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TOTAL BENEFITS | PARTICIPANTS
their perceived ability to help employees
protect themselves in a risky world.
As the pandemic heightened awareness
of the financial risks that can accompany
medical crises, the fastest-growing
voluntary benefits, according to Aon's
report, have been supplemental health
insurance policies, such as accident,
hospital indemnity and critical illness.
The mounting death toll also drove
demand for life insurance, particularly
among young and healthy workers who are
otherwise less apt to consider their own
mortality. A LIMRA study found that 45%
of Millennials are more likely to buy life
insurance due to COVID-19. Meanwhile,
the economic recession reinforced the
importance of emergency savings.
The pandemic-related transition to
increased remote work has also prompted
many employees to re-evaluate their worklife
balance and reconsider what they really
want from their employer.
" We're seeing this shift from people
saying, 'It's all about wages,' to now it's
more about their overall ability to navigate
their life, to come to the workplace stressfree
so they can work at the highest level
possible, " says Ed Farrington, executive
vice president, institutional and retirement
business for Natixis Investment
Managers in Boston.
Personalization
COVID-19 notwithstanding, experts say
the interest in voluntary benefits has been
growing for years, as companies look for
ways to deliver competitive benefit packages
to an increasingly diverse workforce.
Employees have vastly different needs
when it comes to physical and mental
health and financial security.
For example, between the start of
2020 and of 2021, according to MetLife,
the demand for vision care went up 18
percentage points among Baby Boomers,
while demand for legal services and
student debt assistance climbed 19
percentage points among 20-somethings.
Age is not the only demographic determining
benefit needs: Half of employers
surveyed by Buck said hourly workers are
most in need of financial support and are a
prime target for additional benefits.
" When you think about voluntary
benefit offerings that best fit employees,
employers must really understand the
unique diversity of their employment
population, " says Missy Plohr-Memming,
senior vice president, group benefits
at MetLife in Chicago. Workers whose
employer offers an appropriate selection
of voluntary benefits can essentially create
their own customized benefit package to
meet their needs.
" Voluntary gets you the ability to
select the product and coverage, safety and
security that you, personally, are seeking, "
Plohr-Memming says. -Beth Braverman
Creating the Offering
EMPLOYERS interested in expanding or
improving their voluntary benefits should
start with a survey of their employees to
learn the pain points these benefits might
address, says Jeffrey Cullen, managing
partner with Strategic Retirement Partners
in Shorewood, Illinois.
" Then they can find an adviser who
actually understands all of these benefits
and can put together a collection to satisfy
the needs of their constituency, " he says.
" That way, you don't spend a lot of money
and time offering your people things they
don't actually want. "
Tom Kelly with Buck says an adviser
can also help plan sponsors assess other
data to determine the most appropriate
benefits. Buck's data analytics drill down
to enrollment and claims data, workforce
generational analysis, financial health,
and existing benefits to identify gaps in
coverage and employee needs.
" The data-driven approach delivers
higher engagement, higher participation,
better rates, underwriting and an
overall stronger benefits proposition for
employees, " he says.
Once they have identified potential
benefits, sponsors should work with their
adviser to create a request for proposals
(RFP) to find providers that offer them. In
addition to new vendors, Cullen suggests
sending the RFP to the plan's existing
provider, which may already offer such
benefits or have plans in the works.
" We've found on several occasions
that a client wanted to shop for a student
loan debt solution, HSA [health savings
account program] or emergency savings
solution, and its current 401(k) provider
had one in the pipeline, " he says. " We were
able to make sure either the client got a
first look at it, or was a beta tester, or got
into the queue to be onboarded onto it. "
Integration and Automation
One advantage of using an existing
provider is that the new benefits can more
easily integrate into the current benefit
platform. If integration is not possible,
having all benefits link out from a single
landing page on an employer's site can
work. Even more important is integrating
with the payroll system for automatic
deductions, Cullen says.
The ability to automate such benefits
is part of their appeal, and employees often
purchase them for less than they would pay
in the open market, as plan sponsors may
negotiate a group rate.
Beyond integration, plan sponsors
should look for providers that can also
offer advice and education about how the
new benefits work, says Ed Farrington of
Natixis Investment Managers. " You want
to present a menu of options that address
the different needs of different employees
to help them navigate the complexity of
work and personal life. That way, they
feel supported and understood and come
to work every day with as few stresses as
possible, " he says. -BB
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