Voluntary Benefits: A Low Cost Employee Benefits Option

In what its online summary calls an “employee benefits breakthrough” the MetLife 2014 Employee Benefits Trends Study shows that more employees than ever want voluntary benefits options.

Voluntary benefits are insurance products that employees choose to purchase at lower rates through the company than they would be able to otherwise.  And, there is typically no cost to employers besides the set-up and administration of the plan.

And yet, the study shows that employer focus on voluntary strategies has dipped, ending a three-year rising trend. In 2012, 60% of employers agreed that voluntary benefits were a significant part of their company’s benefits strategy, but the percentage dropped to 50% in 2013.

And the percentage of companies likely to increase the number of voluntary benefits offered in the next two years has declined from 47% to 35%.

According to the summary:

“With the emphasis on the shift to voluntary benefits in recent years, the decline is somewhat surprising. However, it’s understandable given that health care challenges are now weighing big on employers’ minds.”

Voluntary Benefits Increase Employee Satisfaction and Loyalty

Given the interest by employees, companies may want to step back and rethink their strategies for voluntary benefit offerings. There’s evidence that voluntary benefits strategies increase employee satisfaction and loyalty.

Job satisfaction jumped in the years voluntary benefits were increasing, from 51% in 2010 to 55% in 2013. 

“And, employees who are very satisfied with benefits are now more than twice as likely to be very satisfied with their jobs.”

Employees Have Serious Economic Concerns

Employees are still struggling after the recession and have serious economic concerns. There’s a growing percentage of employees who are very concerned about these issues:

• Having enough money to cover out-of-pocket medical expenses – 40% in 2012, 48% in 2013.
• Meeting monthly living expenses/financial obligations – 36% in 2012, 44% in 2013.
• Job security – 31% in 2012, 42% in 2013.

A significant percentage of employees—especially younger employees, 64% of Gen Y—strongly agree: “I am looking to my employer for more help in achieving financial security through employee benefits.”

Benefits are More Important to Employee Recruitment and Retention

Benefits are an increasingly important factor in employee decisions to accept a job and to stay with that company, as the percentages of employees who strongly agree with these survey statements show:

• Benefits are an important reason why I came to work for my employer – 28% in 2012, 43% in 2013.
• Benefits are an important reason why I remain with my employer – 38% in 2012, 50% in 2013.

Customizable Benefits Deliver Employee Satisfaction

The survey also finds employees want benefits that meet their personal needs and voluntary benefits deliver more satisfaction for less cost. Here are the percentages of employees strongly agreeing with these statements:

• I am interested in having my employer provide a wider array of voluntary benefits that I can choose to purchase – 54% in 2012, 60% in 2013.
• I am willing to bear more of the cost of my benefits in order to have the choice of benefits that meet my needs – 51% in 2012, 60% in 2013.
• Having benefits customized to meet my needs would increase my loyalty to my employer – 38% in 2012, 43% in 2013.

Which Voluntary Benefits are Most Popular?

Many employees said they would be interested in these voluntary employee benefits if their employer offered them:

• Vision Care Insurance or Vision Discount Program 60%
• Critical Illness Insurance 44%
• Hospital Indemnity Insurance 44%
• Cancer Insurance 42%

“Optional benefits help employees cope with rising health care expenses, especially if they have high deductible medical plans,” the survey finds.

As the survey summary says:

“Employees are counting on workplace benefits more than ever. Voluntary solutions help meet their needs.”

In this complex healthcare environment, it’s helpful to remember what works for keeping talent and what employees want.  Voluntary benefits provide an opportunity to offer valuable benefits with little or no cost to the company.  So consider taking advantage of this affordable way to offer meaningful benefits to your workforce.

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