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April 18, 2004 at 08:00 PM
As a benefits advisor, you might find yourself selling insurance plans that have changed little since 1960 to employers where most workers were born after the Beatles broke up.
One solution: offer more voluntary, employee-paid benefits products.
Over the past few years, employers have been asked to absorb higher and higher benefits costs, and employees have had to deal with restricted coverage, higher co-payment amounts and higher deductibles.
Depending on an employer’s demographics, geographic location, payroll and level of benefits provided, benefits can account for up to 30% of an employee’s total compensation. One of the main reasons for this is a pervasive expectation in our culture that employee health insurance programs should be designed to fit everyone, with little regard for the individual needs of each employee.
That means that the cost of benefits has been driven by employees with the highest needs.
Members of Generation X, or adults born between 1965 and (roughly) 1981, often have modest needs.
Supplementing traditional coverage with voluntary plans helps the employer provide a basic plan at low cost while letting the employees choose from a variety of add-ons that can round out the coverages they need to fit their own individual circumstances.
When employers are facing large cost increases for “core” benefits, voluntary programs can help them sweeten the package without increasing their own expenses.
Employees appreciate the flexibility of choice.
