Voluntary benefits are a great way to attract and retain talent, but are you offering the right ones? A new survey, released by Willis Towers Watson, highlights the most popular voluntary benefits that are being offered today.
Long viewed as “something nice to offer,” a growing number of U.S. employers now consider voluntary benefits an integral component of their core employee benefit strategy, according to the 2018 Emerging Trends: Voluntary Benefits and Services Survey. The survey found employers are expanding their menu of voluntary benefits and services to help workers address their overall financial well-being and security.
“Historically, employers offered voluntary benefits to supplement their core health and retirement benefit coverage,” said Lydia Jilek, director, Voluntary Benefits, Willis Towers Watson—in a press release. “Now, with an increasingly diverse workforce, employers no longer consider voluntary benefits as simply add-ons, but rather as a way to address a host of employee needs, offer choice and allow employees to personalize their rewards.”
According to the survey, only a handful of respondents (5%) say voluntary benefits will have little importance to their employee value proposition and Total Rewards strategy. Five years ago, 41% of employers said voluntary benefits would have little importance. Meanwhile, more than two-thirds of employers (69%) believe voluntary benefits will be a very or more important component of their employee value proposition in 3 to 5 years, nearly double the percentage (36%) who currently feel this way.
“Voluntary benefits are evolving as they become a more important differentiator for organizations,” said Mary Tavarozzi, managing director, Health and Benefits, Willis Towers Watson. “While employers continue to embrace traditional voluntary benefits, such as life and disability coverage, they are offering benefits more often to help employees and their families with their financial issues. This should come as welcome news to employees, many of whom are seeking help from their employers to address their personal financial issues.”
Education, Financial Well-Being Benefits Gaining Traction
The survey identified education benefits that address rising student loan debts and parents saving for children’s future college cost as important financial well-being benefits that are gaining traction. According to the survey, 8% of employers currently offer student loan consolidation programs, which could increase to 34% by 2021. Similarly, 10% of employers offer student loan refinancing arrangements, which could increase to 35% by 2021. On average, more than half of all respondents offer some form of financial planning and counseling service, which could increase another 10% by 2021.
“Voluntary benefits remain popular among employers and employees, and for good reason. These benefits are a cost-efficient way to provide additional coverage to employees, and they can help employers attract and retain talented employees, many of whom tend to migrate to employers who offer choice and flexibility. Employees, on the other hand, see great value in voluntary benefits, which they are able to purchase through their employer at a lower group rate compared with on the individual market,” said Jilek.
Other voluntary benefits expected to attract more employer attention over the next few years include:
- Identify theft protection: 36% of employers currently offer—could increase to 63% by 2021
- Pet insurance: 34% of employers currently offer—could increase to 57% by 2021
- Long-term care insurance: 16% of employers currently offer—could double to 33% by 2021
- Critical-illness insurance: 43% of employers currently offer—could increase to 71% by 2021
- Hospital indemnity: 24% of employers currently offer—could more than double to 50% by 2021
“The good news is that improvements in enrollment technology are making it easier for employers to expand their voluntary benefit offerings—and the expanded choices are resonating. We’re seeing an increasing number of employees elect voluntary benefit products,” concluded Sherri Bockhorst, managing director, Benefits Delivery and Administration, Willis Towers Watson.