Voluntary Benefits: Why Offer Them?

As employers continue to evaluate their benefits package in response to the Patient Protection and Affordable Care Act (PPACA), voluntary (traditional and non-traditional) benefits may play a bigger role in benefit plan designs in the coming years.

The trend toward more focus on voluntary benefits is a result of high-deductible health plans, which shifts higher health costs to the employee. Employers are implementing new voluntary benefits into their benefit offerings such as supplemental medical insurance to assist employees in covering the higher health costs. In addition, employers are expanding the assortment of voluntary benefits offered to allow employees to choose benefits that fit their lifestyle.

A well-designed benefits package can assist companies in their ability to attract and retain workers. According to an Employee Benefit Research Institute’s 2013 Health and Voluntary Workplace Benefits Survey, more than 75% of respondents indicated the benefits package an employer offers is extremely or very important in their decision to take a job. In another study by TNS Omnibus, 86% of employees indicated it is important to be able to customize their benefits to fit their individual needs.

Traditional Voluntary Benefits: Many employers already offer traditional voluntary benefits such as short-term disability, life insurance, and vision insurance. In the future, more employers will also begin to offer gap/medical supplement, cancer and critical illness, and hospital supplemental policies to enhance the employee benefits package and reduce potential health care costs the employee may be responsible for without such policies.

Non-traditional Voluntary Benefits: Most of the non-traditional benefits provide employees with benefits they can use year-round to obtain something they need rather than many core benefits that employees only appreciate when they are sick or injured. Some examples of non-traditional voluntary benefits are pet insurance, identity theft insurance, membership discount programs, auto or home insurance, legal services, financial planning, etc.

According to MSEC’s 2014 Health and Welfare Plans Survey, employers are offering the following types of voluntary (traditional/non-traditional) benefits in Arizona, Colorado, and Wyoming.

Organizations should consider designing benefit packages that include core and voluntary benefits to fit the needs of their employee demographics as well as how the benefits fits within the organization’s overall total rewards program. MSEC will continue to survey the above benefits in our annual Health and Welfare Plans Survey to see if they become more prevalent in the coming years.

Benefits Survey 2