SHRM: Pandemic Highlighted Value of Voluntary Benefits
The COVID-19 pandemic drove more employers to offer voluntary benefits, and now employee-pay-all benefits are expected to play a greater role after the pandemic.
“To meet employee expectations and attract and retain talent, employers are offering voluntary benefits, and broadening their voluntary offerings, to enable employees to create a package that works for their needs,” said Kim Buckey, vice president of client services at Burlington, Mass.-based DirectPath, a benefits education, enrollment and health care transparency firm.
“We’re seeing increased interest in critical illness, hospital indemnity, long-term disability and life insurance buy-up, and even long-term care coverage, as a result of the pandemic, as well as financial planning, legal services, emergency loan programs and the like,” she noted.
New survey data supports those observations. According to findings from consultancy Willis Towers Watson, 94 percent of large employers believe that voluntary benefits will be more important to their total rewards strategy going forward, compared with 36 percent of employers who deemed them to be important in 2018.
A total of 238 employers, who together employ 3.7 million workers, responded to the voluntary benefits section of the consultancy’s 2021 Emerging Trends in Health Care Survey, conducted from Feb. 23 to March 12.
“The pandemic has given rise to an increase in benefits that protect employees against big hospital bills and loss of income and provide personal protection,” said Lydia Jilek, senior director, voluntary benefits solutions at Willis Towers Watson.
The five fastest-growing benefits, the survey showed, are:
|Voluntary benefit||Currently offered||Will offer by 2022 or beyond|
|Identity theft protection plans||53%||78%|
|Hospital indemnity plans||42%||65%|
|Pet insurance plans||47%||69%|
|Group legal plans||58%||75%|
The following are the voluntary offerings that employers currently offer or are planning to offer over the next two years:
- Financial planning/counseling through an existing vendor (93 percent).
- Tuition reimbursement programs (88 percent).
- Telephonic financial planning/counseling (77 percent).
- Onsite fitness center (54 percent).
- Backup child care (48 percent).
- Elder care (44 percent).
“Employers are supplementing existing core benefits with more personalized benefits to provide additional ways to support their employees’ overall well-being and enhance the perceived value of their benefits offerings,” Jilek said.
“The pandemic has provided an opportunity for employers to re-examine their overall benefits package and employee value propositions in new and creative ways,” Jessica B. Grande, a consultant with Cowden Associates in Pittsburgh, recently wrote.
To ensure that employees appreciate these benefits, “they need to be aware they are available and also understand [them],” she noted. “Employers will see the most engagement and enrollment in these programs when promoted through a robust communications campaign tailored to the specific employee population.”
According to Julie Stich, vice president of content at the nonprofit International Foundation of Employee Benefit Plans, “As with any type of benefit offering, it’s crucial to think strategically” about voluntary benefits. Questions employers should ask, she advised, include:
- Will this new benefit fit your organization’s culture?
- Will it be useful in attracting and retaining a diverse talent pool?
- Will it be utilized and valued? Will it support workers’ well-being?
Added Stich, “As with all benefits, there’s no one size fits all.”
Earlier this year, Laura Martin, director of worksite marketing at OneDigital, an employee benefits and health insurance broker, blogged that “Being able to pick and choose benefits that are important to them has always been the attraction of voluntary benefits for employees. Because of the pandemic, many voluntary benefits will stand out as options for these times.” For instance, “expect more interest in critical-illness insurance.”
Voluntary benefits, she added, “will become an even more personal choice for employees as they continue to navigate the effect the pandemic has had on their financial situation. Being able to pick and choose products that will meet their individual needs is going to be a lifeline for many who are still recovering.”
Noted Buckey, “More American workers are more aware of what might happen, and as such will be looking at what they might need to protect themselves and their families from the “what ifs”—not just immediate concerns.”
Read the article here.
(Stephen Miller covers compensation and benefits for SHRM Online.)