The Loop

Popular Voluntary Benefits

Filed under: Benefits

We are living in an “on-demand” era. We use streaming services and recorded DVR programs to watch movies and shows whenever we want, not when cable channels schedule them. We order groceries online and have them delivered on the same day. We can use wearable devices to check our heart rate, blood pressure, and how many steps we walk each day. We don’t have to go to the cinema, the grocery story or the doctor’s office; the on-demand economy is designed to give us what we want, when we want it. 

This is the challenge that employers face when designing benefit packages. It is all the more complex given that today’s workforce is comprised of multiple generations. Troubled Generation X is entrepreneurial by nature and unconvinced that college and traditional career routes are their thing. Millennials have become the mainstay of consumerism, but they are frustrated by recent economic events – the real estate market, the automobile market, general inflation, and investment market volatility. Baby Boomers are worried about not having enough money to retire. And even many members of the Silent Generation are still working fulltime; look no further than the 38 members of Congress aged 77 and up .

One strategy to address the diversity and on-demand requirements of today’s labor force is to offer a wide range of voluntary benefits. Whether fully or partially paid for by workers themselves, employers have a cost-efficient way to tailor benefits to the needs of each individual.

Presently, nearly three-quarters of benefit-eligible workers in the US have access to voluntary benefits through their employer. While traditional benefits such as health insurance and a 401(k) plan are expected, voluntary offerings can run the gamut from dental and vision to pet insurance and identity theft protection. Every worker has different priorities, responsibilities, fears, and dreams. For most, there is a voluntary benefit to help address them. The following is an overview of some of the most popular voluntary benefits offered by employers today.

‍Dental Insurance

As long as dental insurance remains separate from healthcare coverage, it will be a popular benefit. While it is generally offered as an employer-paid benefit, about 20 percent of employers offer dental insurance on a voluntary basis.

Vision Insurance

Vision insurance benefits are less often fully paid for by employers. About 64 percent sponsor it, while just under 45 percent offer vision as a voluntary benefit. It may be less universally needed as dental insurance, but can be a cost-savings boon for families that need it. That’s why vision is an ideal voluntary offering; a priority for some, unnecessary for others.

Life Insurance Benefits

The advantage to employer-sponsored life insurance is that it is guaranteed-issued, and in many cases requires no medical underwriting. However, except in the case of single workers with no dependents, employer-sponsored policies typically do not offer enough coverage. That’s why many employers offer expanded coverage for an additional premium. It’s a standard voluntary benefit that’s been around a long time – but very important for families since group premiums are generally lower than what’s offered on the individual market.

Disability Coverage

Disability insurance provides partial income payments when an employee is unable to work due to illness, injury or disease. While minimum coverage may be offered as an employer-paid benefit, approximately a third of employers offer expanded long- and short-term disability on a voluntary basis.

Wellness Programs

Many employers offer voluntary wellness programs to compliment their health insurance coverage. These include a Flexible Spending Account (FSA), a Health Savings Account (HSA; available only with high-deductible plans), various forms of gym memberships and discounts for fitness classes, as well as medical deductible financing – a low-interest program to cover deductibles, repaid through payroll deduction.

Financial Wellness‍

Financial wellness benefits are increasingly on the rise. While fee-free bank accounts and credit union membership have been around for awhile, two new popular benefits are employer-sponsored short-term loans and on-demand early access to earned wages. Both of these options can ward off workers from using payday loans and high-interest credit cards, which can create debt problems quickly.

Student loan assistance continues to be in demand and can take on many forms. For example, some employers make contributions toward a worker’s student debt, others offer low-cost options to refinance loans, and some even permit workers to convert their PTO hours to student loan payments.

More than anything, America’s workforce needs counseling for better financial literacy in how to manage their income – create and follow a budget, pay down and avoid debt, save for short and long-term goals, and make investment decisions. In recent months, there’s been a call for employers to help workers build an emergency savings fund as a foundation for their financial security.

Family Planning Benefits

Extended parental leave is a hot topic right now. There is pressure for companies to extend both paid and unpaid leave for new parents – from traditional family mothers and fathers to single parents, same-sex and transgender couples. In addition to assistance with adoption expenses, 71 percent of companies report that they are considering offering fertility benefits such as intrauterine insemination (IUI), in vitro fertilization (IVF), gestational surrogacy, and egg freezing. In one survey, nearly 70 percent of Millennials responded that they would change jobs specifically for fertility coverage.

Legal Assistance

Employee Assistance Programs (EAPs) have become very popular since the onset of the pandemic, particularly for mental health, substance abuse, and legal services benefits. Some employers now offer expanded legal services as an additional voluntary benefit. Workers looking to draft a will, engage in divorce proceedings, or buy a home and need closing assistance are increasingly interested in affordable group rates.

Housing Assistance

Given the rising costs associated with buying a home, some employers offer voluntary benefits to help fund a downpayment, and group rates for home warranty insurance and homeowners’ insurance.

‍Long Term Care Insurance

Expenses associated with long-term care are a particular hot button for Baby Boomers, many of whom are caring for elderly parents or recognize how much their parents pay for assisted living or a residential facility. Long-term care is quite expensive, so older workers are very interested in what employers can offer in terms of group insurance rates and portable policies for post retirement. Currently, only 16 percent of employers offer LTC insurance as a voluntary benefit; nine percent offer it as an employer-paid benefit.

Pet Insurance

Many people regard their pets as their children, so pet insurance can work as a parity offering for workers who cannot take advantage of family benefits. Today, about 24 percent of employers offer pet insurance as a voluntary benefit, which is up from 16 percent in 2018. One reason for its recent popularity is due to the higher number of pet adoptions that occurred during pandemic.

Identity-Theft Insurance           

As technology continues its ever-present foothold in our lives, more people are conscious of the threat of cybersecurity breaches and ID theft. While you’d expect younger generations to be concerned, since most of their social and financial lives are intertwined with the internet, older workers tend to feel more vulnerable. After all, they didn’t grow up with this technology and tend to have more assets to lose. Identity-theft insurance protection is an ideal voluntary benefit because it offers a small price to pay for those who worry about it, while others may have no interest in it at all.

Accident, Critical Illness and Hospital Indemnity Insurance

While young adults often view themselves as indestructible, the older we get, the more we realize how vulnerable we truly are. Insurance is best purchased for big-ticket expenses, so older workers may be interested in these types of coverage to hedge their finances against large losses. This is particularly true for those who have a genetic predisposition for certain cancers, diabetes or heart disease. These insurance policies have grown more popular recently, presumably due to mortality fears exposed by the pandemic.

  • Hospital indemnity insurance pays for expenses not covered by standard health insurance, including copays, deductibles and inpatient rehabilitation fees.
  • Critical illness insurance pays out a lump-sum that can be used for any purpose when the worker is diagnosed with a critical illness such as stroke, heart attack or cancer.
  • Accident insurance protects against losses incurred by accidental bodily injury. Lower group rates also offer a way to supplement life insurance coverage under these particular conditions.

MetLife’s most recent benefit trends study revealed a correlation between a broad range of voluntary benefits and worker loyalty/happiness. Specifically, the data found that companies offering 11 or more voluntary benefits boast the highest levels of employee satisfaction.

Perhaps even more than the actual benefits offered, workers like having choices. It gives them the ability to pick and choose which benefits are best suited to their lifestyle and circumstances. Everyone wants to feel recognized, differentiated, and be in control of how their money is spent. Employers can offer this latitude and personalization through a varied spectrum of voluntary benefits.

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