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Why voluntary benefits are an essential component in your post-ACA benefits strategy

A whirlwind of change is pushing workers out of their comfortable employee benefits nest. Tossed into unfamiliar territory, your employees need help navigating this new health benefits world.

With the U.S. in the throes of health care reform, now is the perfect time to revisit the role of voluntary insurance products in your employee benefits program.  Perhaps you already offer (or are thinking about offering) voluntary benefits.  How you incorporate voluntary products into your overall benefits package has a huge influence on your employees' ability to adapt to the inevitable changes brought on by the Affordable Care Act (ACA). 

The right blend of benefit options can help your employees supplement higher out-of-pocket costs and allow them to tailor benefits to their specific needs. When reviewing your voluntary benefits strategy, consider the following three areas:

Your Core Benefits 

The definition of core benefits is changing. A once robust package of medical, income protection, and retirement benefits has morphed into something quite different.  Escalating health care costs and a shaky economy has forced many employers into tough, cost-cutting decisions.

CFO Publishing, LLC reports most (71 percent) finance executives view controlling the employer cost for health care benefits as their number one benefits priority. 

High-deductible health plans (HDHPs) are becoming the order of the day. The National Center for Health Statistics reports nearly one-third of all health plan participants are already enrolled in an HDHP. The ACA is expected to propel more employers toward considering or moving employees to HDHPs.

Core benefits (like disability or dental coverage) are increasingly shifting toward voluntary, employee pay-all benefits. 

Your first step in assessing your voluntary benefits strategy is to understand the impact of your core benefits decisions.

  • Have benefit changes significantly increased out-of-pocket costs?
  • Are there increasing gaps in employees' coverage?
  • Are there risks to employees' financial health brought on by a reduction in core benefits?

By reviewing your core benefits, you can identify potential areas of opportunity for voluntary benefits.

Your Employee Demographics 

Your employee demographics offer insight into the type of voluntary products that interest your employees. A diverse, multigenerational workforce has different concerns that shift as their health care needs and financial status change.

Employees in various stages of life view employee benefits very differently. A young, single worker in good health with no children and little savings may not be very interested in comprehensive medical and life insurance.  On the other hand, a working parent with children is going to be very concerned about how to fund doctor and dental visits as well as provide for the future financial protection of their family. 

These differences present a challenge for you to develop an employee benefits program than meets many needs within your employee population.

Review your employee demographics for the following factors:

  • Age, gender, and home status (single, family, caregiver)
  • Economic status
  • Health risks

Aggregating data from your Employee Assistance Program and wellness vendors can help shape the specific benefit needs of your employees.

Your Benefits Communication 

A common mistake made in voluntary benefits communication is treating the benefit as an afterthought. Your voluntary benefits strategy is more than adding new products.

You want your employees to take a more active role in their health care decisions. The products you offer are an integral part of your entire benefits package. The key is helping employees make the connection between health benefits and their specific needs.

Incorporate voluntary benefits into enrollment materials. Illustrate the connection between voluntary and core benefits - how voluntary benefits fill gaps in coverage and reduce out-of-pocket expenses.

Personalize communication to reflect your employees' interests. Beyond known demographics, employee surveys, focus groups, and feedback help identify those interests.

Educate employees on how to customize benefits to their health care needs.

Talk to your HUB employee benefits consultant and learn how you can develop or refine your voluntary benefits program to best support your overall employee benefits strategy.  Any changes you make to your core benefits should trigger a review of your voluntary benefits program.