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Extending Your Benefits Program with Voluntary Offerings
October 8, 2014
Employees generally recognize that you don't have an unlimited budget for all forms of compensation, including employee benefits. And in recent years most have grown accustomed to the necessity of sharing more of the financial burden of health benefits. So if they can get products and services they need or want at a discount thanks to your role in making that possible, you should reap some of the same positive outcomes you expect with standard benefits. That is, a greater ability to attract, retain and motivate employees.
One early staple of the voluntary benefit lineup was "cancer insurance." The proper term is critical illness insurance. Depending on the policy, these days, cash payouts can be triggered by a myriad of other serious ailments, such as Alzheimer's, strokes, kidney disease, organ transplants and heart attacks.
The function of the coverage is to provide extra cash to pick up expenses incurred as a result of conditions that are not covered by medical insurance -- or any other purpose, for that matter. Those might include travel expenses associated with visiting with the patient (particularly when treatment is at a distant location), childcare (if the patient had been the primary childcare provider), and so on.
Another common voluntary offering is life insurance. As with critical illness coverage, life policies have become much more flexible. For example, some allow for advance payments to cover some long-term care costs.
Remaining "core" voluntary benefits include vision insurance, short- and long-term disability, accident insurance and dental insurance.
Following the initial success of voluntary insurance, a myriad of insurance and other service providers have jumped on board what they see as a lucrative distribution channel they call "worksite marketing." Among the more recently introduced services are legal insurance, identity theft protection, pet insurance, and discount merchandise purchasing arrangements.
Making the most of a voluntary benefits program requires careful planning, free from the onslaught of voluntary service providers seeking access to your employee population. Planning begins with a review of your current array of benefits looking to identify gaps in what you offer. So if you don't have and cannot afford, for example, a vision plan, this might be a logical benefit to make available on a voluntary basis.
Polling employees about what voluntary benefits to offer is critical to garnering a critical mass of participants. Although voluntary benefits don't cost you anything directly, you will need to invest some energy in getting a program launched or re-launched, if your voluntary program is languishing due to being ignored. You also need to demonstrate your support for the program by giving employees some time to learn about their choices, possibly get some guidance, then enroll. A voluntary benefit program with minimal enrollment is not worth having.
You do not need to be the one providing all of that education effort, however. Some brokers specializing in the voluntary market have a staff of enrollment specialists to help employees make their decisions.
Caution: It's generally a good idea to use an enrollment firm whose employees are paid on salary, rather than commission, to avoid subjecting employees to a sales process that may not lead to the best choices.
Enrollment firms generally prefer to arrange one-on-one meetings with employees to create the opportunity to answer individual questions and offer suggestions based on individual circumstances. For example, if an employee has a family to support and lacks adequate life insurance, but wants to buy pet insurance, the enroller with no axe to grind would probably encourage the employee to meet what would seem to be the greater need.
Enrollment in voluntary benefits, like that in any other kind of benefit, can be accomplished online without any outside involvement. These systems may include tools to help employees assess their needs, and automate the process of establishing payroll deduction payments to pay voluntary benefit fees and premiums.
Enrollment Maximization Pointers
Enrollment professionals offer the following tips on making the most of a voluntary program:
1. Have the enrollment period for voluntary benefits coincide with your regular open enrollment process. Doing so:
Ensures that employees will be aware of what their voluntary options are, and
Helps them to recognize gaps in their basic be
nefits that might be filled by a voluntary benefit.
2. Enable new hires to enroll in voluntary benefits at the same time they are eligible for employer-paid benefits.
3. Be selective in the voluntary benefits you make available, particularly in the early stages. Too many choices can overwhelm employees, and cause them not to take advantage of sound opportunities. Add additional benefits gradually as employees have become acclimated to the standard offerings.
4. Don't treat a voluntary benefits program as the stepchild of your basic plan. If you forget it after getting the program rolling the first time around, participation inevitably will trail off. Have a plan for maintaining the effort after the initial enrollment.
5. Establish high yet achievable enrollment goals. A good enrollment rate for core voluntary offerings (for example, life, disability, accident) is in the 35 percent to 40 percent range, depending of course on the scope of the employer-paid program and employee demographics. Other categories, such as pet insurance, are unlikely to garner widespread adoption.
6. Assess results against your goals, and plan the next enrollment effort accordingly.
Voluntary programs have been around for decades, but have changed considerably. Not only has the variety of available voluntary benefits evolved, but also the understanding of how to make the most of them.
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