6 minute read
Voluntary Benefits Offer a Competitive Advantage… with Proper Preparation and Planning
By Jessica DePhillips, Voluntary Benefits Central and East Market Leader, Mercer, Jack Holder, President, Enhanced Benefits Insurance Solutions (EBIS), Michael Naumann, Voluntary Benefits, West RPL, Reliance Matrix
As prices rise on everything from college tuition to gas and groceries, offering voluntary benefits such as supplemental health (accident, critical illness, and hospital indemnity) coverage helps employees protect their assets and mitigate rising healthcare costs. As these often come at relatively little cost to employees, why are so many brokers and businesses still reluctant to jump in?
Despite the advantages of voluntary benefits, we still see a lot of hesitancy in the market. Some companies feel their high wages and comprehensive medical packages are enough. Others cite lack of participation as the reason to stop offering them. And fears of overburdening staff with extra administrative work is a big factor, too. Despite the obvious value to employees, companies are also missing out on an incredible employee retention tool and a weapon against absenteeism due to a lack of understanding of the incredible support that voluntary benefits provide when designed, introduced, and managed properly.
When employers and employees truly understand the voluntary benefits being offered, participation increases significantly.
And to ensure employee buy-in, we need to educate them about what the benefits are and how they can use them in real-life scenarios as well as provide technical and educational support during annual enrollment, and year-round. Putting up a poster, sending an email, or mentioning the benefits once in an annual benefits meeting is not sufficient. We need to build enthusiasm and excitement as employees are educated and make the start of the enrollment period a high-energy event related to the overall culture of the employer.
A successful roll-out depends entirely on preparation, which begins with the benefits themselves, offering those that employees can afford and are relevant to based off of the stage of life they are in. Identifying the right carrier(s) and the right platform to avoid technical difficulties is key, all of which require being educated yourself, or engaging a partner who is.
The Clear Need for Voluntary Benefits
Supplemental insurance helps employees avoid many financial expenses that medical insurance doesn’t cover after an illness, hospitalization, or an accident.
While the doctor's bills might get paid, what about other unexpected costs that arise? How will the employee pay their mortgage, rent, or buy groceries, etc. when they’re not earning their full wages?
Without supplemental benefits, employees may be forced to go to unexpected lengths to manage through a crisis. It is not uncommon for individuals to:
Post on social media asking for financial support.
Use high-interest credit cards to pay unexpected medical and non-medical bills.
Take out a high-interest payday loans.
Pawn family heirlooms or even put out coffee cans at restaurants asking for help.
Go without recommended medications and treatments due to cost.
File bankruptcy due to medical bills.
It does not have to be this way.
Even high-wage earners with great primary coverage are not immune to financial loss when serious illness strikes, or an accident happens, which can and will deplete assets meant for other purposes.
In these cases, supplemental insurance helps employees protect:
401(k) plans from emergency withdrawals
Permanent life insurance policies from loans
Savings and checking accounts from emergency withdrawals
Children’s college funds from emergency withdrawals
Home equity
Your current standard of living and wellbeing
Future dreams and aspirations
There are a myriad of other benefits as well.
In addition to helping employees avoid crippling debt and protecting hard-earned assets, supplemental coverage can provide extra benefits that are incredibly useful in times of need, including:
Out-of-network care that’s not covered by group health
Care overseas not covered by group health
Second or third opinions not covered by group health
Ability to pay for airfare for friends and family to visit during a medical crisis
Cash that can be used for non-medical expenses, such as pet sitting, babysitting, parking fees at medical centers, gas, bus fare/taxi rides to appointments, daycare, and custodial costs for having someone grocery shop and cook
Coverage of medical supplies not covered by group health plans
Gap coverage for deductibles, co-insurance, copays, etc
Funds for modifications to your home or vehicle to aid in mobility
Incentive for preventative screenings which can help prevent or identify chronic conditions early on
Critical Illness plans can cover the “front end” of a Long Term Disability claim. While some employers may keep a severely disabled employee on the payroll for several months of their elimination period, a Critical illness payout designed as a non-taxable benefit could pay the insured $10K, $20K, $30K or more, tax-free, upfront upon diagnosis, before the LTD benefit even begins.
A Protection Tool for Employers
A Non-Occupational, Supplemental accident insurance plan may support an employer’s risk reduction strategies and protect them from “discretionary” or “questionable” (“Monday Morning”) Workers’ Compensation claims by providing cash benefits to employees to cover the out-of-pocket exposure with High Deductible Health Plans (HDHP’s) when an employee is injured off-the-clock.
A Powerful Retention and Recruitment Tool for Employers
Recruiting and retaining employees continues to be major challenges for employers, and offering the right suite of benefits represents a clear competitive edge.
While savvy employees can get coverage on their own, they enjoy significant cost savings and better underwriting when they have access to group products, which often provide more robust plans with fewer exclusions and limitations than they would find on their own. Employees who purchase individual products on their own will appreciate access to these plans. We also know there is a direct correlation to employee satisfaction and the number of benefits that are offered.
In the end, when employees are satisfied with their benefits portfolio and educated enough to make informed benefits decisions, they are more satisfied with their employers. This directly correlates to retention Employee satisfaction also ensures healthier, happier employees.
Now that’s a win-win for everyone!
Jessica DePhillips, Voluntary Benefits Practice Leader, Central/East Markets, Mercer - Jessica is responsible for developing solutions for employers in the mid-market and large/jumbo case employer segments, as well as serving as a regional Mercer Voluntary Benefits representative to align Marsh McLennan sister companies for cross-sell opportunities and other strategic solutions. She also serves as Co-Chair, Mercer Voluntary Benefits Diversity, Equity & Inclusion Committee.
Jack Holder, President, EBIS. - Jack partners with health brokers as an extension of their agency to pick. Carriers and design Voluntary Benefit products around the objectives of each client. In addition, he helps to create and implement employee engagement strategies to assist in saving their broker partners and clients time, while giving the employees the best experience possible.
Michael Naumann, Worksite Practice Leader (Western US) for Reliance Matrix Insurance Company - Michael has over 23 years of diverse experience across employee benefits, enrollment solutions, affinity-based programs and third party administration. At Reliance Matrix, Michael creates sales and marketing strategies to accelerate worksite growth, drives business development, and influences product development.
