of the most common questions clients ask you about voluntary benefits?
HG: By in large, questions around cost are the most common. How much do I have to pay? Who pays for them? What is the cost? How do we even know employees even want these benefits? When can I start offering voluntary benefits?
Q: Are there misconceptions surrounding voluntary benefits that tend to crop up?
HG: Yes, especially around cost. There's this misconception that these plans are incredibly expensive. A general rule of thumb in our industry is to spend no more than one hour per week of pay on these types of programs.
Another large misconception is that there's only one company that offers voluntary benefits plans. Similar to that is the misconception that these plans are only offered at a certain price level; so, if you bid them out with other carriers, they will come in at the same cost. When we bid these plans out competitively for a client, we know that we will see costs all across the board.
From there, cost does–of course–play into the decision of whether to offer voluntary benefits. We want to provide an affordable plan and ensure there is enough value when weighing the customer experience to make sure the client will be happy with their decision to enroll.
Q: What do you say to clients when they ask about which voluntary benefits to offer their employees?
HG: Review industry benchmarking data. Look at what other companies like yours that are similar in size, region or industry offer their employees.
Q: Would you recommend employers survey their employees to get a better handle on what benefits their employees would value most?
HG: I think employee surveys are fantastic, but if you're going to do one I would recommend working with your broker to help frame those questions in advance. If I go to your average employee and say, “Do you want accident insurance?” They're going to say, "I already have car insurance. I don't need that.” It would be best if you worked with your broker to frame questions in such a way that employees understand exactly what you’re asking, so the data you’re collecting from those surveys is instructive.
Q: Has the COVID-19 pandemic changed the importance of or employee desire for voluntary benefits?
HG: Yes. We’re finding that the solutions provided by voluntary benefits address a real need in the marketplace due to COVID. Plans such as hospital indemnity, for instance, can help a member deal with increased costs should they experience complications due to COVID-19. In many ways, the solutions offered by voluntary benefits plans are more critical than ever before.
Q: A growing concern among employers across industries is the "Great Resignation." Suppose an employer wanted to pay their workforce more to retain that talent but couldn't afford it. Would it be wise to consider offering voluntary benefits as an incentive instead?
HG: Absolutely; that's what we're advising our clients. We know that the past two years have been hard for employers. Many of our clients had to shut down for a period of time, while others had to furlough segments of their workforce. We know that it has been difficult, and we know that many employees are leaving their jobs for promises of greener pastures or a dollar more an hour.
However, clients can make their benefits package more attractive–while staying within their budget–by offering employees the ability to customize their benefits package according to their unique needs. It’s an excellent strategy, especially if you’re an employer working within a fixed budget.
Q: Is there anything we haven't discussed yet that you would want someone interested in learning more about voluntary benefits to know?
HG: If I were on the employer's side, I would not settle. I would ask questions. I would make sure I see multiple options. I would make sure that my consultant acts as my advocate by making me aware of our strategy behind offering these plans and why. Every couple of years, ask if the products being provided still align with your corporate benefits strategy. I wouldn't settle for anything less than what I would expect as a policyholder.
To learn more about voluntary benefits, be sure to register for Mployer Advisor's upcoming webinar "Voluntary Benefits: 2022 Trends and Tips for Employers." CEO and Founder of Mployer Advisor Brian Freeman will join Garbers to discuss current trends in voluntary benefits and more.
Looking for more exclusive content? Read on for the latest news and industry updates from the Mployer Advisor blog.
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