We know that health care reform is coming, in some form or another. With many mandates still pending, business owners and their benefits administrators alike are spending an inordinate amount of time and effort analyzing – and agonizing over – which direction to take with medical coverage, leaving them with little time to devote to other benefits, much less the earnings to pay for them.
Astute agents can ease employers' apprehension by helping their clients rediscover the value of voluntary benefits. Dental and vision plans have been popular for years, and supplemental benefits such as long term care insurance, critical illness, and accident coverage are increasingly demanded by employees coming to grips with their extended family's health needs. With employees willing to pay for such benefits out of their own pockets, employers now have much-needed resources to improve retention and satisfaction, despite the uncertainty with health care and the economy in general.
Simple to understand, voluntary benefits can also be easy to enroll and administer once the employer has the proper tools. Agents, while looking for alternate ways to enhance their clients' employee relations efforts, are presenting, and educating them about, tools and services that make it easy for employers to offer and manage their voluntary benefits.
Employers face the unknown
According to "Health Care Reform," a May 2010 Towers Watson survey of company executives on health care reform, "the overwhelming majority (90 percent) of employers believe health care reform will increase their organization's health care benefit costs." Eighty-eight percent of respondents already plan on passing increased costs to employees. While nearly half of the respondents expect it will not affect their total rewards package, 35 percent expect that health care reform will have a negative effect on their ability to provide competitive benefits.
It's no wonder employers and their benefits administrators are preoccupied. In most cases, they are waiting to see whether their current health plans can be "grandfathered." At the same time, they are reexamining their major medical offerings for the future and hoping that any multi-year implementation plans or heavy cost shifting already in the works will not result in the mass defection of employees.
These concerns have left employers with little time or energy to study their nonmedical benefits offerings, much less package and administer them. Smaller employers may not even have a benefits staff to sift through reforms and other benefit issues for the owners.
Yet supplemental benefits, including voluntary benefits, can be real difference-makers to employees. They can include:
- Dental and vision plans: Highly sought-after coverage that typically leads to higher employee satisfaction and retention.
- Life and disability insurance. Income replacement and "paycheck protection" coverage, which can be coupled with concierge-type features not typically included in health plans.
- Critical illness and accident coverage. Products that feature lump-sum cash payments to help cover such items as out-of-pocket medical expenses, aftercare, or treatment related to serious illnesses or injuries; make up for missed mortgage and car payments; or help cover a spouse's lost wages on the days they take the primary insured for treatment.
Employees tend to place a high value on such additional benefits that their employers have chosen to offer. This is partly because employees tend to lack the time, knowledge, or means to study benefit options outside the workplace, and because they have the convenience of payroll deduction for premium payments, as well as employer-negotiated group premiums, which are often lower than individual rates.
